A new dawn as Broadcom/VMware deal closes: 'brace for impact'

A new dawn as Broadcom/VMware deal closes: 'brace for impact'

While the new-look VMware is set to officially play out, a few key announcements have made their way through.

Credit: Photo 151434171 © Andreistanescu |

As Broadcom completed its acquisition of VMware market analysts are warning to “brace for impact.”

Broadcom officially closed its US$61 billion acquisition of VMware on 22 November and locally, some of the VMware signage has already been removed, to be replaced with the new “VMware a Broadcom company” logo. 

While the new-look VMware is set to officially play out, a few key announcements have made their way through including the resignation of VMware CEO, Raghu Raghuram and taking up a “strategic advisory” role to Broadcom CEO Hock Tan. 

Raghuram took to LinkedIn to share his news along with a modified email he sent to the company. 

“All of you would have seen the announcements from Broadcom regarding the close of the transaction, the go-forward strategy, and the organisational structure under the leadership of Hock Tan,” he stated. 

“It has been my absolute privilege and honour to lead VMware for the last three years. During this time, we have navigated a dizzying journey together that spans the full lifecycle of a business — from raising debt financing to spinning off from Dell and operating as a standalone public company to being acquired by Broadcom and executing through a complex regulatory process to finally arrive at this milestone moment in VMware’s history.

“Throughout it all, I have been amazed at the resiliency and focus of the VMware team as we repeatedly beat our financial goals, broke new ground with our product releases, and took time to celebrate the values that make us a special company.

“So regardless of whether you are joining Broadcom or starting your next chapter elsewhere, I wish each of you the very best and all the success in making a positive impact in this world.

As for myself, I plan to take a short break, rejuvenate, and then find a new and impactful mission into which I can pour my energy and passion.”

At the core, Broadcom said it will invest in VMware Cloud Foundation, with the organisation looking likely to be split across various business units that will also feature VMware Tanzu; Application Networking (Load Balancing) and Advanced Security; and VMware Software-Defined Edge for telco and enterprise. 

During VMware Explore this year, Tan indicated a commitment to “immediately” invest an additional US$2 billion a year to “better unlock customer value” once the proposed VMware acquisition is finalised.

Tan has so far stated Broadcom’s track record of investing in the businesses it has acquired to drive sustainable growth, and that will continue with VMware for the benefit of the stakeholders. 

“We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world's leading infrastructure technology company,” Tan said. “With a shared focus on customer success, together we are well positioned to enable global enterprises to embrace private and hybrid cloud environments, making them more secure and resilient.”

However, Forrester principal analyst Tracy Woo has cautioned that “for a window into the future, simply look back to its previous two major acquisitions, CA and Symantec."

“Between the two companies, customer support reduced significantly, and innovation was stunted from deprecated revenue investment in R&D (3 per cent drop) and sales and marketing (22 per cent drop). Broadcom claims that the VMware acquisition will be different, but its path seems to follow the same as Symantec’s,” Woo said. 

So, what should VMware customers expect? Woo warned over the next few years the VMware revenue stream will face significant challenges as customers leave in droves and there will be significant streamlining and rebranding as VMware protects key assets, while competitors in other areas will move in with force. 

“While the deal has closed, don’t expect massive disruption immediately. VMware’s software is heavily embedded in many mission-critical applications in major enterprises. Plus, organisational change post acquisitions take a while to fully set in,” Woo said.  “The next six months, however, will be telling about how Broadcom intends to navigate its newly found role in the cloud software world. 

“Don’t hold your breath on a true success story in which VMware remains unaltered and its own independent entity. Do expect price hikes, degraded support, and a VMware with a more diluted value prop.”

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags VMwarebroadcom


EDGE 2024

Register your interest now for EDGE 2024!

Brand Post



How MSPs can capitalise on integrating AI into existing services

How MSPs can capitalise on integrating AI into existing services

​Given the pace of change, scale of digitalisation and evolution of generative AI, partners must get ahead of the trends to capture the best use of innovative AI solutions to develop new service opportunities. For MSPs, integrating AI capabilities into existing service portfolios can unlock enhancements in key areas including managed hosting, cloud computing and data centre management. This exclusive Reseller News roundtable in association with rhipe, a Crayon company and VMware, focused on how partners can integrate generative AI solutions into existing service offerings and unlocking new revenue streams.

How MSPs can capitalise on integrating AI into existing services
Access4 holds inaugural A/NZ Annual Conference

Access4 holds inaugural A/NZ Annual Conference

​Access4 held its inaugural Annual Conference in Port Douglass, Queensland, for Australia and New Zealand from 9-11 October, hosting partners from across the region with presentations on Access4 product updates, its 2023 Partner of the Year awards and more.

Access4 holds inaugural A/NZ Annual Conference
Show Comments