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Cisco and EMC Edge Closer

Cisco Systems Inc. (Nasdaq: CSCO) is poised to announce its certification and resale relationship with EMC Corp. (NYSE: EMC) as soon as this week, according to Wall Street sources -- and Cisco may also be working on a custom-built SAN switch at the request of the storage giant.

A reseller deal between Cisco and EMC has been in the pipe for some months, but the qualification process has been long, because of rigorous testing on EMC's part, according to EMC representatives. In a note yesterday, Lehman Brothers said the two companies may announce a "certification/resale" deal this week. Cisco and EMC declined to comment officially on the status of their negotiations.

IBM Corp. (NYSE: IBM), Hitachi Data Systems (HDS), and Hewlett-Packard Co. (NYSE: HPQ) have all announced their intentions to resell Cisco's MDS 9000 Fibre Channel switches soon (see IBM Tells Cisco: 'Let's Go!', HP Next to Green-Light Cisco?, and HDS Certifies Cisco MDS 9000).

Analysts are encouraged by the news that EMC and Cisco seem to be moving closer to a deal. The majority of FC switches are sold through the major storage systems vendors, so analysts say it is critical for Cisco to gain the backing of EMC, the dominant SAN infrastructure supplier in the marketplace. "We consider this development a strategic positive, following what has been a somewhat lengthy negotiation process," says Lehman analyst Tim Luke.

Digging into exactly what Cisco has had to do to win this support, however, has turned up some interesting information.

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