Unofficially dubbed "Alpine," the new operation has been hiring sales representatives. Representatives from both firms would direct the new unit, according to a report in Thursday's Wall Street Journal.
Both Cisco and EMC declined to comment on the reports, though an EMC spokesman said, "EMC and Cisco have a long-standing strategic alliance and over the years we continue to broaden and strengthen the alliance."
The firms have been edging closer ever since EMC invited Cisco to participate in the equity financing of its VMware unit several months ago. In March of this year, Cisco unveiled its Unified Computing System and named EMC as an important partner.
The two firms have been cooperating more closely on IT services and, in particular, on data center applications. The more the two firms have cooperated, particularly with Cisco's UCS products newly rich in storage and virtualization, the more alienated they have become from some former partners like HP and IBM.
An enhanced EMC-Cisco alliance makes sense on its face, because the two firms don't compete much with each other. Storage powerhouse EMC has aimed its IT services at implementation while Cisco has been a perennial leader in IT networking services.
A closer alliance between the two firms would dovetail with Cisco CEO John Chambers' new approach to drive Cisco into totally new markets while collaborating with new partners.
If both companies' IT services operations were combined, a new standalone unit would have annual revenue of more than $10 billion.
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