Cisco, EMC: Cloud Partners?

NEW YORK (Reuters) – Cisco Systems Inc (CSCO.O) and EMC Corp (EMC.N) are teaming up to sell a new line of networking gear, computers and storage equipment designed for use with cloud computing, according to sources familiar with their plans.

The line of products, dubbed vBlock, position the two companies to better compete against IBM (IBM.N) and Hewlett-Packard Co (HPQ.N), which sell a broader array of data center equipment than either Cisco or EMC offer on their own.

Cloud-computing refers to hosted computing services that customers access over the Internet. Analysts forecast that such services will grow far faster than an otherwise sluggish technology market over the coming years.

Cisco is providing the networking gear and server computers to the vBlock line, while EMC is contributing storage equipment and virtualization technology from its VMware Inc (VMW.N) software subsidiary, according to the sources, who were not authorized to discuss the project in public before a formal announcement next week.

Officials with Cisco and EMC declined comment.

One part of the partnership calls for the two companies to form a joint venture that will sell vBlock as a hosted service. Customers can pay for that service based on the amount of computing power and storage that they need, accessing it via the Internet.

That joint venture will assemble computer systems for customers, integrating all necessary hardware and software to make the systems work.

“It’s a ‘virtual block’ of the data center. You can buy it from them as a service, then eventually transition it to your own data center,” said one of the people familiar with the plan.

For Cisco, the world’s biggest maker of networking equipment, the venture could help kick-start the company’s move into the computer server market. It launched its first line of computer servers earlier this year.

The venture may help EMC expand its footprint in the area of cloud computing, one of Chief Executive Joe Tucci’s top areas of focus.