VMware’s vision solidifies with Broadcom’s reassurance

It's a deal that has been in the works for almost a year and a half, having fallen on the desks of all major regulators before spending an uncomfortable amount of time lingering at the behest of Chinese regulators.

At long last, Broadcom has acquired VMware for $61 billion. The delay has been more political than economic, and it’s no coincidence that confirmation has come at a time of new thawing relations between the PRC and the US. But for partners and customers caught up in the delay, the long wait is finally over.

Since Broadcom confirmed it would acquire VMware, its plan has been sketched out in stages. The chip and software giant has big plans for VMware, which for its own part has maintained a steady course of self-improvement.

A tale of two conferences

This year’s VMware Explore Barcelona saw the company present a united front and clear vision, while also forced to limit discussion around subjects pertaining to Broadcom almost altogether.

On the one hand, VMware is going from strength to strength, with announcements for cloud data management and the addition of IBM and Intel to its private AI offering. Partners and customers alike seemed pleased with the efforts the firm is making, especially when it comes to the unification of its formerly sprawling stack under more uniform titles.

On the other hand, the shadow of the Broadcom acquisition loomed large over the event and there was a pronounced sense of anticipation for the deal to go through.

ITPro saw VMware prove itself as a firm with a vision for its future, grounded in a methodical strategy and strong partners such as Nvidia and Intel. Innovation and digital transformation with customers like Audi through its use of computer vision in the logistics and retail sector only strengthened this view.

But this all hinged on the specifics of Broadcom’s plan for VMware. With the acquisition now successful, Broadcom has made clear that it wants to invest heavily in VMware Cloud Foundation while pushing the benefits of products like Tanzu, software-defined edge, and VMware’s private AI offering.

In the opening keynote, VMware CEO Raghu Raghuram acknowledged the 17 months of work that have gone into preparing VMware for integration into Broadcom for the acquisition and welcomed Hock Tan, CEO of Broadcom, to the stage to say a few words on the future.

Tan made three commitments to attendees, informed by conversations the executive has had with customers since Broadcom first announced its acquisition of VMware.

“First, if anything else we will not only continue but accelerate the pace of innovation through stepped up R&D investments,” Tan said.

“Next, we intend to invest much more in the VMware ecosystem with our partners, value added resellers, distributors, OEMs, managed service providers and of course global system integrators, in order to make our products more available and much easier to deploy and consume.

“Finally, we will make ourselves and our products easier to deal with.”

Tan was on stage for two minutes, but one couldn’t help but wonder if his appearance had been scheduled with the hope that the acquisition would have been approved by the time of the conference. 

He made no similar appearance at VMware Explore Barcelona 2022. and his words of reassurance and encouragement served to calm a nervy crowd.

Throughout the rest of the conference, there was minimal reference to Broadcom. Experts and customers were understandably unable to offer much insight into the deal, with strict regulatory processes underway and a $1.5 billion egress fee hanging over them.

Last year, Raghuram told the assembled press that although Broadcom would call the shots for VMware once the deal had gone through, it would also restructure its business to make VMware its official software arm. It is still not clear whether this would shunt Broadcom’s existing software subsidiaries under the VMware umbrella, or if another arrangement would be made.

What is clear is that VMware is set to enjoy an unprecedented level of identity under the Broadcom banner, a decision perhaps informed by the chip maker’s previous acquisitions. Raghuram told a press conference that VMware is not working with Broadcom on AI processor projects.

VMware customer confidence 

How does this translate to customer confidence? It seems the promise of retained identity under a parent company that wants to continue on VMware’s path of innovation and consolidation has gone down well.

“The promise to simplify solution offerings and make it easier for VMware customers to procure and operate with VMware under Broadcom is a positive indication of what’s to come and a key driver aligned to Xtravirt’s strategic purpose to simplify the technology journeys of our clients” says Gavin Jolliffe, CEO at Xtravirt.

Xtravirt is a leading UK partner of VMware and helped the University of Bristol deliver its new network environment to empower academics and support its work on the Isambard-AI supercomputer.

“Broadcom’s promise to invest in the partner ecosystem, and simplify offerings aims to make it easier for customers to engage with, procure, and operate VMware solutions going forwards. We are pleased to see the acquisition close and remain committed to providing insights and feedback that will shape the new partnership model and drive customer success across the whole VMware portfolio” Jolliffe adds.

“Over the last few months we have seen VMware double down on innovation and consolidate features and capabilities across its core platforms. Post-acquisition, we anticipate VMware customers will benefit further as Broadcom make their promises a reality.”

Customer continuity

Above all else, the statements of Tan and Raghuram speak to extended efforts by both firms to retain VMware’s company identity. 

In a tweet announcing the news, Broadcom said the acquisition marks “another important step forward in our efforts to build the world’s leading infrastructure technology company”. This signals what we already knew about the deal - namely that Broadcom recognizes the value of VMware’s infrastructure and virtualization offerings in their current, united, form.

The name ‘VMware by Broadcom’ also speaks to this. Under Raghuram’s eye, the firm has become a powerful end-to-end cloud offering in its own right, aiming to fight ‘cloud chaos’ through a more cohesive approach. Broadcom, it seems, aims to pour money in and watch it grow, rather than break it apart for its valuable elements.