5:45 PM -- Xsigo Systems Inc. says its virtualization gear is being used in the VMware Inc. (NYSE: VMW) booth at this week's VMworld tradeshow.

Which seems like a nice bit of startup bragging rights, considering VMware is the star of VMworld, which is being held in San Francisco.

What's even better for Xsigo, from a PR standpoint, is that Cisco Systems Inc. (Nasdaq: CSCO) didn't get the job. Cisco's virtual I/O would have been an option, especially considering Cisco owns about 7 percent of VMware shares and has former CFO Dennis Powell on VMware's board.

Xsigo is the company that's peddling virtual I/O, a box that allows servers to change personalities to run arbitrary applications. What makes the company particularly noteworthy is its roster of executives from Juniper Networks Inc. (NYSE: JNPR), plus big-name VC backing and a board stacked with IT-industry bigwigs. (See Xsigo Gets Real, Gets Virtual.)

Keep in mind, this is just one booth, even if it is VMware's. Cisco, HP Inc. (NYSE: HPQ), and Xsigo are all getting used for virtual I/O in VMware's larger demo of a next-generation data center. (It sounds similar in spirit to the multivendor network that's built at Interop every year.) But it's interesting to see Xsigo get the nod from VMware.

— Craig Matsumoto, West Coast Editor, Light Reading