Broadcom Inc., an American designer, developer, manufacturer, and supplier of a wide range of semiconductor and infrastructure software products, announced acquiring U.S.-based cloud computing and virtualization technology company VMware, Inc. The acquisition was completed with the transaction of cash and stocks worth approximately US$61 billion.
Broadcom’s CEO, Hock Tan expressed optimism about the chances for success of the merged companies, with plans to fuse Broadcom's existing security and infrastructure software into VMware's portfolio.
"Hock Tan is a very shrewd business guy. He is aware of financial implications, both short and long-term, for his company with these acquisitions. Will he bleed it dry? I suppose that's a possibility, but it's not clear yet."
Brian Kirsch, an IT architect and instructor at Milwaukee Area Technical College
VMware users and employees were concerned that the company would face the same fate as others after being acquired by Broadcom, but they are adopting a wait-and-see attitude. However, post the statement mentioned above, the stakeholders of VMware are now worried that the innovative technologies of the company will land on Broadcom Inc.’s chopping block, same as previously acquired companies.
The concerns of VMware employees and users are justified, seeing the position of companies such as CA Technologies in 2018 and Symantec's Enterprise Software Business in 2019 after the adoption of the “acquire and axe” policy by Broadcom.
One of the VMware insiders who deals with multiple tech teams at the company mentioned that Broadcom will sell off the VMware products and solutions, except the most profitable ones.
He further stated, "Some employees are nervous because of the cuts they figure are coming. Others are concerned they won't invest in some products like NSX Intelligence that look like they have a promising future."