The cross-ownership arrangement, expected to be completed early next year, tangles EMC and VMware together even more. EMC owns 80 percent of VMware, which is part of the EMC Federation alongside VCE, RSA, Pivotal, and EMC II (the original EMC business). Topping it all off, EMC is in the process of being acquired by Dell.
The new cloud services business will incorporate Virtustream, VMware’s vCloud Air, and the cloud capabilities of EMC Information Infrastructure. It will operate under the Virtustream brand, led by Virtustream CEO Rodney Rogers.
“Virtustream is expected to generate multiple hundreds of millions of dollars in recurring revenue in 2016, focused on enterprise-centric cloud services,” EMC and VMware said in a press release Tuesday.
The companies plan to fold Virtustream’s earnings in to VMware’s financial results starting in the first quarter of 2016.
Virtustream will serve business customers that want to move all their applications, including mission-critical applications, to the cloud, and it will provide both private and public cloud (or hybrid cloud) services.
“The EMC Federation is now positioned as a complete provider of hybrid cloud offerings,” said Joe Tucci, EMC chairman and CEO, in a statement.
VMware will establish a cloud provider software business unit incorporating VMware’s cloud management offerings and Virtustream’s software assets. The new business unit will be led by Ajay Patel, VMware senior vice president, and, as its name suggests, will focus on delivering cloud software to cloud providers.