infoTECH Feature

October 15, 2014

Wheelings & Dealings: EMC Agrees to Purchase Rising Startup Cloudscaling Group Inc.

The critically-acclaimed cloud infrastructure pioneer EMC (News - Alert) Corp. made the official announcement on Oct. 13 that the company is making moves to acquire a cloud-computing startup called Cloudscaling Group Inc. The deal will help to make EMC's cloud products better connect both with one another and other public cloud networks operated by groups like Amazon and Google (News - Alert). In addition, EMC will be able to offer vastly improved management infrastructure thanks to Cloudscaling's innovations.

Those with knowledge of the situation, who chose to remain anonymous since the transaction isn't public, claim that the startup will sell for under $50 million while EMC considers several strategic options. Cloudscaling already uses EMC's open-source platform OpenStack to manage several computers simultaneously, and even translates the information for transfer between clouds owned by other operators.

According to EMC spokesman Dave Farmer, the company plans to use Cloudscaling's assets to “further extend our breadth of cloud platform support.”

Cloudscaling was founded in San Francisco in 2006, and since then has raised over $10 million from several investors, including Juniper Networks (News - Alert) Inc. and Trinity Ventures. While Cloudscaling CEO Randy Bias could not be reached for a comment, EMC claims that its potential options for utilizing the newly acquired assets could include a full or partial sale, or even operate as a spinoff of VMware Inc.

This sale is part of a larger trend that technology giants have been following to purchase cloud-computing startups in order to gain an upper hand on the emerging cloud market, however EMC may soon be changing its course. The company's CEO, Joseph Tucci, is scheduled to step down before this February and several investors are asking EMC to sever connections with Vmware (News - Alert) business in response.




Edited by Alisen Downey
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