"Since the UCS launch, both companies seem to have gotten closer," Kerravala says. "UCS has no storage component now, so it makes sense to add that."

It would also be the first time either company has engaged in the funding and formation of a separate joint venture company with another major vendor, Kerravala says. It could turn out that Cisco ultimately acquires the entire joint venture (much like 3Com did with its H3C venture with Huawei) like it did with internally incubated start-ups and . 

"Cisco has no internal storage expertise," Kerravala says in rationalizing a possible buyout of EMC's stake in the joint venture.

There have been hot and cold to the effect that Cisco might buy EMC as well. 

Observers note that the joint venture will continue to raise the stakes in the hotly competitive data center market. Major vendor such as IBM, HP, Cisco and Dell continue to line up strategic partners to address next generation data center requirements.