On May 26, EMC Corporation announced it will acquire Virtustream for $1.2 billion in cash. As a result of the acquisition, EMC stands poised to incorporate Virtustream’s xStream cloud management platform and managed cloud services into its Federation Enterprise Hybrid Cloud Solution. The acquisition allows EMC to deliver a managed cloud services offering in addition to strengthening its ability to deliver hybrid cloud solutions by lining up Virtustream’s public cloud infrastructure alongside Cloudscaling, the OpenStack-based private cloud platform it acquired in October 2014. EMC’s purchase of Virtustream signals the intensification of consolidation within the IaaS space as more vendors come to terms with the realization that public cloud IaaS requires significant capital investments on a scale that can be afforded by only a handful of vendors as echoed by Gartner analyst Lydia Leong’s recent observation that “few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market.” Virtustream CEO Rodney Rogers will report to EMC CEO Joe Tucci.
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