After working together quietly for nearly a year, EMC Corp. and VMware Inc. made it official last week with the storage vendor buying the smaller software company in a bid to offer combined storage and server virtualization and management tools.

The $635 million cash deal is expected to result in some 20 new offerings in the coming months, according to EMC President and CEO Joe Tucci, including a combination of EMC's Symmetrix Remote Data Facility and VMware's VMotion.

In a conference call announcing the deal, Tucci said the VMware acquisition will play a key role in EMC's strategy to help customers lower costs and simplify operations by deploying virtualization technologies across heterogeneous IT infrastructures to create a single pool of available storage and computing resources.

VMware's technology enables multiple operating systems—including Windows, Linux and NetWare—to run simultaneously and independently on the same Intel Corp.-based server or workstation and dynamically move live applications across systems without disruption.

The acquisition comes one year into a stealth project at EMC, of Hopkinton, Mass., to develop server and storage virtualization products in partnership with VMware. Tucci said he'd spoken to the EMC board of directors about acquiring VMware in mid-2004, but "it's impossible to pick perfect timing. The moment of truth moved to now."

VMware President and CEO Diane Greene will continue to run the virtual machine company as an EMC subsidiary based in Palo Alto, Calif. Greene said the two companies have "breakthrough synergy," adding that EMC users are often also VMware users. "Customers wanting storage virtualization also want server virtualization," she said.

Tucci emphasized that EMC is "100 percent committed" to allowing VMware to remain independent and free to partner with other vendors. As for EMC's strong ties to Dell Inc., Tucci said that any exclusive deal will be counterproductive but that "there's a lot of opportunity for a good partnership with Dell ... and we'll be working hard to get Dell to integrate these products."

The deal follows much speculation about potential VMware buyers. They are believed to have included Veritas Software Corp., Mercury Interactive Corp. and even Microsoft Corp. Many in the industry had expected Microsoft to buy VMware, but it purchased VM maker Connectix Corp. instead.