Intel Invests $218 Million As VMware Prepares For IPO - InformationWeek

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Software // Enterprise Applications

Intel Invests $218 Million As VMware Prepares For IPO

As underwriters review the numbers, the virtualization software company released version 2.5 of its Lab Manager product.

As Wall Street underwriters prepared to launch the much-anticipated IPO for EMC's VMware subsidiary, Intel Capital and VMware announced Monday that the processor manufacturer will invest $218.5 million for a 2.5% stock ownership in the software virtualization company.

VMware announcements came fast and furious Monday as a Securities and Exchange Commission filing revealed that VMware expects to raise $741.4 million on a $24-a-share offering price. Also Monday, VMware announced the availability of its Lab Manager 2.5, the company's virtual lab automation system.

With its new investment in VMware, Intel extends its longtime relationship with the EMC unit. In an announcement, Intel and VMware said: "VMware's base virtualization platform virtualizes the Intel architecture. Intel microprocessors comprise the majority of the systems on which VMware's virtualization products are deployed."

At the completion of the IPO, Intel expects to own about 2.5% of VMware's total outstanding common stock, and Intel expects to appoint an executive to VMware's board of directors.

Also following the offering, EMC will continue to control VMware.

The lead underwriters for the VMware IPO are Citigroup Global Markets, JP Morgan Securities, and Lehman Brothers.

In announcing the availability of its VMware Lab Manager 2.5, the company noted that the new release will assist IT managers using VMware Infrastructure 3 to automate multimachine software configurations. The firm also unveiled a free ROI calculator called VMware Lab Manager ROI that helps predict the potential value of VMware Lab Manager for use in planned configurations.

Borland Software and Genilogix announced Monday new automated test software for VMware Lab Manager. Users can utilize the automated test software to thoroughly test applications of Lab Manager before they're implemented. Brad Johnson, a director of product marketing for Borland Lifecycle Quality Management, said the automated test software enables users to eliminate "many of the time and cost constraints of multiconfiguration and cross-platform software application testing."

The Genilogix test software is in beta test status for use with HP Quality Center for integration with VMware Lab Manager.

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