Hot Cloud News: VMware Execs in Line for Big Money Once Broadcom Takes Over
Plus, a key industry analyst talks about this week’s CEO turnover at Rackspace. And we have details on Akamai’s plans for Linode, and more.
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The top five executives at VMware stand to collect a shared total of $169.4 million if they leave the company upon the Broadcom acquisition.
That’s according to updated filings Broadcom has submitted to the Securities and Exchange Commission.
After adding up cash and equity, here’s what each executive could receive:
• Raghu Raghuram, CEO: $53.2 million
• Zane Rowe, executive vice president and CFO: $48.4 million
• Sumit Dhawan, president: $24 million
• Jean-Pierre Brulard, executive vice president of worldwide sales: $24.2 million
• Amy Fliegelman Olli, executive vice president and general counsel: $21.2 million
But wait — there is so much more. Go to the next slide.
Broadcom also is offering big payouts on the executives’ severance terms and health insurance premiums. The totals range from $6.1 million for Raghuram to $1.9 million for Fliegelman Olli.
Finally, the five execs are in line for even millions more (read: set for life) in VMware stock payments.
All of those amounts are subject to change, however. Broadcom calculated the numbers based on share prices of $130.09 (the going price in the five days after the $61 billion deal went public), assuming the executives leave without cause and other business considerations.
If you want to dig into all the legalese, check out the Broadcom filing.
Broadcom expects to close the acquisition of VMware in its fiscal year 2023, which begins in November.
Rackspace Technology has seen five CEOs come and go since 2016, the year Apollo Global Management purchased the global managed service provider.
That’s a significant amount of top-executive turnover.
The most recent exit, of course, came earlier this week. Rackspace said on Monday that Kevin Jones was out, replaced by CFO Amar Maletira. We wanted a little more perspective on the upheaval, so we turned to Constellation Research’s Holger Mueller, who’s been following the Rackspace saga.
Rackspace, recall, is trying to find its footing in the public and private cloud space. Its earnings have reflected its troubles and, in May, the company said it would sell some of its private cloud assets. In August, it backtracked on those plans and said it would operate two business units.
Clearly, Mueller told Channel Futures this week, “the board was not happy with how things are going” and thus implemented a “routine CEO change of a struggling company.”
It’s not as though Jones didn’t have time to turn Rackspace around. In fact, he had 3.5 years “to get Rackspace going,” Mueller said, adding, “[that’s] not an easy feat.”
Find out on the next slide what Mueller thinks new CEO Maletira needs to do.
New Rackspace CEO Amar Maletira has a lot of work ahead of him. He needs to accomplish what Jones could not. Constellation Research’s Mueller says that looks like this: “Find a way to create faster. Have Rackspace get the role of the trusted provider of multicloud services back.”
Maletira looks suited to the task because, as CFO, he showed “good control” on costs and forecasts, Mueller said.
“We will see how he fares.”
Fortunately, the executive turnover at Rackspace should have little to no impact on the indirect channel.
“Nothing has changed. Rackspace is Rackspace,” Mueller said. “We need to check when Amar has made his impact on the channel — likely in a few months.”
Akamai’s strategy for Linode is becoming more clear.
Six months after Akamai — a content delivery network provider — snapped up indie cloud company Linode, growth is in the cards.
That’s important for the channel to know because when Akamai bought Linode, it faced skepticism. Akamai has made its name as a content delivery network provider that now also does security and edge computing. It goes after big organizations. For 19 years, Linode positioned itself as an alternative to the hyperscalers — Amazon Web Services, Microsoft Azure, Google Cloud Platform — for developers and smaller managed service providers. Those go-to-market strategies are very different.
In a blog this week, Akamai’s Shawn Michels, vice president of product management, compute and apps, acknowledged that disconnect.
“[S]ome customers, analysts and industry experts questioned what the acquisition would mean for the future of Linode,” he wrote. “We shared that our intent was to do more — more locations, more functionality, more scale and capacity, and more of the same with regards to Linode’s renowned ease of use, developer experience, customer support and transparent pricing.”
To that end, Michels said, Akamai is expanding Linode’s footprint.
Check out the next slide for the exact locations.
“[W]e plan to add more than a dozen new Linode data centers — equipped with Linode’s full product suite — across North America, APAC, LATAM and Europe by the end of 2023,” Akamai’s Michels said.
Ashburn, Virginia, will serve as the first new location later this year. More Linode data centers will go online in 2023 in Amsterdam, Chennai, Chicago, Delhi, Jakarta, Los Angeles, Osaka, Miami, Paris, Rome, São Paulo, Seattle and Stockholm.
“The exact number of sites, locations and dates for deployment are all being actively worked on,” Michels said. “We plan on providing regular updates as plans for each location solidify.”
Akamai chose the aforementioned sites based on extensive analysis and expected growth.
In addition, Michels said, “2023 will also see us introduce a new concept designed to get basic compute capabilities into difficult-to-reach locations currently underserved by traditional cloud providers. We call these “Distributed Sites” and have identified more than 50 cities where we’d like to place them. Stay tuned for more details.”
Google Cloud said on Thursday it’s going to Greece.
The world’s third-largest public cloud provider will follow in the footsteps of its two larger rivals (you know who they are) and set up a cloud region in the Mediterranean.
Various media are reporting that Google Cloud says the move will create 20,000 new jobs in Greece, which has struggled for years to buoy its economy. However, Google Cloud itself has not said when or exactly where it will launch the new cloud region.
The cloud market in Europe has grown five times bigger than it was in early 2017, according to new data from Synergy Research Group.
By the second quarter of 2022, the market size reached $10.9 billion.
Yet, even though European cloud service provider has risen by 167%, Synergy said, market share has actually fallen. It’s dropped from 27% to 13% as Amazon Web Services, Microsoft Azure and Google Cloud retain dominant status. Combined, the three hyperscalers now account for 72% of European market share.
In terms of leading European cloud vendors, SAP and Deutsche Telekom hold top rankings, Synergy said this week. The runners up include OVHcloud, Telecom Italia, Orange and other national and regional players. The balance of the European market is accounted for by smaller U.S. and Asian cloud providers, who are steadily losing share, Synergy said.
“As U.S. cloud providers continue to invest over EUR 4 billion every quarter in European capex programs, that presents an impossible hill to climb for any companies who wish to seriously challenge their market leadership,” said John Dinsdale, a chief analyst at Synergy.
As a result, most European cloud providers serve local customers with specific needs, and they sometimes team up with the U.S. hyperscalers, Dinsdale noted.
“Some of those European cloud providers will continue to grow but they are unlikely to move the needle much in terms of overall European market share,” he said.
The cloud market in Europe has grown five times bigger than it was in early 2017, according to new data from Synergy Research Group.
By the second quarter of 2022, the market size reached $10.9 billion.
Yet, even though European cloud service provider has risen by 167%, Synergy said, market share has actually fallen. It’s dropped from 27% to 13% as Amazon Web Services, Microsoft Azure and Google Cloud retain dominant status. Combined, the three hyperscalers now account for 72% of European market share.
In terms of leading European cloud vendors, SAP and Deutsche Telekom hold top rankings, Synergy said this week. The runners up include OVHcloud, Telecom Italia, Orange and other national and regional players. The balance of the European market is accounted for by smaller U.S. and Asian cloud providers, who are steadily losing share, Synergy said.
“As U.S. cloud providers continue to invest over EUR 4 billion every quarter in European capex programs, that presents an impossible hill to climb for any companies who wish to seriously challenge their market leadership,” said John Dinsdale, a chief analyst at Synergy.
As a result, most European cloud providers serve local customers with specific needs, and they sometimes team up with the U.S. hyperscalers, Dinsdale noted.
“Some of those European cloud providers will continue to grow but they are unlikely to move the needle much in terms of overall European market share,” he said.
Dare we say, we have a juicy cloud news roundup in store for you today. Over at VMware, the top five execs stand to make a lot — a lot — of money if they leave once the $61 billion Broadcom acquisition closes. We break down the amounts and the buckets those millions will come from.
Earlier this week, Kevin Jones, CEO of Rackspace Technology for almost four years, lost his job. We caught up with industry analyst Holger Mueller for deeper insight into the turnover (this marks Rackspace’s fifth top leader since 2016). We also get Mueller’s perspective on what new CEO Amar Maletira needs to do to help the struggling managed service provider.
In other hot cloud news, we’ve got a look at Akamai’s strategy for indie cloud provider Linode. Those details have been six months in the making, and channel partners will want to understand what’s in store. That’s because many a partner was feeling skeptical about a content delivery network vendor that targets large organizations taking on a cloud provider that serves small firms and developers.
Finally in this week’s cloud news roundup, we take a peek at Google Cloud’s expansion plans (forgive us our 12-year-old movie reference — it was irresistible). And, on a similar note, Synergy Research Group has new data on European cloud providers.
Check out the week’s biggest cloud news in the slideshow above.
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