NEW YORK ( TheStreet) -- Speculation is mounting that Cisco ( CSCO), EMC ( EMC) and VMware ( VMW) are about to forge a major cloud computing partnership, which may be announced at the VMworld show in San Francisco next week. A joint venture between the three companies appears to be imminent, according to Paul Mansky, an analyst at Canaccord Adams. "We have been able to confirm, with an 85% level of confidence, this is in fact happening," he wrote, in a note released Friday. "Although unveiling sounds more mid-September, there is potential for announcement at VMworld in San Francisco next week." According to Mansky's sources, the deal will likely involve a bundled product that includes Cisco's UCS server, EMC storage and VMware virtualization software. This will address "Cloud Compute" applications, he added. The joint venture is also expected to include test labs and joint marketing efforts with a global push coming in September or October. "EMC plans to compensate both EMC and Cisco field reps for 100% of the value of the combined solution sale," wrote Mansky, explaining that the storage giant is mandating "solution specific" training for its technical sales teams. Cloud services, which offer compute power or data storage via the Internet, have been gaining momentum recently, with companies such as Amazon ( AMZN), Microsoft ( MSFT) and IBM ( IBM) all pushing the technology as a way for firms to avoid the upfront costs of hardware and software. Virtualization, which lets users divide physical hardware into multiple "virtual" chunks, is also becoming more popular among those looking to juggle several operating systems and applications. The technology is seen as a way for budget-minded firms to reduce the amount of hardware within their data centers.
For Cisco, the joint venture could help its controversial UCS product, which is seen as a direct challenge to longtime partner Hewlett-Packard ( HPQ). EMC in turn could strengthen its ongoing cloud strategy, targeting its wares at Cisco's vast customer base. EMC subsidiary VMware has also thrown its weight behind cloud computing. Earlier this year, the virtualization trailblazer unveiled its vSphere 4 technology, which it describes as the world's first operating system for building clouds built within users' own organizations. Cisco, EMC, and VMware all declined to provide comment for this story. There has already been talk of the three firms strengthening their existing relationship, dubbed VCE, although The Register Web site reported this week that VMware will not be part of the joint venture. Shares of EMC, Cisco and VMware all were rising on Friday, with VMware registering the biggest gain. The software maker's stock grew $1.32, or 3.77%, to reach $36.30, outpacing the broader advance in tech stocks that saw the Nasdaq rise 0.19%.