EMC and VMware create Virtustream-based cloud business unit

EMC and VMware announced the creation of a new cloud computing business unit that will sell technology from both companies, and products from Virtustream, a company EMC bought for $1.2 billion earlier this year.

The move comes on the heels of plans being announced for Dell to acquire EMC for $67 billion and solidifies the central role Virtustream will play in the combined companies’ hybrid cloud strategy.

The new business unit will be jointly owned in equal parts by VMware and EMC, and will operate under the Virtustream brand. Rodney Rogers, the former CEO of Virtustream, will run the unit. VMware will report earnings from the business unit; the companies expect it to generate “multiple hundreds of millions of dollars in recurring revenue in 2016,” they said. The announcement was made during VMware’s earnings call on Tuesday.

The new business unit will sell cloud technologies from VMware, EMC and Virtustream. Specific products include VMware’s vCloud Air public IaaS cloud, VCE Managed Cloud services, Virtustream’s IaaS and EMC’s Storage services. These products cover a range of hybrid cloud use cases, including private on-premise cloud components, hosted, managed and public cloud products.

“Virtustream will integrate these assets to provide customers with a unified infrastructure-as-a-service offering, designed to support the complete spectrum of business workloads, with a service portfolio that spans a full range of services and deployment options,”. “The business will integrate and extend existing on-premises EMC Federation private cloud deployments into the public cloud, maintaining a common experience for developers, managers, architects and end users.”

Prior to being acquired by EMC, Virtustream specialized in migrating complex enterprise applications, such as customized SAP workloads into cloud-based applications.