Intel is going to buy $218.5 million worth of VMware's Class A common stock.

That means it will own 2.5% of VMware once the EMC subsidiary goes public, but less than 1% of the voting share. However, Intel will get a board seat.

VMware told the SEC Monday that it is expecting to sell 33 million Class A shares for $23-$25 apiece and raise $741.4 million after expenses assuming a $24 price. Of course, pricing like that has a tendency to wander and may be just the floor. Oh, and there's a 4.95 million-share over-allotment.

EMC will continue to control VMware. It will own 32.5 million and all of the more powerful 300 million Class B shares, representing about 89% of the company.

VMware explained Intel's position by pointing out that most of the systems it virtualizes are based on Intel processors. The pair cut what they called a "routine and customary partnering agreement that expresses their intent to continue to expand their cooperative efforts around joint development, marketing and industry initiatives."

VMware will be listed on the New York Stock Exchange under the symbol "VMW." EMC is also listed on the Big Board.

IDC estimates that virtualization will be worth $11.7 billion by 2011, twice what the market's worth now, and VMware is expected to be at the crest of the wave because Microsoft and XenSource has been slow getting their surfboards in the water. Forester doesn't figure them for serious contenders until 2010.

Meanwhile, VMware announced the general availability of its Lab Manager 2.5, an enhanced version of its six-month-old virtual lab automation system, claiming it is the most advanced of its species on the market and the only one to offer "fenced deployment," enabling simultaneous use of library configurations by multiple users as well as capturing complex system configurations in a live state.

The widgetry now supports Solaris 10 x86 and there's experimental support for Vista.