Activist investor Elliott Management quietly has bagged a 2 percent stake in EMC (EMC) valued at about $1 billion and immediately began doing what it does best—prodding the storage giant to spin off its 80 percent interest in virtualization kingpin VMware (VMW) and PaaS startup Pivotal to boost its share price.

The Wall Street Journal reported earlier this week that Elliott’s new stake in EMC makes it the storage vendor’s fifth largest institutional shareholder and represents one of the largest positions the hedge fund ever has taken. According to sources cited in the report, Elliott contends that EMC’s current majority ownership of VMware has held back its stock performance and that its best interests lie in shedding the virtualization vendor.

In the last 12 months, EMC’s stock price has risen by 11 percent while VMware’s has increased by 31 percent. VMware delivered better-than-expected results for its just completed Q2 2014, posting $1.46 billion in sales and earnings of 81 cents a share. Analysts had expected $1.44 billion in revenue and 79 cents per share in earnings. For Q3, the vendor guided to $1.48 billion to $1.52 billion in sales, in line with analysts’ forecasts.

The Journal reported that Elliott informed EMC of its investment about a week ago and set plans to meet with Joe Tucci, EMC chairman and chief executive. Tucci is said to strongly oppose selling off VMware or Pivotal.

An EMC spokesperson didn’t have much to say on the matter, the Journal reported. "We're always happy to meet with our shareholders," the spokesperson said.

At the heart of Elliott’s argument is EMC’s so-called “federation strategy,” centered on its data storage business and the VMware and Pivotal companies. The activist investor contends EMC’s "federated" business model is holding its stock back.

The Journal's sources indicated that should EMC elect to sell all or part of VMware its suitors could include IT heavyweights and usual suspects Cisco Systems (CSCO), Hewlett-Packard (HPQ) and Oracle (ORCL).

Sanford Bernstein IT hardware senior research analyst Toni Sacconaghi said in an investors’ note that Elliott’s play for EMC to scuttle VMware could create value for shareholders. Still, he suggested it’s not likely to happen absent Tucci’s backing, among other considerations.

“While we do believe that a separation of EMC and VMware could potentially create meaningful value for shareholders, we see two potential challenges to separating the company,” Sacconaghi wrote, pointing to Tucci not supporting an EMC breakup and VMware’s high market cap, “which could pressure VMW shares upon a spinout.”

But Elliott’s push on EMC could open the door for other activist IT investors to rattle the storage vendor’s cage, wrote Sacconaghi. “Elliott has a long track record of tech activism, and we see the potential for other large activists with tech experience to also get involved, including Carl Icahn, Greenlight and ValueAct.”

Even so, he said, “Given EMC's size, it is unclear if activist investors can build a large enough stake to enact change without significant help from some of the largest long only holders.”

WAN optimizer Riverbed (RVBD) has been embroiled in a tussle with Elliott and twice has rebuffed the hedge fund’s buyout attempts. On July 14, Elliott reiterated its February offer to buy Riverbed for about $3.36 billion, a bid the vendor already has turned away once. Elliott holds a 10.5 percent stake in Riverbed.