Cisco And EMC Cool Merger Rumors

BURLINGAME, Calif. -- Jargon abounds as Cisco, EMC and VMware partner up to sell "end-to-end" and "best-of-breed" IT infrastructure into the $350 billion data center infrastructure market.

"Or in other words," explains Barron's Eric Savitz, "they are teaming up to jump on the cloud computing bandwagon, in hopes of selling more products and services to IT managers."

The announcement pivots around bundling Cisco's ( CSCO - news - people ) networking equipment along with EMC's ( EMC - news - people ) storage and VMware's ( VMW - news - people ) virtualization infrastructure. The coterie is calling itself the "Virtual Computing Environment coalition," and the two parent companies are launching a separate joint venture called "Acadia."

The companies are filling gaps in their respective product lines, notes Channel Register's Timothy Prickett Morgan.

Given rumors of a possible Cisco purchase of EMC, Reuters' Jim Finkle has his own interpretation: With the news, Cisco and EMC "dampened speculation the two companies would merge," writes Finkle. He notes top executives from both companies saying the speculation was off-base.

Almost everyone noted the likely targets. The New York Times' Ashlee Vance states, "the arrangement should aid the company's efforts to sell its nascent line of computer servers and increase competition against the likes of Hewlett-Packard, IBM and Dell."

The stocks of both Cisco and EMC were slightly down in mid-day trading Tuesday. IBM and HP are down too. VMware is up $46 cents, or 1.2%.