Neither company is saying a thing yet, but word is Cisco Systems (NASDAQ: CSCO) and EMC (NYSE: EMC) are joining up to sell a new collection of products designed to deliver cloud computing capabilities, Reuters reports. Called vBlock, the cloud solution is intended to help the companies compete more effectively with IBM (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ).

The partnership, which no one is admitting to, involves a joint venture between Cisco and EMC that will sell vBlock. The former will supply the networking equipment and servers, with the latter kicking in the storage gear and virtualization technology through its VMWare (NYSE: VMW) subsidiary. The joint venture will put the systems together, integrate the components for clients, and make the whole pile of cables and silicon work. A formal announcement is expected next week.

A race has broken out for Data Domain Inc (NASDAQ: DDUP). NetApp Inc. (NASDAQ: NTAP) offered $1.5 billion for the company two weeks ago, and EMC Corp. (NYSE: EMC) decided it had to get in on the action, upping the ante to $1.8 billion yesterday. Data Domain shares gained 16% on the news in late trading yesterday, resulting in EMC's bid carrying a 17% premium.

EMC sees Data Domain as its ticket into the market for software-based storage management, as the target company's products help reduce the amount of disk space needed to store data. With large, high-profile clients like AT&T Inc. (NYSE: T) and the U.S. Defense Department, Data Domain was able to double its top line to $274 million in 2008. It pulled in net income of $21.6 million last year, up from a loss of $3.7 million in 2007.

Seagate Technology (NYSE: STX) has told CEO William Watkins to hit the road, and has brought in Chairman and former CEO Stephen Luczo to replace him. Watkins, one of the funniest and most candid CEOs on the planet, has been the operational wizard behind Seagate's manufacturing turnaround in the last five years while he also cut Seagate's global workforce by half as the company became leaner and more aggressive. It also swallowed competitor Maxtor a few years ago, but has never been able to squash competitor Western Digital Corp. (NYSE: WDC), which continues to eat its lunch at every opportunity.

Still, Seagate's quarterly results on January 21st may show that the world's largest disk drive maker has fallen hard on the back of consumer spending slowdowns and reduced orders from its largest OEM and distribution partners. Seagate President and COO David Wickersham also abruptly resigned yesterday, which makes us all wonder just what kind of internal turmoil there was at the top of Seagate's management ranks.

Luczo, the banker who took Seagate private in 2000 with a group of investors only to take it public again a few years later with a fat check in his pocket, isn't a technologist. He's not an operational guy, nor a manufacturing guy. He is a finance guy who will no doubt have to turn Seagate's fortunes around once again to prop up its flagging stock price, which has plummeted from over $28 just over year ago to less than $5 today.

With the global economy ailing, companies are scrambling to cut costs. But some companies continue to post hefty growth rates.

Just look at Data Domain (NASDAQ: DDUP), which develops next-generation storage systems. For Q3, the company saw its revenues spike 134% to $75 million (it was a 23% sequential growth rate). Net income was $3.2 million or $0.05 per share. Operating cash flow came to $22 million.

Then again, Data Domain continues to rack up customers, with 355 new accounts in Q3. In all, the company has more than 2,500 customers.

Data Domain is getting lots of traction for its new product, called the DD690 (which is going beyond stuff like back-ups to more advance storage activities). The result has been that average selling prices have gone from $108,000 to $131,000.

Over the past few years, I've had a chance to talk to Data Domain's CEO, Frank Slootman. He has always mentioned that the storage industry is in the midst of a major change, and that his company was leading the way. Often, such statements are bluster. But so far, Data Domain's results show that the company is certainly riding a major growth wave.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

"We need to grow pretty fast," said Frank Slootman, the CEO of Data Domain (NASDAQ: DDUP), in an interview with me. "In the storage industry, you can only be a small company for a short period of time."

If history is any indication, he's spot-on. That is, the storage industry tends to be a winners'-take-all proposition.

The good news for Data Domain is that the company is getting bigger. In fiscal Q4, revenues spiked 151% to $44.9 million over the past year. In fact, there was a 40% increase from the prior quarter. In all, the company posted revenues of $123.6 million last year, which was a hefty 166% increase.

Basically, Data Domain is capitalizing on a megatrend; that is, the transition from tape storage to digital storage. The company calls its technology "deduplication," which is quite efficient and cost-effective.

After just a few years, the customer count now stands at 1,537 (there were 341 new customers in the past quarter). What's more, Data Domain is aggressively expanding into foreign markets, with offices in 22 countries.

And, while there's lots of talk of a slowdown in IT (information technology), Slootman isn't seeing it. "Storage is not a category you can get rid of," he said. "It's something you need.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

The Wall Street Journal is out with a story today shedding a little more light on Google's (NASDAQ: GOOG) online storage plans. The WSJ article claims hat the search giant is planning on launching an online storage service in the next few month to enable users to store documents, pictures, and music on Google's servers. Google already provides some level of storage via its image hosting service, Picasa, and Google Docs, Google's online stab at competing with Microsoft's (NASDAQ: MSFT) Office Suite.

The rumored Gdrive is one step closer to reality. This will probably be a two-tiered service with a free version and a premium version for which users will have to pony up some money. Don't look for this to provide short-term meaningful revenues for search behemoth. Something more important, though, is happening.

Seagate Technology (NYSE: STX) has begun shipping the first of its hybrid hard drives for notebook computers and smaller computing devices needing high-performance storage at reasonable cost. Hard drives are inside almost every desktop and laptop PC these days, and although they have advanced technologically with processor speeds and other performance metrics, they are still the performance bottlenecks in almost every computer. Why? At the root, hard drives are still where they were decades ago -- reading and writing data from spinning magnetic platters. Many tricks have upped performance since 2001 or so, but hard drives still look to be aging for the computing needs which always require more performance year after year.

Now, for pure storage needs, like for iPods or TiVo boxes, hard drives are fine. As laptop computers replace desktops, more performance is becoming crucial to these systems. As a result, the hybrid hard drive was born. Newer units from Seagate contain 256 Megabytes of RAM (solid-state storage) to augment those spinning magnetic platters. Here's the only wrinkle: there is a cost premium to that. Will consumers accept that? Highly doubtful, and so we have a conundrum.

Seagate's newer hybrid hard drive products may make their way to higher-end laptop computers soon, and the early adopter consumer and technologically minded will pay the expected 30% premium just to get the added performance (well, hopefully added performance). After a while, volume and economics will drive that premium down to where there is none. If Seagate really wants to become the premier supplier of new-generation hybrid drives above where it already sits with existing market share, that premium needs to come down to 10% to 15% at the most. That may crimp margin a little, but competitive laurels won't ever rest when it comes to the hard drive industry.

Sun Microsystems, Inc. (NASDAQ: JAVA) wants to make yet another strategic change in its core business, according to CEO Jonathan Schwartz. Schwartz said yesterday that the open-source and server company plans to increase its focus on storage products and services using an internal reorganization to do so.

For this, Schwartz wants to merge the server and storage business units into a single unit focusing on storage and server convergence. In effect, Sun wants to sell and service more storage systems to make up for the lack of margin in its server business. At least, that's how many are reading this move. Since acquiring StorageTek years ago, this move was anticipated. It's now here.

In addition to making StorageTek's product lineup more profitable to the company, Schwartz also may be making the move to fall in line with "virtual server" trends in the information technology field. In a sense, customers don't care about buying servers or storage, but are interested in possibly "renting" a virtual server and storage system that acts as a single unit. This is precisely what Sun will try to push to customers as it slowly dumps aging mainframes.

According to Schwartz, Sun "wants to be in a position to innovate on its [customers'] behalf, at the system level, beyond the boxes -- across blades [servers], racks, disk and tape." Let's see if this recent internal reorg and change in customer philosophy will have a positive revenue effect for Sun -- something it desperately needs.

Word continues to come through the financial news wire that major software and Internet companies are rapidly expanding their outsource business information storage and processing systems. It's obvious to me that this is one of the focus intents of Google Inc.'s (NASDAQ: GOOG) expansion in data centers. More companies are opting for outside warehousing of data storage and processing. More office desks are becoming populated with networked "dumb" terminals in place of the networked PC.

I myself utilize more than one outside source for the storage of data. Photobucket hosts a selection of my digital images as backup and I have text data backups in a few key places. For me the practice is limited to the storage of duplicate copies of non-proprietary information but for many it's becoming an essential part of business as usual.

The worldwide market for data storage and processing services is predicted to reach nearly $20 billion by 2011. I think that's a conservative estimate. I'm of the belief that the proposition is to become much more than just online file cabinets. Companies such as Oracle Corp. (NASDAQ: ORCL) can typically assist in reducing business data storage costs by as much as 12% and that's just the tip of the iceberg. Outside data handling frees up in house resources making them available for increased productivity and improved performance capabilities. In the very near future, the nature of in house data systems will begin to be looked at from a much more streamlined perspective.

There's an interesting little website that I like to visit and lurk around called, FreeSoftwareMagazine.com . For the most part, those folks are talking waaaaay over my head, but I like to go there and read with the hope that something worth while might sink into this massively opinionated brain of mine. A wonderfully gifted writer over there has documented an opinion of his which really grabbed my attention. I'm thinking that this guy is giving us a look directly into where a major portion of the future of our tech world is going.

Jabari Zakiya is the author and what he is predicting the eventual demise of the CD and DVD. His claim is that as the costs related to flash drive data storage systems recede into a consumer affordable context, those drives shall come to replace the optical disc drives we are so familiar with. He states that he believes this will change the very design and nature of our PCs. He makes a compelling case in which I'm inclined to agree.

I suspect that companies such as Sony Corp. (NYSE:SNE), Apple Computer Inc. (NASDAQ:AAPL), Hewlett-PackardCo. (NYSE:HPQ) and Dell Inc. (NASDAQ:DELL) are quite up to speed on this concept and the implications it entails. This could be an upcoming change with an impact similar to the changes in data presentation from analog to digital. I don't really think that flash drives will bring on the demise of the CDs we've come to know. I will, however, buy into the concept that the coming generations of computers are preparing to take on new systems and forms that we have only dreamed about up until now.

Recently, I took some shots at Microsoft's Private Folder on BloggingStocks.com.

It was definitely an easy target. Basically, it looked like a poorly thought out concept. That is, a Private Folder allows Windows users to keep a password-protected file folder. OK, that is good news for those who want to hide deep secrets, right? But, what if you are a corporation and employees start using it?

Apparently, these are the kinds of questions some managers fail to ask at Microsoft.