EMC Buying Out Cisco's Stake in VCE Joint Venture
The data storage vendor will own more than 80 percent of VCE when the deal closes, while Cisco will retain 10 percent.Data storage giant EMC is buying out most of Cisco Systems' stake in converged infrastructure vendor VCE and will fold it into its federations of businesses. The two companies and VMware—of which EMC owns about 80 percent—launched VCE in 2009, offering an integrated data center solution called Vblocks that included servers and networking capabilities from Cisco, storage from EMC and virtualization technology from VMware. Since then, the joint venture has grown rapidly, and officials with both Cisco and EMC said that the increasing demand for VCE products coupled with the increasing competition in the converged infrastructure space calls for a more traditional business model that will enable VCE to be more agile and responsive. As a joint venture, the company essentially had to answer to multiple parties on everything from product strategy to financial issues, officials with Cisco, EMC and VCE said Oct. 22 during a conference call with journalists and analysts. It was difficult for VCE officials "having to go to two different parents all the time for investments," said Gary Moore, president and COO at Cisco and co-chairman of the VCE board of directors. "VCE will now be able to move much faster."
As a part of EMC, it also will be able to more easily draw on the capabilities of other companies under the EMC umbrella, including RSA for security and Pivotal for big data and platform-as-a-service (PaaS), said VCE CEO Praveen Akkiraju.