Intel buys stake in VMware

— 3:14 PM on July 9, 2007

The venture capital arm of Intel, known as Intel Capital, has taken a stake in virtualization firm VMware. As Ars Technica reports, the stake is worth a whopping $218.5 million, and it will give Intel control of about 2.5% of the company upon the completion of VMware's initial public offering. Intel reportedly won't control many votes in the company, but it should still get a seat on the VMware board.

Ars goes on to discuss the motives behind the deal. Although Microsoft is looking to steal VMware's thunder, the site reckons there are still plenty of good reasons to hop on the VMware bandwagon right now. One of those is simply money—VMware's initial public offering is likely to be successful, and Intel stands to make a good deal of cash. Intel also has a lot to gain from the success of any x86 virtualization vendor, since it still has the lion's share of the x86 chip market. As Ars states, "An investment in VMware is an investment in growing a vital market for Intel."

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