Broadcom CEO: VMware Partners ‘Will Remain Essential’ After Purchase
Hock Tan seems to be trying to convince European regulators to lift the pause on the $61 billion deal.
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Tan started by addressing the impact on customers.
“Once we acquire VMware, we expect to deepen our commitment to customer success by building a more dynamic IT value proposition,” Tan wrote on Thursday. “Together, we will add the software tools customers need to better manage and get the most out of their data across all possible environments, whether they choose private cloud or public cloud approaches.”
At the same time, he wrote, Broadcom will gain “valuable partnerships.”
The comment about “valuable partnerships” led into Tan’s discussion of Broadcom’s plans for VMware partners.
He called the range of relationships — which can include vendors, not just resellers, managed service providers and the like — “an ecosystem that has been and will remain essential to Broadcom’s broader commitment to maintain, nurture and serve VMware’s existing and future customers, regardless of organizational size.”
VMware partners, Tan added, offer both collaboration and connection to “a wider range of customers, including small- and medium-size businesses.”
Once Broadcom-VMware closes, Tan continued, “we will sustain and further develop VMware’s robust partner ecosystem, especially as we work together to expand VMware’s solutions. Partners will be able to grow their businesses as the combined company accelerates execution and smart portfolio growth. Together, we’ll be better positioned to help customers speed app modernization, move to the cloud faster, and support a more secure and hybrid workforce.”
But what do those comments really mean?
Taken as a whole, Tan’s comments seem designed to push back against fears that Broadcom will run roughshod over VMware partners and smaller customers.
Consider that Broadcom holds a market cap of approximately $251 billion, a number that reflects its vast global reach. The amount makes Broadcom about five times bigger than VMware, whose market cap comes in at about $51 billion. The disparity in size and influence has some regulators concerned about what Broadcom will do with VMware once the deal is sealed. Tan, it seems, is trying to assuage those worries, as he has attempted to do in previous blogs. (In December, for example, he promised no price increases or SMB neglect.)
Tan went on to say that Broadcom will expand “an extremely innovative, world-wide user community.”
That referred to the VMware User Group, which Tan discussed in a letter last year to those professionals. Broadcom’s pursuit of VMware, Tan said on Thursday is “all about the product — and we’re going to focus on making VMware’s products even better for customers, including making them easier for customers and partners to access and use.”
As such, Tan pledged to “support and invest greater resources in VMware’s training programs … and use our longstanding experience in utilizing partner and user ecosystems to support customers’ technology and multicloud priorities.”
However, for Broadcom to achieve its VMware partner, customer and user group goals, Broadcom “must remain at the forefront of product innovation and help customers keep up with technology advancements,” Tan wrote.
That’s where VMware comes in, he noted, as a “complement” to Broadcom’s 60-year history.
And here’s where things get really interesting.
Here’s where Tan’s blog gets really interesting. Tan uses all the background we’ve reported here to then move into discussion of how Broadcom-VMware will helps customers “innovate and better manage” their IT environments via multicloud efforts.
Recall that Broadcom is moving into cloud via VMware. The latter has continued its transition away from legacy, on-premises software to acting as a multicloud provider, largely through partners.
Why does all this matter so much? Here is where Tan seems to be talking to European regulators directly to try to convince them to push his deal forward.
“Customers cannot compete or operate effectively if their IT environments lag the industry, and that’s particularly true for those managing highly sensitive data and need to protect and control their data across environments — whether on-premises or in private or public clouds,” he wrote. “Take Europe, for example, where governments and critical industries are looking to sovereign clouds.”
A multicloud approach that includes sovereign clouds is the key, Tan said.
Via sovereign clouds, organizations can ensure data safety and compliance with regional and national requirements, Tan wrote on Feb. 9.
To that point, VMware delivers sovereign cloud capabilities, which Tan also wrote about in November. That’s when he said, “Broadcom sees cloud sovereignty as extremely important to the future of data management, and we see VMware, with its multicloud strategy and offerings, as being a key enabler in the adoption of sovereign clouds,” said Tan.
On Feb. 9, he followed up that comment with this, as European regulators keep Broadcom-VMware on hold:
“It is critical for enterprises, especially governments, to maintain flexibility to move data between deployment environments, while running workloads across these multiple environments,” Tan wrote. “Governments moving to multicloud will need the tools to effectively manage their data and run applications in different cloud environments to meet different regulatory and other requirements.”
Will Tan’s arguments convince the European Commission that Broadcom’s plans for VMware — and VMware partners and customers — are harmless? He appears to hope so.
Broadcom, Tan concluded, sees “an incredibly exciting future for VMware’s customers. … And we will leverage our collective experience with VMware’s partners and users to unlock new value and growth. This combination will serve our customers more impactfully and comprehensively than ever before and propel their businesses forward over the long term.”
Will Tan’s arguments convince the European Commission that Broadcom’s plans for VMware — and VMware partners and customers — are harmless? He appears to hope so.
Broadcom, Tan concluded, sees “an incredibly exciting future for VMware’s customers. … And we will leverage our collective experience with VMware’s partners and users to unlock new value and growth. This combination will serve our customers more impactfully and comprehensively than ever before and propel their businesses forward over the long term.”
As Broadcom’s acquisition of VMware remains in approvals limbo in Europe, Hock Tan is talking up the benefits of the $61 billion deal, especially as they relate to VMware partners and customers.
Broadcom’s Hock Tan
On Thursday, the CEO of Broadcom once again took to the company’s blog, which he seems to do whenever regulatory processes hit a snag.
Late last week, news broke that the European Union’s antitrust investigation has stopped the clock on the Broadcom-VMware transaction. Reuters reported that the European Commission has hit pause while waiting for Broadcom to supply requested data. The clock stopped on Jan. 31, effective Jan. 24, according to Reuters.
While it’s unclear what information the European Commission wants, it’s possible it could pertain to VMware partners and customers, since those constitute the main topics of Tan’s new blog.
See the short slideshow above to get the lowdown on Broadcom’s plans for VMware partners and customers, according to Tan.
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