The US firms said they have formed a Virtual Computing Environment coalition to entice firms with ways to make computer networks more flexible while also cutting operating costs.

Virtualization involves using software to partition a single computer into an array of operating arenas, essentially getting one machine to perform as many by taking advantage of hardware's full capabilities.

People working on virtual computers get the performance and appearance of an independent machine while actually sharing servers, meaning businesses spend less on equipment, energy and maintenance.

"Customers are increasingly looking to virtualization to dramatically improve the performance and flexibility of their existing IT systems," said VMware chief executive Paul Maritz.

"Today's announcement provides a compelling vision and set of roadmaps valuable to any company looking to harness cloud computing in a fundamentally more pragmatic and non-disruptive way."

A cloud computing trend that gained momentum during the global economic crisis consists of offering software programs online as services, sparing users from having to buy, install, and maintain applications.

Cisco's computing coalition will focus on providing businesses "private cloud infrastructures" that address concerns about protecting and controlling data.

The alliance rolled out its first offering, a VBlock package for private clouds, virtual computing environments controlled and operated for individual firms or organizations.

Cisco is a networking specialist, while EMC is adept at infrastructure and VMware is a pioneering computer virtualization company.

"Today's announcement addresses our customers' greatest challenges and opportunities in the data center." said Cisco chief executive John Chambers.

"This coalition... is about an entirely new and unique approach to the data center that improves utilization, power consumption and security of information, all in a way that lowers the total cost to the customer."

More than 350 billion dollars is spent annually worldwide on data center technology infrastructure and services, according to estimates attributed to business consulting firm McKinsey and Company.

Nearly three quarters of that money goes to paying for hardware, maintenance, and operating expenses, taking a major bite out of cash companies can devote to developing and deploying new products or services, Cisco said.

The alliance believes virtualization and cloud computing could save firms about 85 billion dollars in IT costs by 2015.

"(Businesses) need to be able to shift more of their IT budgets to the development and rapid implementation of new technologies that help their organizations create differentiated business advantages," said EMC chief executive Joseph Tucci. "Many of them understand the vast potential of the private cloud."

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