Huh, Broadcom buying VMware!

by Corey Evans

Yep thats right, the big boys are thowing their money around and for a sneaky 61 Billion dollars and stock, Broadcom have announced they're buying VMware! There are numerous reports all over the show about the news and you can read the definitive word on both the VMware and Broadcom websites.

Initial thoughts

So how we feel about this?? Well, initially I was somewhat concerned and nervous after reading some reactions like this and this online. But all is not lost and I think its still possible to see a positive future for them. VMware has always been the leader in Enterprise Virtualization space and/or private cloud and realistically there's no reason to think this will change any time soon. Sure, the VMware portfolio has gown over they years as they've themselves made acquisitions to broaden their revenue streams and make moves towards the public cloud.

Their domance, and indeed saturation of the private cloud is what both enables and I would suggests compells them down this path of modern application delivery, microservices and containers in a multi-cloud reality. This is certainly where there is an opportunity for VMware to grow and become a key player in the public cloud.

Brief History

  • 1998 - company founded
  • 2004 - purchased by EMC for $625M
  • 2016 - joined Dell when they purchased EMC
  • 2021 - Dell spins off its 81% of VMware
  • 2022 - acquired by Broadcom (assuming this goes through of course!)

But why, Broadcom?

Good question - one word would probably do but I'll use two: diversification  and money 💰💰!! Its always about the $$ when it all comes down to it. Broadcom have historically played in the hardware manufacturing or chip based markets, but have more recently been diversifing into the software space ( i.e. acquisitions of CA Technologies and Symantec). This is another big push further down this path of diversification. Presumably, they either see the potential for growth and new markets with VMware or they think they can significantly reduce costs and therefore increase profits.

This, I suppose is where the fear comes in........🫣. "Reduce costs" sounds a lot like a reduction in staff numbers? What will happen to research/development plans? Will any of that mean a reduction in the quality of the product we have today* and VMware's ability to support its customers?? Surely they wouldn't hike prices would they 😱?! Let's all hope not.

All these things remain to be seen I guess but since the news broke I've also started reading some positive takes on the acquisition. While I'm sure there are some nervous folk over there at VMware as is always the case with M & A's, there are still encouraging sounds coming from key figures which is encouraging. VMware has survived acquisitions before and hopefully will this will be no different.

Final thougths

The Challenge and I think the key here, is that VMware must retain its identity, its multi-vendor neutrality (as it did when purchased by Dell) and its growth into the public cloud. Word that the Broadcom Software Group will rebrand and operate as "VMware" is hope the first of these is a possibility.  For the other two we'll just have to wait and see 🤞🏼

* lets just agree not to talk about the quality of vSphere 7 Update 3 with was released then pulled 🤦🏼‍♂️!