Broadcom is expected to acquire VMware by October 30, 2023, in a $61 billion deal. The deal has been approved by regulators around the world, although VMware partners remain concerned about pricing, products, and channel strategy.
Broadcom chief executive officer (CEO) Hock Tan has said he plans to “embrace the channel,” but partners say they have seen little evidence of this so far. They are also worried about a potential repeat of Broadcom’s past behavior following the acquisitions of CA Technologies and Symantec, which saw pricing increases, shrinking roadmaps, and divested products.
Analysts and partners are also growing concerned about the potential for price hikes following the acquisition. Forrester’s Woo said she doesn’t trust Broadcom’s promise on pricing not increasing, and that she’s heard of pricing increases coming from VMware customers already. Future Tech’s Venero echoed Woo’s concerns, advising his VMware customers to lock in current pricing by negotiating new deals now.
VMware CEO Raghu Raghuram has repeatedly assured customers that prices will not increase, but his comments have failed to assuage concerns. Many customers are now actively looking for alternatives.
Another key area of interest is VMware’s Tanzu portfolio, which helps developers build and run cloud-native applications on any cloud. Tanzu is a strategic priority for VMware, and Broadcom has pledged to continue investing in it.
Broadcom has also said that it plans to invest $2 billion in driving better VMware products and better sales, with half focused on R&D and the other half focused on helping to accelerate the deployment of VMware solutions through VMware and partner professional services. This investment is likely to benefit all of VMware’s products, including Tanzu.
Broadcom has also reassured partners that it will embrace the channel following its acquisition of VMware, despite a history of taking customers direct. Broadcom CEO Hock Tan promised to “maintain and nurture” existing customer relationships. Although, VMware partners remain cautious about the acquisition despite these assurances.
The sources for this piece include an article in CRN.