(Updates with additional details and fresh share price and adds background)
By Jerry A. DiColo
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Cisco Systems Inc. (CSCO), EMC Corp. (EMC) and VMware Inc. (VMW) unveiled a joint venture to help sell a new integrated data center product, part of a broader trend by technology companies to offer a wider range of products and services.
The joint venture, called Acadia, will help sell and provide support to large businesses and cloud service providers for the new product, named "V-Block," combining EMC's storage equipment, Cisco's virtualized servers and networking gear and VMWare's virtualization technology.
The actual cloud infrastructure will be constructed by a coalition of the three companies, called the Virtual Computing Alliance. The companies plan to continue to sell the product through their existing channel partners as well.
Seeking growth in a stagnating IT spending environment, technology giants have breached new markets, turning once stalwart allies into competitors. The move by Cisco, EMC and VMWare comes amid a wave of consolidation among companies that provide hardware, software and services to corporate data centers.
Following the actions of International Business Machines Corp. (IBM) and Hewlett-Packard Co. (HPQ) to create one-stop IT shops, Dell Inc. (DELL) announced in September it will purchase IT services firm Perot Systems Corp. (PER). Software giant Oracle Corp. (ORCL), meanwhile, is awaiting European antitrust approval for its acquisition of Sun Microsystems Inc. (JAVA).
Cisco and EMC currently have an alliance to collaborate around Cisco's next-generation data center platform, the Cisco Unified Computing System, which will be a component of V-Block. EMC owns nearly 85% of VMware.
The partnership between the three companies targets what they call the "private cloud," an offshoot of one of the biggest trends in technology, cloud computing. As some companies turn to cloud computing providers that offer IT services over the Internet, others are building private clouds designed to grab some of the cost savings inherent in cloud computing while also maintaining control over their IT infrastructure.
"This coalition is about more than technology and partnership," said Cisco Chief Executive John Chambers. "It is about an entirely new and unique approach to the data center that improves utilization, power consumption and security of information."
Chip maker Intel Corp. (INTC) has also joined the Acadia venture as a minority investor.
In September, The Wall Street Journal reported that Cisco and EMC were in talks to form a new technology services venture.
Cisco shares were recently down 0.8% to $22.81. EMC fell or 1.2% to $16.23 and VMware lost 0.6%, to $38.23.
-By Jerry A. DiColo; Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com
(Roger Cheng contributed to this report.)