By Anya George Tharakan
(Reuters) - VMware Inc reported quarterly revenue that beat analysts' estimates as demand rose for its virtualization software that helps cut the cost of moving data to the cloud.
VMware parent EMC Corp (N:EMC) is being bought by Dell Inc [DI.UL] in a $67 billion deal. EMC shareholders will also get a special stock that tracks VMware's shares.
EMC owns about 80 percent of VMware.
VMware also said on Tuesday that it would form a new cloud business with EMC that would operate under the Virtustream brand. EMC bought Virtustream for $1.2 billion in July.
The new cloud services business will be jointly owned by VMware and EMC.
"This initiative is around creating a tighter integration for both companies as they go after the elusive cloud opportunity," FBR Capital Markets analyst Daniel Ives said.
Virtustream's results will be consolidated into VMware's financials, starting in the first quarter of 2016.
VMware's revenue rose to $1.67 billion in the third quarter ended Sept. 30, from $1.52 billion a year earlier.
Analysts on average had expected revenue of $1.66 billion, according to Thomson Reuters I/B/E/S.
Up to Tuesday's close, VMware's shares had fallen 12.6 pct since Oct.9, the last trading day before Dell's offer for EMC.
Analysts have said that Dell's plan to create a VMware tracking stock will likely hit the virtualization software company's share price as the size of the float increases.