Sources: VMware Building 'Project Mystic' Converged Infrastructure Appliance For EMC

VMware and EMC are teaming up to develop an EMC-branded converged infrastructure appliance that could have a major impact on both vendors' partner ecosystem relationships, CRN has learned.

VMware is developing the software for the converged infrastructure appliance, code-named Project Mystic, and distributors will assemble the hardware, sources familiar with the matter told CRN Friday.

The Project Mystic appliance will initially be EMC-branded, but could eventually be made available to server vendors, sources said. Some partners said VMware and EMC could unveil Project Mystic at VMware's VMworld conference in August.

VMware declined comment, citing its policy of not responding to rumors or speculation. EMC, which owns 80 percent of VMware, didn't respond to a request for comment.

[Related: VMware To Begin Selling VSAN Next Week, But Still Isn't Sharing Pricing ]

Converged infrastructure appliances, which include servers, storage, networking and virtualization running on industry-standard server hardware, are a hot market at the moment. Startup Nutanix has raised more than $172 million in venture capital, and Simplivity, its main rival, has raised around $100 million.

Both startups are partners with VMware, but sources told CRN these relationships could see some strain now that parent EMC is becoming a full-blown competitor.

Project Mystic could also have implications for VCE, the converged infrastructure joint venture between EMC, VMware and Cisco, according to sources close to the situation.

Project Mystic could be a response to VCE's decision not to support VMware's NSX software-defined networking technology by default in its vBlock converged infrastructure product. VCE will support Cisco's competing ACI technology instead.

"Customers who have chosen NSX virtual networking technology must obtain deployment services and technical support for NSX directly from VMware, facilitated through the VCE and VMware Cooperative Support Agreement," a VCE spokesperson said in an email.

VCE and EMC have clashed recently over VMware's role in VCE, which appears to be diminishing as a result of VCE's Vision Intelligent Operations management tool, sources said.

"The whole NSX thing is happening because VCE does not rely on VMware at all," one partner told CRN, speaking on condition he not be named. "With Vision IO, VCE can tie into OpenStack or Hyper-V. VCE's main focus right now is Cisco and EMC."

Having VMware handle the software piece of Project Mystic could help EMC avoid upsetting Cisco, and lesser extent, other partners like Brocade on the networking side and Lenovo on the server side.

Project Mystic could explain why VMware told Nutanix not to come to its partner conference last month because it’s now considered a competitor. At the event, Dave O'Callaghan, senior vice president of global channels and alliances at VMware, said vendors like Nutanix and Veaam -- which was also uninvited -- would be welcome at VMworld.

Sources told CRN the friction between VMware and Nutanix also stems from Nutanix poaching around a dozen system engineers and software engineers from VMware, many of them senior-level people. Neither VMware nor Nutanix responded to a request for comment.

Nutanix has been vocal about disrupting the storage area network and network attached storage markets with its virtual array. Now EMC, which sells SAN and NAS products, is trying to counter with some disruption of its own.

With additional reporting from Joe Kovar