Cisco ( CSCO), EMC ( EMC) and VMware ( VMW) have finally joined forces in a widely anticipated technology partnership, touting pre-packaged bundles of hardware and software aimed at corporate data centers.Dubbed Vblocks, the bundles comprise EMC storage, VMware virtualization software and Cisco's UCS server hardware. The companies have also formed a joint venture called Acadia, which is geared toward supporting private clouds managed solely for one organization. Public clouds such as Amazon's ( AMZN) S3 and EC2 offerings, on the other hand, provide services to multiple customers. "The customer feedback from most enterprises has said that they would like the benefit of public clouds, but on equipment or infrastructure that they have on premise," Brian Byun, VMware's vice president of alliances, told TheStreet. The pact, not exactly a bolt out of the blue, follows months of rumors about a partnership. Cloud services, which offer compute power or data storage via the Internet, have been gaining momentum recently, with companies such as Amazon, 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 becoming more popular among those looking to juggle several operating systems and applications. The technology also is one way that budget-minded firms can reduce the amount of hardware within their data centers. A pre-configured, pre-tested bundle of technology is also well suited to the current economic climate, according to Howard Elias, president of EMC's global services and resource management software group.
"Customers are looking for dramatic improvements in acquisition costs and operation costs as they want to implement private cloud infrastructures," he told TheStreet. "That's what the Vblock packages deliver." For Cisco, the joint venture could help its controversial UCS product, which is seen as a direct challenge to long-time partner Hewlett-Packard ( HPQ). EMC in turn could strengthen its ongoing cloud strategy, using Cisco's vast customer base as customer base as leverage. Even EMC rival NetApp acknowledges that the partnership is a crafty move by Cisco. "We view today's announcement as a clever attempt by Cisco to sell UCS servers into EMC's install base," sniffed Jay Kidd, chief marketing officer at storage specialist NetApp. "We also feel that this announcement further validates the trend that we're seeing as more and more enterprises move to a virtualized dynamic data center infrastructure." Cisco, EMC, and VMware have clinched a handful of service provider partners for their hardware and software bundles. Companies already signed up to support the Vblocks include Savvis ( SVVS), Terremark ( TMRK), SunGard and Orange Business Services, although Elias says that others are in the pipeline. "We have a number of trials in place with others that will be part of forming that ecosystem," he said. EMC shares dipped 7 cents, or 0.4%, to $16.36 Tuesday, and Cisco's stock also slipped, falling 18 cents, or 0.78%, to reach $22.82. Shares of VMware, in contrast, rose slightly, gaining 40 cents, or 1.04%, to reach $38.85. -- Reported by James Rogers in New York