EMC and VMware unveil latest member of Federation family

Cloud arm Virtustream to come under the EMC Federation umbrella

EMC and VMware have introduced the newest member of the EMC Federation in the form of cloud business Virtustream.

The cloud services business will combine the cloud capabilities of EMC and VMware, as well as existing Virtustream offerings. The new arm of the Federation will retain the Virtustream name and will join VMware, EMC Information Infrastructure, Pivotal and RSA under the EMC Federation umbrella.

Virtustream is currently a division of EMC, with offices in the US, India, the UK, Germany and Lithuania. It was acquired by EMC in May this year and will now become a separate unit in its own right, with an extra cloud boost from its parent and sister companies.

EMC claims the new unit will "generate multiple hundreds of millions of dollars in recurring revenue in 2016".

The news came as VMware announced its third-quarter results, in which the UK was pointed to as a disappointment.

For the three months to 30 September, VMware's GAAP net profit rose 31.9 per cent annually to $256m (£165.6m) on sales which over the same period rose 14 per cent to $1.67bn.

"In EMEA, we were pleased with our business in Germany and Italy powered by some larger deals," said VMware's chief operating officer Carl Eschenbach. "Meanwhile, our UK business did not grow as robustly as it had earlier in the year, and Russia continued to be challenging due to the economic environment."

VMware's chief executive Pat Gelsinger said the Virtustream announcement, on top of last week's news that Dell is planning to buy its parent firm EMC, is great news for VMware.

"We are extremely optimistic about the long-term value to VMware of the Dell and EMC merger and of the new Virtustream business," he said.

"This, combined with our growth businesses that we've been talking about, leaves VMware's mission and strategy unchanged and now substantially accelerated. We are going to continue as a publicly traded company. We expect these transactions to accelerate our growth across all our businesses."