EMC Acquires Virtustream to Own Conversations with Business Leaders

business-impactEMC, the federation, is in hot pursuit of mission critical business applications that are vital and often the most difficult and costly for IT organizations to manage and maintain. Lower tier applications tend to have more fluidity and flexibility, lending themselves to fly around the data center or off to the cloud with relative ease while mission critical applications tend to have a more “caution do not touch” mentality. This is good, but not necessarily the most efficient and economical decision given today’s choice of consumption models and pressure to drive further automation and efficiencies into the IT operational model.

VMware, as a key participant in the EMC federation, has done well from a pure numbers perspective since the majority of applications that IT is responsible for are tier-1 and 2 applications and these have proven to be ideal applications to consolidate. But, the market has also advanced with applications that are born in the cloud and enterprise IT is seeing benefits from both a private cloud consumption model as well as IaaS and a hybrid model that embrace multiple approaches. The EMC federation has a solid foothold in the private cloud and some okay offerings with VMware vCloud Air for IaaS, but is at risk with enterprise customers who view businesses such as Amazon as a strategic partner and technology leader (as ESG described in recent research, Amazon Web Services Continues to Secure a Foothold in Enterprise IT). And while Amazon is typically the defacto public cloud offering, its vision on private cloud and hybrid cloud can be less than attractive to enterprise IT shops. However, the recent shifts at Microsoft have an enormous reliance on its customers embracing a hybrid cloud strategy lead with business productivity applications backed by on-premises offerings such as Windows Azure Stack and off-premises cloud services with Azure.

The bottom line is that hybrid cloud is the preference for enterprise IT. From an EMC perspective, they have swept the floor with VMware, but have not advanced as far as they would like to with tier-1 applications or what we often hear refered to as BCAs (business critical applications) in the halls at VMware. The acquisition of Virtustream gives EMC instant credibility as a hybrid cloud provider and unlocks its ability to walk into the global 1,000 and fortune 500 businesses with a viable hybrid cloud strategy.

Virtustream would have been referred to as black magic several years ago, but in today’s environments where IT wants to embrace the cloud operating model and maintain enterprise reliability, the management and orchestration software is essential. Virtustream xStream is a control plane for resource automation and management. Its goal is to break cloud down into individual resources, eliminate resource contention, and control throughput—all requirements for mission critical applications. xStream allows predictable throughput that is coupled directly to application response time and provides the ability to throttle I/O for applications. The result is a guaranteed response time and predictable latency of application response time or as Rodney Rogers, Virtustream Chairman and CEO put it very eloquently “performance assured and cost optimized.”

The acquisition of Virtustream for $1.2B is just as much of an EMC federation operational decision as it is about the software capabilities. Large global businesses are waning away from IT vendors that knock on the door with a single threaded discussion and are turning to seek strategic guidance that relates directly to improved business outcomes. These discussions are led by the top priorities on the CIO whiteboard that are mapped to cloud initiatives and always couple to the most strategic business applications. EMC is strategically landing inside these organizations with a conversation that starts with mission critical applications, tied directly into business impact, and rolls through with the solutions that support the strategy. The EMC investment in Virtustream isn’t about EMC becoming a cloud provider. It’s 100% focused on owning the business conversation and having the portfolio to deliver.

Insight on trends in converged infrastructure