Cisco Takes Stake in VMware

Cisco Systems (CSCO Quote) on Friday announced plans to buy a $150 million stake in VMware as the network technology giant looks for ways to integrate virtualization software into its hardware products.

The deal gives Cisco an entree into the research and development labs of the company that has become synonymous with fast-growing market of virtualization software. The two companies will join forces to develop and market products.

Cisco may also get a seat on the board of VMware, which is planning an initial public offering this summer. After the transaction, Cisco will hold about 1.6% of VMware, a subsidiary of data storage device maker EMC (EMC Quote). ...