Cisco today joined Intel in buying a stake in virtualization vendor VMWare. The networking giant paid $150m for 1.6 per cent of VMWare's stock.

Intel earlier this month shelled out $218.5m for a 2.5 per cent stake in the company. The chipmaker got a better deal, paying $87.4m per percentage point relative to Cisco's $93.75m per percentage point.

27 Jul 2007

The Cisco deal values VMWare at $9.4bn. That for a company that logged $703.9m in sales last year.

The real winner here is EMC, which paid $635m to acquire VMWare in 2003 at about three time its annual sales. The firm is now selling off a 10 per cent stake in the company on the stock market and directly to industry partners, while maintaining a firm hold on its strategic direction.