Broadcom To Acquire VMware in Massive $61 Billion Deal

Broadcom has announced it is acquiring VMware in a massive $61 billion deal. From a report: The deal is a combination of cash and stock, with Broadcom assuming $8 billion in VMware debt. With VMware, Broadcom gets more than the core virtualization, which the company was built on. It also gets other pieces it acquired along the way to diversify, like Heptio for containerization, and Pivotal, which helps provide support services for companies transitioning to modern technology. At the same time it bought Pivotal, it also acquired security company Carbon Black. That touches upon a lot of technology, but it begs the question, where does it all fit with Broadcom (which has spent a fair amount of money in recent years buying up a couple of key software pieces prior to today's announcement)?

RIP

[kunwon1]

Broadcom is where technology companies go to die. It's a hospice. Look at Symantec

VMWare is going to stop receiving new features, and start receiving new monetization opportunities. Shit is about to get expensive.

Re:

[deKernel]

VMWare is going to stop receiving new features, and start receiving new monetization opportunities. Shit is about to get expensive.

Man do I hope this is not true because I have used Workstation for years, and it has worked with zero issues.

Re: RIP

[saloomy]

VMware was owned partially by Dell, but they left it a stand-alone unit. Broadcom will probably do the same, as VMware must be agnostic to have industry dominance.

Re:

[deKernel]

As much as I am concerned about functionality, I am just as concerned about pricing because Broadcom is famous for charging high prices for darn near everything these days. My fingers are crossed that you are right though.

Re: RIP

[Junta]

Eh, Broadcom (Really Avago historically, Avago plundered the name from Broadcom when acquired) gameplan is consistently cut spending and gouge customers until the solution stagnates out of relevance through the combination of being overpriced and no R&D.

It's not a matter of trying to bend a business unit to favor existing offerings, it's generally just cutting investment to 'not giving an ass' levels for short term gain and then wondering 'what happened?' when the brand loses relevance.

They probably think VMware is bullet proof and so they can coast in a more robust way than other acquisitions have gone.

Re: RIP

[saloomy]

VMware hopefully do not raise prices. They tried to gouge the product before with vRam entitlements per cpu, and abruptly did an about-face when everyone bitched loudly. For datacenter, there is Oracle VM which is absolutely free, as an alternative. For VDI, Citrix is the alternative. For the desktop, there are many (I run virtual box on my Mac)

Re:

[Junta]

The problem with Oracle VM is the word Oracle. They may have products that are in the clear, but they have a nasty habit of using those as booby traps, and it's going to be a long road to get me to trust that they won't pull the rug out from under me.

We shall see what happens, but so far the track record for companies acquired by Avago has not been pretty...

Re:

[kunwon1]

Broadcom to 'focus on rapid transition to subscriptions' for VMware [theregister.com]

The ink hadn't even dried yet lol

Re: RIP

[alexgieg]

I'll guess then that Avago / Broadcom is a private equity, right? That's PEs typical modus operandi. They probably reasoned that nickel-and-dimming VMware until it dies will yield n% above the $61b investment made over a period of m years, followed by p% more via suing other companies for patent violations for the n years it takes those patente to expire, and that's it.

Re:

[Junta]

That is correct. It's a company that was formed by a couple of private equity firms chunking about part of Agilent in 2005. So it's basically what happens to a tech company when private equity firms transform it into an acquisition machine.

Re: RIP

[gravewax]

You obviously haven't dealt with broadcom much. They bought and killed the kill of software graveyards CA and have continued there practises in fine tradition

Re:RIP

[bustinbrains]

VMWare Workstation has solid competition from VirtualBox, QEMU, and Hyper-V. And the new hotness in virtualization on the desktop is figuring out how to get ARM emulation to run well on Intel hardware and vice versa. No one has created a physical hybrid ARM/Intel chipset yet but it'll probably happen somewhere along the line. With all of today's options across the industry, I've never once thought of virtualization as having vendor lock in. vCenter/vSphere was already ruined by dropping the client and going web only and I fled Windows Server for a Linux server stack ages ago. Linux, of course, has its own universe of virtualization software.

So if Broadcom/VMWare shoots the price through the ceiling, most people will just leave and migrate their VMs to other technology. They probably needed to be rebuilt anyway. VMs are generally designed to be throwaway things in the first place - set one up, use it for a while, delete or rebuild it.

Re:

[EvilSS]

I've never once thought of virtualization as having vendor lock in.

Not much lock-in on desktop virtualization, no. But for datacenter? You do see it there. One huge reason is 3rd party support. If someone has a virtual appliance as part of their product, or their product interacts with the hypervisor in some way (think backups, monitoring, etc), you are pretty much guaranteed it will work with VMWare. Some will also support Hyper-V and occasionally others like Xen (mostly just Citrix these days) or KVM. But many will only work with VMWare. You may be able to get somethin

Re:

[mjwx]

I've never once thought of virtualization as having vendor lock in.

Not much lock-in on desktop virtualization, no. But for datacenter? You do see it there. One huge reason is 3rd party support. If someone has a virtual appliance as part of their product, or their product interacts with the hypervisor in some way (think backups, monitoring, etc), you are pretty much guaranteed it will work with VMWare. Some will also support Hyper-V and occasionally others like Xen (mostly just Citrix these days) or KVM. But many will only work with VMWare. You may be able to get something to work (converting a virtual appliance for example) but if something happens down the road, their support is likely to tell you to pound sand for running on an unsupported hypervisor.

And that's what makes VMWare so dominant in the datacentre. The fact that they will let almost anything work with it. Don't want to pay for or use VMWare's products for replication or backups... Just install the brand of your choice. I think the "problem" with some products only working with VMWare is not vendor lock in with VMWare but the fact that VMWare is so dominant. They became that way by being the best product, Hyper-V and Nutanix are still like the VMWare you ordered from Wish.com and it's not like

Re:

[mhoward736]

VMWare workstation is a nice product but a side show compared to the server side technology of VM's and VDI's and VMWare has a solid lead in this space. In those spaces VMs are not throw away even if backed by DevOps for deployments and are running vital production workloads. There is also a huge eco system of 3rd parties providing integration that make moving a multi year process.

I expect they will have to change more to cover the costs of the acquisition and this might slowly eat away at market share but

Re:

[ls671]

I stopped using VMWare 15 years ago. Workstation was nice back then but nowadays I use qemu for laptops/workstations and proxmox/qemu on servers.

Re:

[Darkk]

I stopped using VMWare 15 years ago. Workstation was nice back then but nowadays I use qemu for laptops/workstations and proxmox/qemu on servers.

Same here.

Re:

[neilo_1701D]

Broadcom is where technology companies go to die. It's a hospice. Look at Symantec

VMWare is going to stop receiving new features, and start receiving new monetization opportunities. Shit is about to get expensive.

So no more ARM flings :(

Re:

[ls671]

Well, I did a quick search for Broadcom and at least it seems to be an American company with a Malaysian CEO.

Anybody knows of ties outside the USA?

Re:

[erice]

Present-day Broadcom is a product of so many acquisitions that it is hard to make sense of who they are anymore. What is certain, is that they are not Broadcom. Avago, based in Singapore at the time, purchased Broadcom in 2015 and then attached the Broadcom name to the whole company. There have been more acquisitions since that time. I don't know what they want with VMWare. Both Broadcom and Avago were chipmakers when they merged. Friends who work at Broadcom tell me they are more of a software compan

Re:RIP

[EvilSS]

Yep. The clock was already ticking on VMWare. Almost every company has a virtualization product in their datacenter these days, most are already VMWare. Those that are not are either cheap and trying to go with Hyper-V or KVM, or pissed at VMWare for something and won't be going back. So their "new-logo" growth has been stale for a while now. They have been riding on support renewals, upgrades, and growth in existing companies. However companies moving workloads to public cloud providers is starting to eat away at their existing install base. They have tried to adapt with VMWare on Azure/GCP/AWS with the argument that it integrates well with their on-prem and the customer won't need new skillsets to run it. But it's expensive as hell and adoption hasn't been amazing from what I'm seeing. Microsoft is also going to be pushing Azure HCI (which can run on any customer hardware that meets requirements vs Azure Stack Hub which requires specific hardware purchased with the hypervisor) more and more going forward. I think their long term plan is to replace Hyper-V completely with it. That is going to allow them to claim that same benefit of a shared skillset across on-prem and cloud, shared APIs, etc. But without the VMWare tax I'd say from the way MS is talking it's probably 4-5 years before it starts to really make a dent but it's the way they are going. I suspect Amazon will need probably release a similar product in that timeframe to compete as well.

Which is to say, I don't think VMWare is going to do anything but shrink over the next 20 years. And that was before this deal. Broadcom does not have a great reputation and I bet a lot of CIOs burned by Symantec's antics under Broadcom are thinking about their VMWare exit strategy.

Re: RIP

[guruevi]

VMWare is going to stop receiving new features, and start receiving new monetization opportunities. Shit is about to get expensive.

Have you looked at VMWare any time in the past few decades? $12k/year/CPU for a basic cluster buys a lot of new hardware. VMWare has been dying, overtaken by KVM and Docker/Kubernetes.

Re:

[mjwx]

Broadcom is where technology companies go to die. It's a hospice. Look at Symantec

VMWare is going to stop receiving new features, and start receiving new monetization opportunities. Shit is about to get expensive.

Broadcom bought Symantec in 2019, they had well and truly gone down the toilet, flushed through the sewerage system, fertilised some beans, made into a burrito, eaten and shat out again by that point.

VMWare is still a market leader in on premise virtualization technology. Their "Cloud" offerings haven't amounted to much but they're managing to remain the market leader despite the inroads of AWS, Azure, et al. With any luck it'll be the reverse of the MD/Boeing merger where the better, more engineering fo

Re:RIP, and CA too

[bmomjian]

For more verification, Broadcom purchased the software hospice company Computer Associates (CA) in 2018.

I, For One, Welcome Our New Insect Overlords

[WoodburyMan]

Don't blame me, I voted for Kodos.

I was going to ask...

[Anonymous Coward]

... who'd pay $60B for VMWare, given that they stopped innovating ages ago, there are free open source alternatives for everything important they do, and they can't possibly be making very much money.

Then I looked it up and they have $10B in annual revenue. So now my question is WHO ARE THE IDIOTS WHO PAY $10B PER YEAR FOR VMWARE'S PRODUCTS????

Re:

[ArchieBunker]

Some people like having paid support for the product? And virtual machines are a lot older than you think. IBM was doing it in 1972. https://en.wikipedia.org/wiki/... [wikipedia.org]

re: Who pays for VMWare?

[King_TJ]

Pretty much every company I've worked for in the last 15 years or so uses VMWare ESXi in one form or another.

You've got to remember, a long time ago, your only serious options for corporate VM use came down to ESXi or Microsoft's Hyper-V. Hyper-V was free with the cost of the Windows server that had it built in. But a lot of I.T. people were afraid of that, since they didn't want all their eggs in the one Microsoft basket. There was no telling if the next Windows Server release might suddenly charge big bucks to keep using Hyper-V VMs or would add restrictive rules to their use.

Hyper-V also had issues like lack of support for older versions of Windows as time went on. I remember one place I worked that had an old, outdated financial system running on a Windows Server 2003 box. They needed to keep it online for another year or two, so people could sign into it and pull/look up various reports or data as part of a transition to a new accounting system. But the physical server it was on was dying. So the solution was virtualizing it. Unfortunately, Hyper-V wouldn't support Windows Server 2003, but ESXi did.

When you've got your entire company's server farm running on ESXi servers and it's working smoothly -- there's not a whole lot of incentive to switch away from it. You'd have to be able to promise the heads of the company that the change wouldn't cost performance issues or downtime or data loss. And the physical servers in place are likely units that were "certified" for VMWare and not necessarily for other options. That means they developed proprietary device drivers in ESXi server for things like the RAID controller or network adapters in the machines.

Re:

[Junta]

There are companies that will not change no matter what. VMware had early mover advantage and once adopted, many of the companies that spend the most never ever want to change their mind about suppliers if they don't have to.

The decision makers are all playing with house money, so they don't care that much about the spend, but they do live in fear that if they make the call to reduce expense by switching vendors and something goes wrong, they get the blame. So not much upside (these companies do not priori

Re:

[mjwx]

... who'd pay $60B for VMWare, given that they stopped innovating ages ago, there are free open source alternatives for everything important they do, and they can't possibly be making very much money.

Then I looked it up and they have $10B in annual revenue. So now my question is WHO ARE THE IDIOTS WHO PAY $10B PER YEAR FOR VMWARE'S PRODUCTS????

People who want their datacentres to work.

VSphere remains the top virtualization platform because it is the best at what it does. You can easily migrate to Nutanix or Hyper-V to save money but you almost instantly regret it, you can migrate to AWS/Azure and end up paying more if you actually use your environment.

There might be FOSS alternatives for the individual things they do... but good luck getting them to work together seamlessly and eliminate single points of failure like VSphere. That's what yo

$61 BILLION?? Jesus christ man

[backslashdot]

Just download Virtualbox for free.

Re:

[short]

There is already KVM as a part of your system. No need to download any crap.

Re:

[war4peace]

I used both.
VirtualBOX gave me so many headaches, I dropped it as soon as I could. Imagine building a VM under it, it runs perfectly, you shut it down, start it tomorrow and it won't start, with VirtualBOX throwing strange errors which meant nothing to me, as an ordinary user.
Since I started using VMWare Workstation Player, zero issues for years.
YMMV, of course, this was just my anecdotal experience.

Re:

[deKernel]

My mileage with Workstation has been flawless. Heck, I have several VM's that are almost 10 years old that represent several different development systems, and they have always ran even after upgrading Workstation several different times. For me as a consultant, time does equal money, and having a VM that doesn't fire up costs me $$$ immediately.

Re:

[jhuebel]

VMware Workstation is not the product that makes VMware all the money. So, saying "just download VirtualBox", a Type 2 Hypervisor, seems to indicate that you really have no experience in this area of IT. vSphere is where VMware makes the big bucks. And they make the big bucks because ESXi is a top-tier Type 1 Hypervisor that's stable, feature-rich and comes with great support options. Are there other Type 1 Hypervisors out there that could work? Sure. Nutanix, Hyper-V (particularly Azure Stack), KVM. Those

Prices are going to go up

[rsilvergun]

and there'll be layoffs. Everytime there's a mega merger they need to get their money back ASAP. That means raise prices, fire employees.

This is why inflation's so high. Too many mergers, zero anti-trust enforcement.

Re:

[gtall]

That's not why inflation is high. There are multiple reasons: supply chain bottlenecks cause scarcity so the price goes up, China shutting down parts of their economy causing scarcity, the war in Ukraine causing the price of oil and wheat to skyrocket, the sainted American consumers spending out the whazoo now that they feel they can. Gobs of government red ink is certainly making things worse. One fix to too many dollars chasing too few goods (inflation) is for the government to raise taxes. That appears t

Does this mean VMWares support is...

[blunttrauma]

..going to go to shit? Asking for a friend. Or something.

Finally! Virtual Raspberry PIs.

[wonkavader]

And it's about time.

well that sucks

[sdinfoserv]

I use and really like some of these technologies (VMware & CarbonBlack). They are industry leaders with incredible products and support. Unfortunately, when money-grubbing whore, bottom line only companies like VC's buy successful companies, they'll kill the product. Why? Because the "investment" needs ROI. Fire support staff, slash the high paid developers who actually know the code, lengthen release cycles and patching, purge sales / support channels of "excess".... the tech industry is full of a$$hole companies like that... Tyler Technologies, Central Square, Granicus to name a few. All buy successful products and after a few years leave customers hanging while jacking up annual support costs.