Storage giant EMC is to buy software company VMWare, a move that further strengthens EMC's growing software portfolio.
The £364m cash transaction is expected to be completed in the first quarter of 2004, around the same time that EMC is expected to close its £970m acquisition of content management software company Documentum.
VMWare makes virtualisation software that allows users to run multiple operating systems on the same machine.
The company has had some success selling its software to companies looking to consolidate several different applications onto the same physical machine, and has, of late, focused on developing management capabilities for its software.
Earlier this year EMC acquired storage management software company Legato in a stock transaction valued at $1.3bn.
After the acquisition VMWare will continue as a subsidiary of EMC.
Robert McMillan writes for IDG News Service