EMC-VMware Needed To Branch Out With Virtustream

"The board thoroughly investigated a lot of options and thought through a lot of options," said Tucci. "Obviously, we did this one because we thought it was the best."

EMC and VMware executives expect to make Virtustream into a multibillion-dollar organization within several years due to the demand for software services. Another key reason to establish the new company is due to the fast-shifting IT landscape and the biggest players in IT reaching outside their legacy roots, he said.

"Everybody [used to stay] neatly in their lane. There was a storage lane and that's where EMC played. There was a networking lane, that's where Cisco played. There was a server lane -- in the early days you had Sun and HP and then, of course, you had even a database land where Oracle was the big player," said Tucci. "Now you go fast forward -- nobody is staying in their lane … so it's a different world out here now and basically to play in it, you also have to do cooperation."