Cisco announced on Friday that it will take a 1.6 percent stake in virtualisation specialist VMware.
In return, VMware has agreed to consider the appointment of a Cisco executive to its board of directors at a future date, the two companies said in a statement.
Some of the IT industry's best-known names have already taken a stake in VMware. Intel has $218.5m (£107.7m) invested in the company and VMware is hoping to raise $741.4m (£368.1m) from an initial public stock offering.
Earlier this week, Cisco said it was going to invest heavily in its Data Center 3.0 strategy, for which virtualisation could become a key component.
Cisco said the purchase of VMware's shares "is intended to strengthen inter-company collaboration towards accelerating customer adoption of VMware virtualisation products with Cisco networking infrastructure and the development of customer solutions that address the intersection of virtualisation and networking technologies".
In addition, VMware and Cisco have entered into a collaborative agreement that they hope will allow them "to expand co-operative efforts around joint development, marketing, customer and industry initiatives".