Data Center Definitions and Solutions
Cloud Computing Definitions and Solutions

The partnership, which also includes virtualization software vendor VMware, is set up in two parts: one is a Virtual Computing Environment coalition to develop the new products; the other is a joint venture, called Acadia, to train customers and partners on how to install and use the products.

Cisco and EMC are lead investors in Acadia, while VMware and Intel are minority investors. Acadia will have its own CEO, which the companies are searching for, and an initial staff of 130. Acadia's main mission will be to accelerate product sales and deployment, perform initial operating and then transfer operations to customers or partners.

"It will be a repository of knowledge transfer and best practices," said EMC CEO Joe Tucci, during a Webcast announcing the coalition and joint venture.

The collaboration between the three companies is targeting a market the companies say -- citing data from McKinsey and Company -- exceeds $350 billion annually. Half of that amount is spent on capital expenses -- product acquisition -- and half on operating expenses.

Roughly 70% or more of those costs are allotted to maintaining existing infrastructures, leaving 30% or less for new technology purchases. The companies also say that approximately $85 billion can be addressed with data center virtualization and private cloud technology by 2015.

"When we look back on this in five years from now, we'll see that this was the most major change in data centers and cloud computing made in this decade," said Cisco CEO John Chambers on the coalition's potential impact.

Some analysts say the collaboration between Cisco, EMC and VMware could further strain relations and partnerships each company has with other major vendors in the data center market -- notably, IBM, HP and Dell.

"They're putting themselves in direct competition" with those powers, says Deni Connor, principal of Storage Strategies NOW. "And this may jeopardize VMware's relationship with its server and operating system partners," which include IBM, HP, Dell, CA, NetApp and Sun Microsystems. Connor sees the division widening between these camps as they all compete for the lion's share of data center expenditures.

VMware CEO Paul Maritz downplayed the impact to his company's relationships during the Webcast.

"We remain in our commitments," he said. "We're not denying technology to anyone. There's no reason for our relationships to change."