Cisco, EMC starting new joint venture company?

The rumored company will be funded by Cisco and EMC and will focus on developing an integrated datacenter platform

Cisco and EMC are said to be forming a joint venture company to develop an integrated datacenter platform for computing, networking, and storage.

According to several sources and a post in The Register, the joint venture will be a separate company funded by both Cisco and EMC. The name of the company could not be learned by press time, but sources say Cisco and EMC are actively recruiting sales personnel for it.

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Cisco says it does not comment on rumors, and EMC also declined to comment.

The joint venture does not involve virtualization software vendor VMware, sources say, which is majority owned by EMC and in which Cisco is a significant investor. At the EMC Forum earlier this month, the three companies formed the so-called "VCE" alliance to jointly develop products for cloud computing.

VMware technology is a vital component of Cisco's new Unified Computing System (UCS), which integrates server virtualization and network and storage access into a single platform. What UCS lacks, however, is a storage component, says Zeus Kerravala, an analyst with the Yankee Group.

EMC was one of the showcase partners during the UCS launch.

"Since the UCS launch, both companies seem to have gotten closer," Kerravala says. "UCS has no storage component now, so it makes sense to add that."

It would also be the first time either company has engaged in the funding and formation of a separate joint venture company with another major vendor, Kerravala says. It could turn out that Cisco ultimately acquires the entire joint venture (much like 3Com did with its H3C venture with Huawei) like it did with internally incubated start-ups Nuova and Andiamo.

"Cisco has no internal storage expertise," Kerravala says in rationalizing a possible buyout of EMC's stake in the joint venture.

There have been hot and cold rumors to the effect that Cisco might buy EMC as well.

Observers note that the joint venture will continue to raise the stakes in the hotly competitive data center market. Major vendor such as IBM, HP, Cisco and Dell continue to line up strategic partners to address next generation data center requirements.

Dell, for example, has agreed to OEM Brocade's newest storage and Ethernet/IP switches in an effort to build out its data center portfolio beyond servers, according to a report in the Wall Street Journal. IBM also OEMs Brocade's Ethernet/IP switches and routers, and HP private-labels the company's 8800 FibreChannel-over-Ethernet switch.