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 EMC and VMware are to combine their cloud offerings under a jointly-owned 50/50 shared Virtustream brand led by its CEO Rodney Rogers.

The cloud service will be aimed at enterprises with an emphasis on hybrid cloud, which Virtustream’s owners identify as one of the largest markets for IT infrastructure spending. The company will provide managed services for on-premises infrastructure and its enterprise-class Infrastructure-as-a-Service platform. The rationale is to help clients make the transition from on-premise computing to the cloud, migrating their applications to cloud-based IT environments. Since many applications are mission critical, hybrid cloud environments will be instrumental in the conversion process and Virtustream said it will set out to provide a public cloud experience for its Federation Enterprise Hybrid Cloud service.

Nearly one-third of all IT infrastructure spending is going to cloud-related technologies, according to a research by The 451 Group, with cloud service buyers now investing on the application stack. Enterprise adoption is increasing, says the researcher, and buyers increasingly favour private and hybrid cloud infrastructure. Enterprise resource planning (ERP) software is increasingly being run on cloud systems, and enterprises will spend a total of $41.2B annually on ERP software by 2020, says The 451 Group.

Virtustream will incorporate EMC Information Infrastructure, VCE and VMware into one and will offer services using VMware vCloud Air, VCE Cloud Managed Services, Virtustream’s Infrastructure-as-a-Service and EMC’s Storage Managed Services and Object Storage Services offerings. VMware will establish a Cloud Provider Software business unit led by VMware’s senior VP Ajay Patel. The unit will incorporate existing VMware cloud management offerings and Virtustream’s software assets.

The business will integrate existing on-premises EMC Federation private cloud and take them into the public cloud, according to Virtustream. The aim is to maintain a common experience for developers, managers, architects and end users. Virtustream’s cloud services will be delivered directly to customers and through partners.

Virtustream addresses the changes in buying patterns and IT cloud operation models that both vendors are encountering now, said EMC CEO Joe Tucci. “Customers consistently tell us they’re on IT journeys to the hybrid cloud. The EMC Federation is now positioned as a complete provider of hybrid cloud offerings.”

Virtustream’s financial results will be consolidated into VMware’s financial statements beginning in Q1 2016.

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