Networking giant Cisco and storage area networking company EMC may be teaming up to form a new joint venture to provide technology services to big companies, The Wall Street Journal reported on Thursday.
Citing unnamed sources who have been briefed on the plans, the Journal story said the new joint venture, code-named Alpine, would target large businesses and would focus on installing Cisco server and networking gear and EMC storage equipment into datacentres.
It is unclear when the joint venture might be announced, according to the newspaper. So far, Cisco has declined to comment on the speculation. An EMC spokesperson provided a statement to the Journal reiterating that the companies have always been close partners and will continue to be in the future.
Cisco has been reselling EMC storage gear for years. Cisco also owns a stake in virtualisation software company VMware, which operates as a unit of EMC.
Cisco has also been making a big push into the datacentre market. Earlier this year Cisco announced a new datacentre architecture it calls Unified Computing. This new architecture includes new hardware from Cisco, namely blade servers, an interconnection 'fabric', a chassis for the blade servers, fabric extenders and network adapters. It also includes co-ordinated support and software integration from partners such as Intel, Microsoft, EMC and VMware.
Cisco sees the datacentre market as a multibillion-dollar opportunity. The company anticipates a greater need for storage and high-speed networking within datacentres as more services and content come online. At the same time, companies are starting to virtualise their datacentres to make those operations more efficient.
Cisco and EMC each already have service businesses of their own. EMC generated about $4.8bn (£2.9bn) in revenue in 2008 from its services business, according to the Journal. This was about 32 percent of the company's overall revenue.
The Journal also said Cisco's services business generated about $7bn to the company's coffers in fiscal 2009, which was about 19 percent of total revenue.
Most of the services Cisco provides are for products that have already been sold, but the new joint venture would be different because it would entail designing and implementing products to fit into a datacentre. And as datacentres become more complex, it makes sense that Cisco and EMC would want to develop a service to help customers design a datacentre that would use their products.
Talkback
This seems to make a lot of sense, especially for EMC, which has cut service deals with most of Cisco's co-vendors in the data centre. Woe betide EMC though if Cisco decides to start selling storage hardware.
Pastor Martin Niemöller might have said:
"First Cisco came for the server vendors, and I didn't speak up because I was not a server vendor. Then Cisco came for the storage vendors..."