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Hock Tan ‘Even More Excited’ About Broadcom-VMware Deal Post-Explore

Tan made a surprise appearance at last week’s event and now says VMware has “tremendous potential.”

Kelly Teal

August 28, 2023

3 Min Read
Excitement level
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Broadcom’s Hock Tan

Broadcom CEO Hock Tan says he’s “even more excited” about closing the $61 billion Broadcom-VMware pairing, now that he attended last week’s VMware Explore.

“I … had the great privilege of speaking with customers and industry leaders about the journey to multicloud,” Tan wrote in an Aug. 28 blog. “These conversations made me even more excited about how a combined Broadcom and VMware will empower customers to modernize and architect their IT infrastructure for a multicloud future.”

Tan has been actively evangelizing the benefits of the Broadcom-VMware transaction since announcing it in May 2022. Much of his input has come as the proposed union hit various regulatory roadblocks that, except for China, have largely been removed.

As such, Tan seems to be making more public appearances and discussing plans for VMware post-closing. (One example: He committed last week to an immediate $2 billion infusion into VMware, half for research and development, half for deployment efforts.) Recall that Broadcom, a chipmaker, wants VMware for its cloud and server expertise.

“It’s clear that having the ability to distribute applications and services across a combination of clouds is a priority for our customers,” Tan wrote on Aug. 28. “It’s also clear that a combined Broadcom and VMware will be able to accelerate our ability to provide customers with the multicloud environment that works best for them.”

From ‘VMware Has Failed’ to ‘Tremendous Potential’

Tan’s take is interesting, especially when considering Broadcom’s view of VMware, noted in a redacted regulatory document filed with U.K. authorities earlier this year. In that, Broadcom went so far as to state that “VMware has failed.”

Tan, for his part, said on Aug. 28 that VMware “has tremendous potential,” a key reason why Broadcom will pump $2 billion into its acquiree. That money will “help us to better unlock customer value,” Tan added. “Our customers and partners will have access to a stable, growing and powerful multicloud platform underpinned by world-class security, enabling them to accelerate innovation for all their applications.”

Tan also praised VMware’s advancements with respect to its cloud, Tanzu and AI portfolios, all highlighted at VMware Explore 2023. In doing so, he seemed to rebut market fears that a combined Broadcom-VMware will result in higher prices, which would hurt customer budgets.

“You don’t need to raise prices to innovate. It’s as simple as that,” he wrote.

Broadcom-VMware: A ‘Simply Enormous’ Opportunity

Meantime, Tan called out the 2023 generative AI craze as a game-changer, one that will spill over into Broadcom-VMware.

“[G]enerative AI will go down the same evolutionary path of trial, error and advance as earlier technologies that were also seen as disruptive,” he said. “As AI technology evolves, it will help companies become smarter at what they do, and in turn, deliver more and better services to their customers.”

VMware already is making this happen via its Private AI Foundation, Tan added.

Tan rounded out his latest blog with a reaffirmation that the Broadcom-VMware deal will close on Oct. 30 and that Broadcom will immediately invest in VMware’s products and services.

“What Broadcom and VMware can do together for customers is simply enormous,” he wrote. “By bringing together two engineering-first, innovation-centric cultures, we will be well-positioned to address and solve our customers’ most challenging and ever-evolving needs.”

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

 

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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