Talk to the hand. Photo: nadi0/Flickr

Dell and EMC have officially divorced. But everyone knew they would.

On Monday, Dell revealed that after ten years of reselling EMC storage hardware, it has parted ways with the Massachusetts-based IT giant. The announcement came a full two years before the end of the companies’ latest pact — but it was still entirely expected.

After acquiring multiple storage vendors over the last few years — including EqualLogic in 2007 and Compellent earlier this year — Dell now has its own stable of storage hardware, and though it continued to sell EMC kit with the EMC name it, even EMC knew acknowledged that the end was near.

“This has been in the works ever since Dell acquired EqualLogic way back when,” said Jerome Wendt, an analyst with research outfit DCIG, “and when it acquired Compellent, that was the nail in the coffin.”

Dell is responding to the inexorable rise of server virtualization. As the world’s data center move their application to virtual servers, reducing their need for good old fashioned physical servers, Dell’s traditional business takes a hit. But as the need for physical servers drops, the need for storage only rises. Typically, companies will support their virtualized servers storage arrays that run alongside their physical servers.

“As servers get virtualized, there goes Dell’s profit margin. That’s just money going up in smoke. But the amount of storage is going up because most people are putting their virtualized servers on these external storage arrays,” said Wendt. “And that’s where all the profit margin in.” Dell is moving to where the profits are. And it doesn’t want EMC taking a slice of the pie.

Dell and EMC declined to comment. But as far back as January 2010, EMC does publicly discussing its relationship with Dell as “mainly competitive.”

In recent years, HP — Dell’s primary rival — has built up its own storage business in similar fashion, and though it continues to “OEM” storage hardware from Hitachi Data Systems (HDS), HP storage senior vice president and general manager David Scott says this is rather different from Dell’s (ex-)relationship with EMC. “A couple of our product lines are based on technology we OEM rather than resell. We use our brand, rather than theirs,” Scott told Wired. “Our relationship with Hitachi is very strong.”

Dell actually OEMed some EMC kits as well. But yesterday, it put an end to that too.