Hock Tan: Broadcom-VMware ‘A Win-Win-Win’ for Channel Partners, Buyers

A Broadcom-VMware marriage will only bolster the indirect channel.

That’s the latest assertion from Broadcom CEO Hock Tan, who continues to lobby for the closure of his company’s pending, $61 billion acquisition of VMware.

The most recent effort to convince regulators and investors of the solidity of a Broadcom-VMware deal came on Thursday, when Tan posted a blog touting Broadcom’s commitment “to a robust partner ecosystem.”

The message addresses Broadcom’s partner philosophy, and the subsequent trickle-down impact on customers. Indeed, that appears to be the crux of the reason for Tan’s blog. He wants to keep working to convince regulators that a Broadcom-VMware pairing will only bode well for everyone.

Broadcom’s Hock Tan

“Together, we have a shared goal and responsibility of addressing our customers’ needs and delivering superior outcomes. It’s a win-win-win,” Tan wrote. “Our message to our customers, current partners and future partners is this: Our goal is to deliver superior outcomes for customers of all sizes; and our partners’ success is our success. We understand the value our partner ecosystem brings to Broadcom and mutual customers, and we are committed to our partner and customers’ continued success.”

Tan: How Broadcom Works with Partners

Tan backed up his assertions by stating how Broadcom works with the indirect channel.

“When we set out to make any business decision, we always ask ourselves the following three questions: Does it drive a better outcome for the customer? Does it allow and enable profitability for a partner? Does it drive better efficiencies for Broadcom? If the answer to any of these is ‘no,’ it’s not a path worth pursuing. Our partners and customers should always benefit from the decisions we make,” he said.

Overall, Broadcom works with more than 35,000 partners in IT infrastructure and cybersecurity software, Tan wrote. Each of these experts helps “expand the reach of our technology and drive better business efficiency and experiences for customers.”

Tan went further, too, by describing Broadcom’s partner engagement in what looks like an effort to convince detractors that the company doesn’t exert excess dominance.

“We are unique in how we engage with and support our partner ecosystem,” he said. “Often, commercial vendors will attempt to control how their partners conduct business. But at Broadcom, we empower partners to identify and pursue their own commercial strategies, so they can bring sales and services to end-user customers on their own terms.”

Meanwhile, VMware, for its part, just debuted the final version of its months-in-the-making Partner Connect 2.0 program. The initiative features new and simplified tiers and benefits for managed service providers, resellers, integrators and other partners. VMware has continued to tweak its partner program even as Broadcom works to close the acquisition. Last month, Tan asserted in a separate blog that VMware partners “will remain essential” to Broadcom once the transaction closes.

Blogging Amid Scrutiny

Tan’s March 22 blog comes as European regulators express concerns over a Broadcom-VMware transaction, which ranked as the second-largest tech deal in 2022. This week, UK authorities said they fear Broadcom’s purchase of VMware would make servers more expensive. They further planned to put the proposed acquisition under greater scrutiny via an in-depth inquiry unless Broadcom could address its concerns. On March 22, the regulators gave Broadcom five working days to respond.

“We will demonstrate that the transaction enhances competition and benefits businesses and consumers through increased quality, innovation and choice,” a Broadcom spokesperson told Reuters.

The UK’s pushback isn’t unique. The competition arm of the European Union has expressed repeated unease with a Broadcom takeover of VMware. And it looks as though the EU will soon issue an antitrust warning on the deal. EU regulators believe Broadcom might take advantage of an opportunity to restrict competition for hardware that works with VMware’s software.

Despite disquiet in Europe, regulators in Brazil, Canada and South Africa have given the Broadcom-VMware union their blessing.