Were you shocked to hear Intel's announcement about purchasing a $218.5 million stake in VMware?

If not, I guess you weren't shocked to hear that Cisco had something similar in mind. The networking giant decided that it would acquire an equity stake in VMware as well - announcing that it would purchase $150 million of VMware Class A common shares. Doing so would give the company a 1.6 percent ownership in VMware (less than one percent of the combined voting power of VMware's outstanding common stock). This amount wasn't enough to demand a seat on the board, however, VMware did agree to consider the appointment of a Cisco executive to VMware's board at a future date.

Cisco's purchase is intended to strengthen inter-company collaboration towards accelerating customer adoption of VMware virtualization products with Cisco networking infrastructure and the development of customer solutions that address the intersection of virtualization and networking technologies.

Cisco Chairman and CEO - John Chambers - will be participating at VMware's largest trade show, VMworld 2007 in San Francisco. In fact, Chambers is going to be one of the keynote speakers on Wednesday, September 12. I'm sure we'll find out more about the stock purchase, the collaboration agreement between the two companies, and any future solutions the two companies may have to further enhance the datacenter or the end-user desktops.

Posted by David Marshall on July 30, 2007 05:52 PM