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EMC strategically acquired stake in VCE to focus on hybrid cloud

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VCE operates in high growth space

VCE is a joint venture of VMware (VMW), Cisco (CSCO), and EMC (EMC). VCE has ~700 customers, and the average selling price of a system is $1.2 million. According to EMC, VCE has shipped ~2,000 systems to date.

VCE’s vBlock is the company’s offering that enables companies to move to cloud and virtualization in terms of storage, fabric, compute, hypervisor, management, and security in an easy and faster way. SDN Central estimates that the software-defined networking market has the potential to grow at a compound annual growth rate (or CAGR) of 80% from a $3.4 billion market currently to a $35 billion market in 2018.

As the above chart shows, EMC with a score of 66% leads among its IT vendors in hybrid cloud strategies. NetApp (NTAP) follows EMC with a 42% score. Other players in the Wikibon research were HP (HPQ), IBM (IBM), and Dell.

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Strategic acquisitions helped EMC expand its hybrid cloud offerings

In July 2014, EMC acquired TwinStrata. Twinstrata is a cloud storage and backup company. Its services include CloudArray that combines onsite disk storage with cloud storage on demand. The chief aim behind this acquisition for EMC is to expand its hybrid cloud offerings, in which onsite storage is linked with cloud storage.

EMC’s recent acquisitions, Cloudscaling, Maginatics and Spanning, have enhanced its capabilities to protect, manage, store, and connect to data both on the cloud and on servers. These acquisitions have enabled EMC to offer comprehensive cloud backup and storage solutions, thus enhancing its presence in the hybrid cloud space. In October 2014, backed by technologies of these acquisitions, EMC announced its hybrid cloud solution that we’ll discuss in a later part of the series.

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