Intel has
agreed to acquire a $218.5m stake in
VMware, a
virtualisation provider owned by
EMC.
VMware is the largest provider of server virtualisation technology, and has
demonstrated rapid sales growth over recent years. The company increased
revenues by 82 per cent to $703.9m last year and posted a net profit of $85.9m.
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The vendor is a long-time partner of Intel, which expects that the
transaction will strengthen joint marketing and sales programmes designed to
accelerate the adoption of virtualisation technology.
Virtualisation allows a single physical server to act as multiple separate
units, and is considered a major enterprise IT trend. Intel and
AMD have added
virtualisation
acceleration technology to their processors.
VMware unveiled plans in February for a $949m initial public offer (IPO) in
which parent company EMC will sell off a 10 per cent stake but retain 98 to 99
per cent of the combined voting power.
On completion of the IPO, the Intel investment will represent a 2.5 per cent
stake in VMware. The chipmaker will hold less than one per cent of the voting
power and get to appoint one board member.
The companies are also committed to expanding their partnership around joint
development, marketing and industry initiatives.
Intel is a major backer of
Xen, an open
source virtualisation technology that ships as part of the
Red Hat
and Novell
SuSE Linux distributions. Xen is considered less mature than VMware, however,
and has struggled to gain significant market share.
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