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Cisco Systems Inc., has been denying reports that it’s about to limit its involvement with the Virtual Computing Environment Company (VCE), but the direction its various backers are moving in does suggest there’s more to this than mere speculation.

VCE is a converged systems company backed by Cisco, EMC and VMware. Its main product line is its vBlocks, which incorporate networking, storage and virtualization components that come preconfigured for rapid deployment. And its backers have put their money where their mouths are, with Cisco funding it to the tune of almost $750 million, and EMC and VMware stumping up around $1.2 billion.

But on Thursday, it was reported Cisco was considering ditching the company. CRN.com reports that VCE executives told top partners at a meeting last month “not to be surprised” if there was a change of ownership, and speculated the firm could be absorbed into EMC’s greater federation of companies. No reason was given for the comments, though the VCE execs allegedly said that any change wouldn’t affect its technical or architectural roadmap.

Since then, a report has surfaced in The Register saying Cisco denies it has any plans to stop investing in VCE.

“Cisco is not pulling out of VCE,” said Gareth Pettigrew, senior PR manager at Cisco. “VCE customers and partners can be assured that they have the full commitment of Cisco and EMC.”

Nevertheless, it seems that not everything is well at VCE. The Register said the joint venture has lately been characterized by more competition than cooperation between stakeholders.

“At setup, there was a great product fit, with Cisco having no storage and EMC no servers or networking gear,’ wrote Chris Mellor. “Now Cisco has its Invicta Fibre Channel connected flash arrays, VMware has its Nicira software-defined networking product, and EMC is in the server business, albeit in a small way”. VCE also reportedly isn’t profitable.