Broadcom CEO: Innovation, Investment Coming with VMware Acquisition

Raising product prices is not part of Broadcom's plan.

Edward Gately, Senior News Editor

October 26, 2022

3 Min Read
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Tanzu is a strategic part of VMware‘s software portfolio and will remain so after Broadcom completes its $61 billion acquisition of VMware.

That’s according to Hock Tan, Broadcom’s president and CEO. He recently met with Broadcom customers globally and addressed concerns about the acquisition in a new blog.

Broadcom reportedly will try to fast-track antitrust approval of its VMware acquisition from the European Union. People “familiar with the matter” told Reuters that Broadcom will cite competition from cloud giants AWS, Microsoft and Google in its quest. Basically, those companies are already so big, approving this deal won’t create more of a competitive unbalance.

Priorities with VMware Acquisition Aligned with Customers

In his blog, Tan said his priorities are “very much” aligned with customers.


Broadcom’s Hock Tan

“By investing and innovating in infrastructure software and VMware’s broad portfolio, including multicloud and cloud-native capabilities, we will bring our customers greater flexibility and deliver new solutions to help them connect, scale and protect their IT infrastructure,” he  said. “This will also empower our customers to modernize and architect their IT infrastructure while ensuring there will be large-scale, secure and reliable, yet flexible, solutions to do so.”

In addition, continuing to develop the ecosystem will enable partners to grow their businesses with expanded offerings, Tan said. They’ll do so with the combined portfolio and “even better meet customers’ needs.”

Tan said many customers and partners are asking him how he sees the VMware Tanzu portfolio and Broadcom’s future commitment to the Tanzu business.

“VMware Tanzu customers are running some of the most mission-critical applications in the world,” he said. “As customers think about future investments in cloud-native applications and the modern application development space, they should feel confident in Broadcom’s commitment going forward.”

Increasing Prices Not Part of Strategy

VMware develops technology for the future and addresses a growing market, Tan said. Broadcom’s strategy doesn’t involve taking existing products and raising their prices.

“The Broadcom business case for this transaction is premised on focusing on the business model, increasing R&D, and executing so that customers see the value of the full portfolio of innovative product offerings, not on increasing prices,” he said.

Following the close of the transaction, Broadcom will invest in and innovate VMware’s products, Tan said. It will do so to sell even more of them and grow the VMware business within enterprises. That will deepen and expand the footprint “instead of potentially raising prices.”

Main Priority

Broadcom’s main priority once the transaction is complete will be integrating VMware and its employees, Tan said.

VMware is an innovation success story,” he said. “But the company’s story is far from finished and we’re excited to help write the next chapters. I have tremendous respect for what VMware has built. And experiencing the company’s excitement for the future at VMware Explore in San Francisco earlier this year reinforced my belief that we are on the right path.”

Tan said he’s now “even more excited” about what a combined Broadcom and VMware can deliver to customers.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Edward Gately or connect with him on LinkedIn.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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