Cisco Buys $150 Million VMware Stake

July 30, 2007 -- (WEB HOST INDUSTRY REVIEW) -- Networking hardware developer Cisco Systems (cisco.com) announced last week that it had acquired a $150 million stake in virtualization software developer VMware (vmware.com), buying shares of the company's common stock currently owned by VMware parent company EMC.

Following the purchase, Cisco will own approximately 1.6 percent of the total outstanding VMware stock, which amounts to less than 1 percent of the voting power of the company. However, EMC has reportedly agreed to consider appointing a Cisco executive to its board.

Cisco has reportedly said it aims to collaborate on accelerating customer adoption of VMware virtualization products along with its networking infrastructure. The company also intends to develop solutions that combine virtualization and networking technologies.

The investment coincides with Cisco's recent announcement of its Data Center 3.0 strategy, which includes a push to help turn physical functions and assets into virtual services.