Cisco Systems has agreed to invest $150 million in VMware, a leader in the hot virtualization trend, before the Hopkinton, Mass company goes public.
VMware’s virtualization software lets companies run multiple operating systems and applications on a single machine, thus saving costs on hardware.
In exchange for its investment, Cisco will get a 1.6 percent stake in VMware.
VMware’s parent, EMC, the data-storage equipment maker based in Hopkinton, Mass., plans to spin off 10 percent of the unit in an IPO. Earlier this month, Intel also agreed to invest $218.5 million in VMware.