EMC to acquire Virtustream

On May 26th EMC announced that it is to acquire the privately held company Virtustream. What does this mean and what are the implications?

Virtustream is both a software vendor and a cloud service provider (CSP). Its software offering includes a cloud management platform xStream, an infrastructure assessment product Advisor, and the risk and compliance management software, ViewTrust. It also offers Infrastructure as a Service (IaaS) with datacentres in the US and Europe. KuppingerCole identified Virtustream as a “hidden gem” in our report: Leadership Compass: Infrastructure as a Service - 70959

The combination of these products has been used by Virtustream to target the Fortune 500 companies and help them along their journey to the cloud. Legacy application often have very specific needs that are difficult to reproduce in the vanilla cloud and risk and compliance issues are the top concerns when migrating systems of record to the cloud.

In addition the Virtustream technology works with VMWare to provide an extra degree of resource optimization through their Micro Virtual Machine (µVM) approach. This approach uses smaller units of allocation for both memory and processor which removes artificial sizing boundaries, makes it easier to track resources consumed, and results in less wasted resources.

The xStream cloud management software enables the management of hybrid clouds through a “single pane of glass” management console using open published APIs. It is claimed to provides enterprise grade security with integrity built upon the capabilities in the processors. Virtustream was the first CSP to announce support for NIST draft report IR 7904 Trusted Geolocation in the Cloud: Proof of Concept Implementation. This allows the user to control the geolocation of their data held in the cloud.

EMC already provides their Federation Enterprise Hybrid Cloud Solution — an on premise private cloud offering that provides a stepping stone to public cloud services. EMC also recently entered the cloud service market with an IaaS service vCloud Air based on VMWare. Since many organization already use VMWare to run their IT on premise, it was intended to make it possible to migrate these workloads without change to the cloud. An assessment of vCloud Air is also included in our Leadership Compass Report on Infrastructure as a Service – 70959.

The early focus by CSPs was on DevOps but the market for enterprise grade cloud solutions is a growth area as large organizations look to save costs by datacentre consolidation and “cloud sourcing” IT services. However success in this market needs the right combination of consultancy services, assurance and trust to succeed. Virtustream seems to have met with some success in attracting US organizations to their service. The challenge for EMC is to clearly differentiate between the different cloud offerings they now have and to compete with the existing strong players in this market. As well as the usual challenges of integrating itself into the EMC group, Virtustream may also find it difficult to focus on both providing cloud services as well as developing software.



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