Massachusetts based IT giant EMC is all set to acquire Maryland based Enterprise Cloud Service Provider Virtustream. The deal is valued at $1.2Billion. This news was announced by the companies formally in their press release on Tuesday.
This is an all-cash deal and is expected to be done in few months. When finalized, this deal will be the largest acquisition in Washington region during this calendar year.
Why this deal is so important for EMC?
- EMC might not be growing like other competitors, but sure they are a big name in Enterprise technology with $24.4 billion declared revenues as of December 2014.
- EMC is as such pretty slow move to cloud arena. May be to put it blunt they didn’t have enough capability to maneuver the cloud demands arising off late in the enterprise technology needs.
- With Virtustream, EMC can now lay a strong foundation in the fast growing public cloud infrastructure market.
- Virtustream even though a beginner in cloud market, has a strong feedback in market with their clientele and projects. Their client base include Coca-Cola, Heinz, and Kawasaki to name a few.
- Virtustream also owns and operates its own data centers.
- Gartner report from last week has given credit to Virtustream for winning large-scale enterprise deals.
- EMC recently released their open source software. This backup could help make Virtustream service more technically impressive and less expensive.
- As per their press release, EMC has stated of their long history of relationship with EMC. And hence both the companies are already familiar with each other’s work.
- This deal helps and allows EMC to cater their clients need for a complete range of cloud infrastructure and services.
If all things happen as stated, EMC could well compete with Microsoft Cloud. It’s possible but could not specify when it would happen. Only time would tell if EMC could make full use of their Virtustream acquisition and expand their base in the cloud infrastructure market.