This Cloud Thing Is Real--EMC Drops $1.2B For Virtustream

EMC is a funny sort of an organization, often held up as one of the legacy companies that isn't able to respond to the move to the cloud. The truth of the matter is that they have some pretty interesting things going on. EMC is, of course, the company that co-founded Pivotal. Pivotal is a fascinating company that delivers a bunch of big data and platform tools suited to the modern requirements of enterprises.

EMC is also, of course, the parent company of VMware, the virtualization powerhouse that many would argue kick started the move to the cloud originally. Add security company RSA into the mix and EMC has its fingers in some interesting pies.

EMC is today putting another stake in the ground with the announcement that it is acquiring cloud software vendor Virtustream in an all-cash deal. The deal, which sees EMC pay $1.2 billion for the company, once again shows the value of a hybrid cloud offering. EMC has previously acquired CloudScaling, another cloud software vendor that had previously seen moderate success in building OpenStack-based clouds for large service providers. Last year they also bought backup company Spanning and data company Maginatics to build out their cloud portfolio.

In terms of the vision for the Virtustream deal, EMC will bundle Virtustream in with its “Federation Enterprise Hybrid Cloud Solution,” a suite of cloud-focused tools that also includes VMware vCloud Air. Virtustream has seen some interesting success partnering with some large vendors. In particular it scored a coup being certified by SAP to run that company's in-memory analytics tool, HANA, on Virtustream software. Update with clarification from EMC - vCloud Air works with the Federation Enterprise Hybrid Cloud but is not part of it.

In terms of customers, Virtustream has a good-looking roster of clients including  Coca-Cola , Heinz, Hess , and Kawasaki. Virtustream's founders and CEO, Rodney Rogers, was, as can be expected, positive about the deal, commenting that:

We’re proud to be joining the EMC Federation where our combined capabilities, products and services will allow us to accelerate our vision of delivering the platform of record for enterprise systems, and address the complete breadth of cloud computing needs.

Virtustream had previously raised just shy of $130 million over nine rounds giving its investors a nice pay day. Intel Capital was one of the most prominent investors in the company.

This is a big bet by EMC, but one which speaks to the tectonic shifts occurring in the industry.