EMC teams up with Virtustream to challenge AWS

Recent reports that Amazon Web Services Inc. (AWS), is dwarfing its cloud computing competitors aren’t stopping EMC from expanding its portfolio to challenge the market leader.
EMC announced last week that it had acquired Virtustream, a privately held cloud company, for $1.2 billion. EMC’s cloud business focuses primarily on hybrid deployments. Virtustream will allow EMC to enter the “managed cloud” business, a step closer towards the pure public cloud Infrastructure as a Service offered by AWS.
EMC and industry observers suggested that the acquisition would position EMC to challenge AWS more directly. DC Inno stated that the acquisition was EMC’s attempt to compete with Amazon’s AWS cloud infrastructure market leader.
InvestCorrectly.com, a financial analyst, said that the move will allow EMC to take a larger share of the IaaS market. According to the site, Virtustream is a niche player and not a direct competitor to Amazon.com Inc.’s AWS or Microsoft Corp.’s Azure. “However, Virtustream is a niche asset, it remains unknown how important Virtustream could be to EMC.”
In fact, Virtustream was listed by Gartner Inc. as a “niche player” in its most recent “Magic Quadrant IaaS” report. This placed AWS ahead, closely followed by Microsoft.
VMware Inc., a former niche player, was promoted to the “visionary” category in the Gartner report. This is notable since EMC holds an 85 percent stake in VMware. Data Center Knowledge stated that VMware went from a niche to a visionary and its ability to execute was enhanced. The site stated that Virtustream’s recent acquisition by EMC will likely impact its position in next years’s report.
EMC stated that the acquisition was motivated by customers’ concerns. Customers wanted to move beyond the hybrid model and put all their computing resources into the cloud. Virtustream will enable the “EMC Federation” — which includes VMware — to offer this capability.
EMC’s Federation of businesses has been able to offer a wide range of hybrid cloud offerings. However, customers are increasingly asking for the ability to move all workloads to an offprem managed cloud model. This includes mission-critical applications such as SAP,” Howard Elias, EMC executive, stated in a blog post. Virtustream will allow us to support all applications, regardless of their size, on and off-prem. This is a significant addition to the EMC Federation’s capabilities.
Virtustream CEO Rodney Rogers stated in a blog that the Virtustream technology is actually based upon AWS innovations.
Rogers stated that founders of the company “admired the AWS core cloud architecture which eventually’made’ public cloud markets that they still dominate today.” We felt that it would be suicide to attempt to build a sub-scale AWS business model. Instead, we focused on incorporating many AWS principles, such as multi-tenancy and elasticity, orchestration and automation, in order to solve the engineering problem of running mission-critical, I/O-intensive enterprise applications in the cloud.
“Further we focused on automating many system functions required for managing these types of enterprise applications environments so that we could offer a unique managed service for technology landscapes that ran in our cloud. Virtustream was born.
Virtustream was also one of the few independent companies Gartner recognized in its Magic Quadrant. Another analyst, Forrester Inc., named Virtustream as o