Virtustream

Virtustream — the independent supplier having DPCs on East and Western coast of the USA in Great Britain and the Netherlands. Virtustream developed own technology of a cloud platform to facilitate implementation of the difficult application software, as from traditional vendors of corporate applications, and purely cloud solutions. Virtustream is founded in 2009 by Rodney Rogers and Kevin Reid who as of May, 2015 hold in the company posts of general and technical directors respectively.

2018: Rory Read is the new CEO of Virtustream

In May, 2018 the developer of corporate cloud services Virtustream announced replacement of the leadership. The company was headed by the former CEO of AMD Rory Read. Read more here.

2016

Entry into structure of Dell Technologies

As a result of a corporation merger of Dell and EMC the Virtustream company was a part of Dell Technologies group.

2015

VMware broke the cloud transaction with EMC

In the middle of December, 2015 VMware announced that it will not create cloud business, joint from parent EMC, which was announced two months before. Though the producer of means of virtualization did not explain the solution, journalists know that the transaction was not supported by investors as see in it a negative impact on the quotations of the company.

On December 14, 2015 VMware sent to Securities and Exchange Commission the statement in which it reported that it will not take part in creation of cloud business together with EMC. In day when this message was published, stocks of VMware fell in price more than for 3.1%.

VMware refused to create cloud business, joint with EMC, having reacted with that to pressure of investors

EMC and VMware were going to create the new company working under the Virtustream brand and to transfer it the cloud services. The Joint Venture (JV) had to begin work in January, 2016 and generate to its owners hundreds of millions dollars of revenue.

After the announcement of the joint venture in the press messages that EMC and VMware intend to review cooperation conditions began to appear, having made them more profitable to investors of VMware. In particular, there passed information that EMC can receive a controlling interest in Virtustream (initially 50% for 50% were going to divide business in the ratio) therefore will pass with it the losses of new business estimated at $300 million at the end of 2016.

However after from the moment of the declaration of cloud partnership with EMC on October 20, 2015 securities of VMware fell in price approximately by 20%, in media started talking about possible failure of the transaction. According to analysts, the new company would increase expenses of VMware on servers and data centers that negatively would affect profitability of business of vendor, The Wall Street Journal notes.^[1]

As a result of VMware decided to refuse the cloud transaction with EMC and to save independent work of vCloud Air service.

"VMware will continue business management of VMware vCloud Air, having focused on helping clients easy to transfer to a cloud of their application for data centers. Also VMware will still deliver the cloud software and solutions to partners through VMware Cloud Air Network" — said in the company.

EMC and VMware create joint cloud business based on Virtustream

On October 20, 2015 the producer of disk storages EMC and software developer under control of it for virtualization of VMware announced creation of joint cloud business which, according to representatives of the company, will be obviously unprofitable. It forms based on Virtustream.

The joint venture which VMware and EMC divided equally among themselves received the formal designation Cloud Services Business and will be a part of so-called federation (EMC Federation) as a part of which there are also EMC Information Infrastructure, Pivotal, RSA and VCE. New cloud business will integrate the solutions vCloud Air, Virtustream, storage systems and managing cloud services. The joint venture will work under the Virtustream brand, is going to complete process of its creation at the beginning of 2016.

VMware and EMC created obviously unprofitable cloud business

Results of work of Virtustream will be reflected in the financial statement of VMware, since the first quarter 2016. As the chief financial officer of VMware Jonathan Chadwick reported, revenue of the created cloud business will be measured by several hundred millions of dollars in 2016, however its operating losses will make from $200 million to $300 million. About in what terms it is going to bring business to profit, it is not specified.

According to Chadwick, creation of Cloud Services Business says that VMware becomes the direct seller of cloud services instead of relying on partners. The company expects weak growth rates of orders partly because some clients maintain a pause for consideration of cloud strategy, the financial director of VMware emphasized.

"I would not tell that we were late with mastering of the cloud market. We always followed partner strategy, and now we double a rate, practicing direct approach to this business" — Johnathan Chadwick added.

The analyst of FBR Capital Markets Daniel Ives considers creation of joint cloud business of VMware and EMC by attempt of close integration of the companies which want to catch up with the opportunity escaping them to be fixed in the market of clouds.^[2]

Virtustream is sold to EMC for $1.2 billion

On May 26, 2015 EMC announced purchase of the developer of cloud services and the software of Virtustream. At the expense of solutions of the absorbed firm the American corporation will be able to expand business in a cloud.

Acquisition value is $1.2 billion. After closing of the transaction which is planned on the third quarter 2015 Virtustream forms the new division which is responsible for cloud services of external control as a part of EMC. The head of Virtustream Rodney Rogers will report to the CEO of EMC Joe Tucci.

At the expense of solutions of Virtustream the EMC company will be able to expand business in a cloud

"Having received Virtustream, the EMC company will allow the clients to transfer all the applications to a cloud environment" — Reuters quotes the statement of EMC.^[3]

The purchased business will help EMC to increase revenue and profit in 2016, and in the 2015th it will not have any significant effect on results of the company, says the American producer of disk storages.

According to the results of two reporting quarters which preceded the announcement of purchase of Virtustream the EMC company fixed the slowed-down sales growth that is connected with easing of demand for storage systems which are core business of vendor. In attempt to strengthen a financial position of EMC decided to focus on new products, such as cloud solutions and disk arrays on a basis a flash memory.

"Expansion of a portfolio of hybrid cloud products should help EMC to strengthen a business grasp — analysts of FBR & Co report. James Moore and James Moore in a note for investors. — In general we like steps of the company in the cloud market, however search of new opportunities of growth of the company will require more transactions on merges and absorption as core business of EMC practically reached the pica".

After the announcement of purchase of Virtustream of the stock EMC fell in price for 2.3%.

Virtustream expands partnership with SAP

The Virtustream company helps the enterprises to transfer around the world to a cloud, to execute and administer crucial applications with high intensity of input-output. The company is proud of experience of implementation in cloud models of support of SAP solutions which contains more than 200 deployments of SAP solutions in production environments and one of the first cases of the implementing solution SAP Business Suite 4 SAP of HANA (SAP S/4HANA) in a cloud. The Virtustream company announced that it became one of several prime strategic vendors of cloud infrastructure services for crucial SAP applications in a corporate cloud of SAP HANA.

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