EMC has bought out most of Cisco's interest in the VCE joint venture for cloud computing technology, putting another twist in the rapidly shifting technology relationships in the cloud infrastructure space.

A deal has been speculated for months. I predicted this in August, as the EMC-VMware fanfare on EVO:RAIL and Cisco's perceived slighting at VMworld appeared to be the nail in the coffin for the companies working together.

But here's the catch: They're not completely divorced. The press release says that VCE will be majority owned by EMC and that Cisco will retain a 10% equity interest. Cisco and VMware will continue as “strategic partners and investors.”

Wall Street was unimpressed. VMware shares were pummeled 5% -- down 4.25 to $83.94 in morning trading -- reflecting fears that Cisco's diminished involvement in VCE mean more competition and potential products from Cisco.

But the market didn't see it as a big win for Cisco, either, as Cisco shares were down .4% on a flat day in the market. EMC shares were flat-to-down, trading at $17.17, down a few pennies in mid-morning.

Why the confusion in the market? Because it is confusing. These companies clearly don't want to be partners in VCE anymore, yet they still are partners. And they will continue to sell Vblock, VCE's flagship product line, together.

It's an evolutionary deal, perhaps designed to quell all the questions about their alliance and buy them all more time.

VCE started as a coalition in 2009 and formalized in 2011. VCE's flagship platform is vBlock, a “converged system” that includes Cisco servers and networking hardware, EMC storage, and VMware virtualization software. It is specifically designed for cloud-computing applications.

The concept was always right -- customers want a more integrated platform for compute, storage, and networking to deploy cloud services. But the question was could Cisco, EMC, and VMware always get along, when they have so many competitive products at the same time. As early as 2010 I questioned how long Cisco, EMC and VMware could coexist peacefully.

What's the company spin? VCE, EMC, and Cisco executives have already spent much of the morning patting themselves on the back, going as far as to call this the “most successful joint venture in IT history.” The press release points out that VCE surpassed a $2 billion annualized demand run-rate for Vblock and Vblock-related products and services as of Q3 2014, and that it has shown six consecutive quarters of 50%+ year-over-year growth.

It's so successful that they want to get divorced.

I have no idea if this is the “most successful joint venture in IT history.” That would take a while to prove. But the bottom line is that this deal was inevitably doomed to end in divorce from the start, no many how many cloud boxes the companies sold together. It's true that VCE has been successful in both concept and execution, but as the cloud-computing infrastructure platforms merge, everybody is going to want to own the whole thing.

In a post on VCE's Website, CEO Praveen Akkiraju also points to this growth and leadership in the category of converged cloud infrastructure, as demonstrated by the vaunted Gartner Magic Quadrant acceptance. He points out that VCE is now a $2B company its going to have to expand into new areas beyond cloud computing.

He sees benefits to being wholly owned by EMC:

“As an EMC business we will benefit from being an integral part of an established leader in the data center and cloud space and be able to tap into the incredible range of technologies across EMC, VMware, Pivotal and RSA. The team and I here at VCE are excited to embark on this next phase of our journey, and apply the unique VCE formula to help our customers on their journey to the cloud.”

This all still leaves many more questions. With Cisco still involved, what happens when Cisco starts launching competing projects? It certainly will, given that it's now positioning itself more as a Software Defined Networking (SDN) company, which ultimately means virtualization software for its hardware. Cisco has most of the components to do this today: It has plenty of servers and networking hardware, and it's working on a plan for better virtualization software with Application Centric Infrastructure (ACI).

There's a reason why its so hard for all of them to part ways: This is a fast growing market. IDC sees total worldwide spending on converged infrastructure growing at 32.8% annually to reach approximately $14.37 billion in 2017, up from $5.4 billion in 2013 (how exactly they can be accurate to within two decimal points is beyond me.)

This deal takes a step toward the inevitable dissolution of partnerships between Cisco and VMware, but the fact is the two of them remain connected to Vblock -- and the questions about their relationship will continue -- until Cisco launches its own product.