Intel buys stake in VMware

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.”

Comments closed
    • BenWang
    • 12 years ago

    Look for incompatible with AMD clause in the next release of VMWARE.

    • Krogoth
    • 12 years ago

    You know Virtual Machines are the next killer app when Intel starts to investing in it. 😉

    • joneljay
    • 12 years ago

    I don’t get it…didn’t EMC buy VMWare long time ago?

      • muffin_mutt
      • 12 years ago

      When I heard Intel will buying a stake in VMWare I was initially confused too. Then I read that VMWare unit is to be spun off with the funds raised by the ‘IPO’ to repay debts and fund expansion. The EMC exec team is very good.

    • Forge
    • 12 years ago

    I’d imagine this also has a lot to do with VMware spending a lot of their time and money making VMware work optimally on Opterons. Heck, they don’t even use VT in most situations. VMware claims they only got worthwhile benefits from VT when running 64bit VMs on 32bit hosts, no other case, while Intel claims VT will speed up any VM on any host OS. I guess having a seat on the board might change that attitude.

      • d0g_p00p
      • 12 years ago

      I am running VMWare with VT enabled on a C2D and honestly I cannot notice any speed difference. Even setting affinity to use one core seem faster than having VT turned on. I have to try the 64-bit thing and see if that makes any difference.

    • albundy
    • 12 years ago

    but why? intel likes control, so i am shocked by this move.

    • blitzy
    • 12 years ago

    that’s a lot of money for such a small %, I wouldn’t have thought VMware was big enough to command that sort of price

      • just brew it!
      • 12 years ago

      Yeah, no kidding… I knew VMware was big, but I had no idea they were *[

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