EMC (NYSE:EMC), the world’s biggest maker of corporate data storage equipment, has signed a partnership with Verizon-Terremark to offer private cloud computing platforms to companies that plan to move to cloud-based computing environment. It is pushing to improve its position as an infrastructure provider for cloud computing platforms and has signed up with AT&T and Singapore Telecommunications on similar deals. Terremark now joins as a platinum member of EMC’s cloud service provider program, dubbed EMC Velocity.
See our full analysis on EMC
Private Clouds To Drive Cloud Market Growth
Private clouds are gaining popularity and cloud computing seems to be in the next phase of growth. Private clouds usually involve infrastructure managed for one organization with hardware and software tailor-made to meet the needs of the organization. Earlier, the cloud involved multiple companies sharing space on the same servers. Verizon-Terremark will use EMC’s infrastructure for its other cloud offerings that will be standardized to run on the infrastructure.
EMC views hybrid cloud as a big opportunity as companies can have their own in-house private clouds to retain sensitive data and information and move the rest to a public cloud. This will enable easier movement of workloads between the two clouds and ensure seamless shifting to different cloud providers. Having access to a public cloud helps scale applications easily, and EMC claims its hybrid cloud strategy is different from Amazon (NASDAQ:AMZN) and Oracle (NASDAQ:ORCL) offerings.
Growth Opportunity For EMC
The financial details of the agreement were not disclosed but was stated as “significant for both companies”. EMC is partnering with multiple cloud service providers to host services on its infrastructure. This is likely a bid to own the network and hardware infrastructure while remaining provider agnostic. This will allow EMC to be agile and quickly sign up fast-growing service providers while dropping other services, if needed. This collaborative initiative will also leverage common channels through Terremark and EMC to market a range of cloud-based options for companies seeking to move to the cloud.
Information storage is currently the most valuable division for EMC and constitutes ~47% of its stock value. If a hybrid cloud increases EMC’s storage hardware market share by 10% by the end of our forecast period, we can expect an upside of ~5% to our current price estimate.
We have a $45.55 Trefis price estimate for EMC which is significantly above the market price.