Cisco Systems is to buy $150m of VMware shares, or around 1.6% of the processor virtualization specialist’s outstanding common stock.
The planned investment comes only two weeks after Intel’s announcement that it is to plough $219m into VMware.
VMware is currently 100% owned by EMC. The proposed Cisco and Intel stakes are not directly related to EMC’s plan to float around 11% of VMware on the open stock market, some time this year.
Cisco said that VMware is considering the appointment of a Cisco executive to the VMware board of directors. That is part of the return that Cisco will get from its investment, alongside what is likely to be a healthy financial reward from the investment.
As Cisco said, its investment is intended to strengthen inter-company collaboration. A seat on the board will make Cisco privy to all major developments at VMware. Intel’s investment is also set to give it a VMware board seat.
Cisco said that it and VMware hope to extend the benefits of virtualization beyond the datacenter to remote offices and end-user desktops.