News that Broadcom intends to purchase VMware has raised alarms among stakeholders, remembering Broadcom’s history with past acquisitions, like network firm Brocade in 2016 for nearly $6 billion, software company CA Technologies in 2018 for $19 billion, and Symantec’s enterprise security division in 2019 for $10 billion. The $60 billion transaction involving Broadcom and VMware has resulted in job cuts, alterations in VMware licensing, operational adjustments, changes to the partner program, and a legal challenge from AT&T against Broadcom. Competing firms report gains in attracting VMware’s customers, although extensive migrations have not been broadly noted by analysts.

We have been documenting the developments since Broadcom initially announced its intention to buy VMware in May 2022. Below is a summary of events up to this point, including the most recent updates and perspectives.

Sept. 23, 2024: Broadcom has responded to the ongoing lawsuit with AT&T concerning VMware service supports, accusing AT&T of using “sensationalism” and alleging that AT&T had planned to discontinue using VMware but postponed this action. A recent legal filing by Broadcom claims AT&T’s lawsuit is an effort to gain more time to switch to alternative software while still benefiting from reduced support services, which Broadcom has now ceased for perpetual license holders.

Sept. 5, 2024: AT&T is taking legal action against Broadcom for its aggressive management of VMware support contracts, claiming, “Broadcom is trying to retroactively change existing agreements, coercing us to purchase hundreds of millions of dollars in bundled services,” as stated by AT&T in their lawsuit filed in New York’s Supreme Court. “Without these support services, AT&T can’t prevent frequent software errors, security gaps, or system failures.”

Aug. 30, 2024: “The future of the enterprise, your enterprises, is private,” stated Broadcom president and CEO Hock Tan during a keynote speech at this year’s VMware Explore conference. He emphasized the importance of “Private cloud. Private AI. Fueled by your own private data. It’s about staying on-prem and in control.”

Aug. 19, 2024: The latest VMware Explore event, occurring post Broadcom’s acquisition of VMware last November, marks a significant milestone. As analysts and enterprise customers ponder over VMware’s future strategies, licensing modifications, and product roadmap under Broadcom, the demand for continued innovation within VMware’s offerings remains high among stakeholders. Key emphasis is also expected on improved integration, user interface enhancements, and facilitating easier adoption processes.

Aug. 14, 2024: With the changing operational tactics at VMware due to Broadcom’s influence, alternative solutions are being considered by some enterprise customers, such as those provided by Scale Computing, Nutanix, and Oxide Computer. Scale Computing reports a significant rise in sales and doubling of its customer base over the last year, attributed partly to these operational shifts at VMware.

July 01, 2024: In response to VMware’s acquisition by Broadcom and subsequent business actions, Nutanix has started actively pursuing disenchanted VMware customers. Additionally, Nutanix has recently established important alliances with occasionally competing firms like Dell, Cisco, and HPE.

July 25, 2024: Broadcom has announced that VMware vSphere 7.x users will get six additional months of support for the product. VMware vSphere 7, which was launched in 2020, was scheduled to go out of support in April 2025 but will now be maintained until October 2025.

June 26, 2024: A slew of updates in VMware ECS 3.5 are aimed at helping customers more easily manage edge devices, applications, and infrastructure across multiple locations. Updates include zero-touch orchestration capabilities, pull-based architecture, and edge fleet management.

April 23, 2024: Cloud Infrastructure Services Providers in Europe (CISPE) strongly criticized Broadcom’s response to concerns regarding its licensing changes. The trade organization said the economic viability of many cloud services utilized by customers in Europe is threatened by “the massive and unjustifiable hikes in prices, the re-bundling of products, the altered basis of billing.”

April 16, 2024: Licensing changes include a standardization of the metric for pricing offerings across cloud providers to per-core licensing – the same metric used in end-customer licensing. Meanwhile, Broadcom President and CEO Hock Tan pledged support to customers and clarified how the company would offer VMware products and support going forward.

Feb. 27, 2024: Broadcom has reinvigorated the VMware VeloCloud SD-WAN brand and integrated it with the Symantec Enterprise Cloud security service from Broadcom to launch a unified SASE solution.

Feb. 26, 2024: Broadcom has finalized a deal to divest its end-user computing division to KKR for $4 billion, with KKR planning to establish it as an independent entity under the leadership of the present management team, headed by Shankar Iyer.

Jan. 22, 2024: Despite raising concerns among VMware clientele, Broadcom’s strategic moves were somewhat anticipated, given the company’s historical approach with earlier acquisitions like CA Technologies and Symantec. While there’s no immediate exodus, users are exploring other options as Broadcom takes the helm.

Jan. 05, 2024: IDC’s Group Vice President of Infrastructure Software, Steven Elliot, commented that the job cuts and program consolidations at Broadcom are both vital and beneficial. He emphasized that Broadcom is streamlining its workforce and product lines to concentrate on its main strengths.

Dec. 01, 2023: Broadcom disclosed its intention to dismiss 1,267 VMware workers starting January 2024, as shared in a regulatory document submitted to the California Employment Development Department. The announcement came shortly after closing the deal.

Nov. 30, 2023: Following business consolidations, staff cuts are a typical outcome as firms address roles duplication. Conversely, VMware witnessed the exit of Sumit Dhawan, its former president since 2021, who moved on to lead as CEO at cybersecurity firm Proofpoint. Additionally, speculations circulate about its ability to maintain its client base.

Nov. 21, 2023: Merely five days before the expiry of their merger agreement, the acquisition received the green light from the last regulatory body. China approved Broadcom’s $69 billion takeover of VMware, clearing the path for them to finalize the deal on November 22.

Aug. 25, 2023: During the VMware Explore 2023 event held in Las Vegas, while there were updates related to cloud technologies, the spotlight was stolen by advancements in generative AI, a trend that has been prominent across the tech industry, with numerous companies integrating generative AI into their offerings.

July 19, 2023: The UK’s Competition Market Authority (CMA) provisionally cleared Broadcom’s proposed acquisition of VMWare, paving the way for the $61 billion deal to proceed. The decision came after the CMA examined the merger’s potential impact on the competitiveness of Broadcom’s adversaries in the server virtualization software market.

May 05, 2023: Broadcom declared its intention to invest $2 billion annually to boost research and development for VMware’s offerings. Broadcom CEO Hock Tan highlighted in a blog post that this integration into Broadcom would provide VMware with greater resources and capacity, aiding more clients in adopting its technologies and solutions than it could as an independent entity.

Feb. 20, 2023: Broadcom and VMware, the acquisition target, decided to extend their timeline to finalize the $61 billion deal initially publicized on May 26, 2022, by another 90 days. According to a regulatory disclosure by VMware, both companies issued a joint notification to push the completion date of the merger out by twelve months from when it was declared.

Nov. 21, 2022: The UK’s Competition and Market’s Authority (CMA) initiated an inquiry into Broadcom’s planned purchase of VMware, examining whether the intended merger could substantially lessen competition in any UK market for goods or services.

Sept. 22, 2022: With Broadcom’s history of problematic acquisitions, concerns arise among VMware’s enterprise customers. Tracy Woo, a senior analyst at Forrester, remarked, “Post-acquisitions of CA and Symantec, Broadcom hiked prices, slashed support, and halted innovation investments,” advising VMware clients to consider alternative strategies.

July 04, 2022: According to Network World’s Tom Nolle, the combination of Broadcom’s hardware and VMware’s software might serve as a crucial link between data center applications and the cloud.

May 26, 2022: Observers of the industry posit that Broadcom’s proposed purchase of VMware might create new avenues into enterprise and telecom markets through cutting-edge technology, although concerns persist about Broadcom’s commitment to VMware’s innovation in areas like 5G and software-defined networking (SDN).

May 25, 2022: The acquisition narrative between Broadcom and VMware began when the semiconductor leader and the software behemoth publicly disclosed their intentions to merge, in a transaction valued at approximately $61 billion in stock and cash.

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