According to Wall Street Journal, EMC Corp. (EMC) and Cisco Systems (CSCO) will form a new joint venture. EMC is a leader in the storage hardware and software segment while Cisco is a leading provider of IP-based networking and other products.
The Journal cited that the joint venture would provide data center services to large businesses and would use Cisco’s new blade server for data centers. However, both the companies declined to provide further details.
EMC had agreements with Cisco earlier. The strategic alliance with Cisco in the data center and security business as well as enterprise market enables EMC to drive new growth opportunities within large virtualized next-gen data centers and help target the company’s next generation virtualization efforts.
We believe this relationship with Cisco will help EMC compete against Hewlett-Packard (HPQ), a leader in data center automation and has been continuously focusing on virtualization across data centers. Hewlett-Packard has also been upgrading its data centers and adding new data centers to support its outsourced services business. Beside, EMC will be able to compete with International Business Machine’s (IBM) growing presence in data center solutions.
As data center services grow complex in nature, EMC has been taking full effort to launch new services and solutions to drive growth. In the recent past, EMC released more than 30 new services and solutions to drive private cloud acceleration services helping growth in Data center services.
By using EMC, Cisco and VMware Inc. (VMW) technology users can save costs up to 45% over traditional data center approaches. VMware (86.0%-owned subsidiary of EMC) is a leading provider of virtualization solutions from the desktop to the data center.
EMC’s new product cycle, new partnerships and recent acquisitions add to the growth story, although competition is heating up for EMC in all areas. We have a neutral rating on the stock.
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