03-13-24 | Blog Post
Keep pace with the unfolding Broadcom VMware changes — it’s critical. The OTAVA team is closely monitoring every development to deliver the vital insights you need.
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Broadcom CEO Hock Tan is projecting substantial growth for Broadcom’s VMware sector, expecting double-digit increases for the remainder of the year. The growth will be driven by a strategic upsell initiative targeted at 2,000 key customers. This initiative will promote the adoption of VMware Cloud Foundation (VCF), a virtual private cloud solution for on-premises data centers.
On February 26, global investment firm KKR entered into a definitive agreement to acquire Broadcom’s End-User Computing (EUC) Division for approximately $4 billion. The EUC Division encompasses digital workplace solutions Workspace ONE (a Unified Endpoint Management (UEM) platform, and Horizon (a desktop and application virtualization platform), previously part of VMware before Broadcom’s acquisition.
Under KKR’s ownership, the EUC Division will operate as a separate company, focusing on delivering and managing applications, desktops, and data across any device or platform with an emphasis on security and efficiency. The standalone company will continue to be run by the current management team of the EUC Division led by Shankar Iyer.
Dell has announced that it will no longer be distributing VMware’s cloud computing software products and services. This information was disclosed in a recent US regulatory filing. Dell and VMware had a distribution agreement in place, which was part of their broader partnership since VMware’s separation from Dell in 2021. However, Dell has decided to end this partnership, and the reason behind it is VMware’s acquisition by Broadcom.
Previously, Dell had a role in distributing VMware’s goods. Still, when Broadcom acquired VMware for a hefty $69 billion in November 2023, it triggered a clause allowing either party to end the agreement with a 60-day notice. This shift also marked VMware’s transition from selling perpetual software licenses to a subscription-based model, with no more renewals for perpetual licenses. So, it’s all part of VMware’s journey to align with the industry’s cloud consumption standards.
As we navigate this transition period, VMware by Broadcom provided an update regarding the program transformation status for their Cloud Services Provider (CSP) partners.
The new VMware by Broadcom partner program for CSPs is in the final stages of development and is planned to launch in early February 2024. This new program aims to enhance collaborative efforts and provide CSP partners with the best possible framework for future success.
VMware is undergoing a significant transformation, retiring 56 individual products, and it seems like they are introducing a new all-in-one offering called “VMware vSphere Foundation.” This unique subscription-based platform aims to optimize data centers, improve operational efficiency, enhance workload performance, and accelerate innovation for organizations of all sizes. It offers predictive and proactive operations management, simplifies availability, and provides comprehensive visibility.
Key benefits include cost reductions in hardware, faster issue resolution, and minimize unplanned downtime. VMware vSphere Foundation aligns with the changing IT landscape, offering flexibility, risk reduction, and scalability, all while addressing the industry trend toward subscription models.
It’s designed to streamline procurement and vendor/license management. This transition provides existing vSphere Enterprise Plus and vCloud Suite Standard users with potential cost savings of up to 50% over a 3-year subscription. It offers various add-ons to cater to specific use cases, making it a versatile solution for businesses looking to adapt to evolving IT needs.
Broadcom has completed its acquisition of VMware. Read the full press release.
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