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Broadcom Looking to Buy VMWare for $60 Billion

Lurick
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Summary

Broadcom (AVGO) is currently in what appears to be late stage talks to acquire hypervisor and virtualization vendor VMWare for around $60 billion which works out to about $140/share at the current numbers. The final announcement is rumored to be announced Thursday (May 26th).

 

Quotes

Quote

At the time of its spinout from Dell, VMware said it would enjoy "increased freedom to execute its multi-cloud strategy, a simplified capital structure and governance model, and additional operational and financial flexibility." Those factors, execs said, would help VMware to accelerate.

If Broadcom were to buy VMware, it is unclear how those advantages would be preserved

Maybe chip-design titan Broadcom could pull off the same trick. VMware has also shown it can partner closely with an owner without scaring away other close partners – Dell's ownership and inside access to VMware tech didn't stop the likes of HPE, IBM, and Lenovo continuing to do business with the virtualization giant. Broadcom could integrate VMware with its 5G, SmartNIC, and Arm-based processor businesses, and otherwise keep it credibly independent.

 

My thoughts

Having seen what people have talked about when Broadcom bought other companies such as Symantec and CA I do not have high hopes that VMWare will be around for much longer if this goes through. There are still some anti-trust hurdles I believe which could stop this but having heard horror stories from many people about trying to work with Broadcom for licensing alone I think this is going to be very bad for a lot of places if this goes through.

 

Sources

https://www.theregister.com/2022/05/24/vmware_broadcom_acquisition_rumor/

https://www.wsj.com/articles/broadcom-discussing-paying-around-140-a-share-for-vmware-people-say-11653334946

https://apnews.com/article/technology-michael-dell-inflation-6b654d54abcfafc63b4c9e698a7235fd

 

 

Edit:

Broadcom has confirmed plans to convert VMWare to subscription based licensing instead of perpetual:

https://www.theregister.com/2022/05/27/broadcom_vmware_subscriptions/

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no-noooo.gif

Having dealt with Broadcom SoC's in my youth with Android devices, I have grown to hate them with every single one of their products. Vmware on the other hand has been just the opposite, smooth sailing all around. I would be upset if this deal goes through and broadcom continues to shit all over the great job vmware has done all over the years.

mY s YsTeM iS Not pErfoRmInG aS gOOd As I sAW oN yOuTuBe. WhA t IS a GoOd FaN CuRVe??!!? wHat aRe tEh GoOd OvERclok SeTTinGS FoR My CaRd??
 HoW CaN I foRcE my GpU to uSe 1o0%? BuT WiLL i HaVE Bo0tllEnEcKs? RyZEN dOeS NoT peRfORm BetTer wItH HiGhER sPEED RaM!!dId i WiN teH SiLiCON LotTerrYyOu ShoUlD dEsHrOuD uR GPUmy SYstEm iS UNDerPerforMiNg iN WarzONEcan mY Pc Run WiNdOwS 11 ?woUld BaKInG MY GRaPHics card fIX it?
 MultimETeR TeSTiNG!! aMd'S GpU DrIvErS aRe as goOD aS NviDia's YOU SHoUlD oVERCloCk yOUR ramS To 5000C18

 

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RIP

Havent touched their junk since i jumped over to xcp-ng....

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12 minutes ago, Lurick said:

I do not have high hopes that VMWare will be around for much longer if this goes through.

VMware going out of business would be almost akin to microsoft going out of business - almost unthinkable in the current landscape. I'd expect broadcom to largely let vmware be vmware, maybe adding some specific projects they're interested in.

Don't ask to ask, just ask... please 🤨

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Sauron'stm Product Scores:

Spoiler

Just a list of my personal scores for some products, in no particular order, with brief comments. I just got the idea to do them so they aren't many for now :)

Don't take these as complete reviews or final truths - they are just my personal impressions on products I may or may not have used, summed up in a couple of sentences and a rough score. All scores take into account the unit's price and time of release, heavily so, therefore don't expect absolute performance to be reflected here.

 

-Lenovo Thinkpad X220 - [8/10]

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A durable and reliable machine that is relatively lightweight, has all the hardware it needs to never feel sluggish and has a great IPS matte screen. Downsides are mostly due to its age, most notably the screen resolution of 1366x768 and usb 2.0 ports.

 

-Apple Macbook (2015) - [Garbage -/10]

Spoiler

From my perspective, this product has no redeeming factors given its price and the competition. It is underpowered, overpriced, impractical due to its single port and is made redundant even by Apple's own iPad pro line.

 

-OnePlus X - [7/10]

Spoiler

A good phone for the price. It does everything I (and most people) need without being sluggish and has no particularly bad flaws. The lack of recent software updates and relatively barebones feature kit (most notably the lack of 5GHz wifi, biometric sensors and backlight for the capacitive buttons) prevent it from being exceptional.

 

-Microsoft Surface Book 2 - [Garbage - -/10]

Spoiler

Overpriced and rushed, offers nothing notable compared to the competition, doesn't come with an adequate charger despite the premium price. Worse than the Macbook for not even offering the small plus sides of having macOS. Buy a Razer Blade if you want high performance in a (relatively) light package.

 

-Intel Core i7 2600/k - [9/10]

Spoiler

Quite possibly Intel's best product launch ever. It had all the bleeding edge features of the time, it came with a very significant performance improvement over its predecessor and it had a soldered heatspreader, allowing for efficient cooling and great overclocking. Even the "locked" version could be overclocked through the multiplier within (quite reasonable) limits.

 

-Apple iPad Pro - [5/10]

Spoiler

A pretty good product, sunk by its price (plus the extra cost of the physical keyboard and the pencil). Buy it if you don't mind the Apple tax and are looking for a very light office machine with an excellent digitizer. Particularly good for rich students. Bad for cheap tinkerers like myself.

 

 

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1 hour ago, Sauron said:

VMware going out of business would be almost akin to microsoft going out of business - almost unthinkable in the current landscape. I'd expect broadcom to largely let vmware be vmware, maybe adding some specific projects they're interested in.

I hope you're right but every acquisition by Broadcom so far seems to indicate many people are axed/gutted and licenses become hell to manage.

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I feel like Broadcom is just universally hated in the tech world. When I think of them, the first thing that comes to mind is their defective audio ICs used on the iPod Video.

Highly knowledgeable in all the obscure 2000s hardware & software you'll never need to ask about

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Isn't 60 billion a bit of a stretch?

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56 minutes ago, Marko1600 said:

Isn't 60 billion a bit of a stretch?

bro you have no idea how much their virtualization tech is used.

before cloud was the popular choice for hosting your stuff and before docker and Kubernetes existed, vmware was the people you went to if you needed to use virtualization technology in your business's infrastructure for anything from high service availability for network resources to running end clients that your users remoted into.

and that fact that it could be integrated into active directory made it a no brainer for many businesses.

 

nowadays linux and KVM hypervisors are much more popular for virtualization (mainly because it's free and the businesses can modify them to integrate with their existing setups and create custom setups to best suit their requirements) but vmware is still used in places that either have fully integrated it into their systems or it has a feature that KVM hypervisors don't have or do have but it's not mature/stable enough for use in a business environment. (such as 3D acceleration, i've had so many problems getting spice working and the fact that the process for vmware drivers is just, enabling 3d acceleration in the vm settings, installing the vmware driver then rebooting the vm and have so many programs work without much fuss is so nice!)

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4 hours ago, AudiTTFan said:

I feel like Broadcom is just universally hated in the tech world. When I think of them, the first thing that comes to mind is their defective audio ICs used on the iPod Video.

*cough* bought Avago who bought LSI who made MegaRAID cards.  Now when I go to find the latest firmware for me 9280i card the one broadcom offers is like 2010....my card has 2015 on it.   (EDIT: I got it backwards, Avago bought Broadcom and LSI separately and then Avago decided to just use the Broadcom name completely)

 

So yeah my experience there is they buy it to then do nothing with it or outright go backwards.

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12 hours ago, Levent said:

no-noooo.gif

Having dealt with Broadcom SoC's in my youth with Android devices, I have grown to hate them with every single one of their products. Vmware on the other hand has been just the opposite, smooth sailing all around. I would be upset if this deal goes through and broadcom continues to shit all over the great job vmware has done all over the years.

Let me ask you this because I have no experience with their mobile SoCs. What experience did you have if any with their computer networking products such as integrated NICs and Broadcom based add in network cards? They are active in the 10Gb space and the products seem well received.

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12 hours ago, Lurick said:

My thoughts

Having seen what people have talked about when Broadcom bought other companies such as Symantec and CA I do not have high hopes that VMWare will be around for much longer if this goes through. There are still some anti-trust hurdles I believe which could stop this but having heard horror stories from many people about trying to work with Broadcom for licensing alone I think this is going to be very bad for a lot of places if this goes through.

This statement makes zero sense. 

 

You think Broadcom just buys $60 billion companies so they can just... what? Run them into the ground for the lulz? If the CA and Symantec acquisitions were as dire as you indicate, Broadcom would be on the brink of financial disaster. Which... they're not. Their market cap has exploded in the time since those acquisitions.

 

🤦‍♂️

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8 hours ago, NF-F12 said:

Let me ask you this because I have no experience with their mobile SoCs. What experience did you have if any with their computer networking products such as integrated NICs and Broadcom based add in network cards? They are active in the 10Gb space and the products seem well received.

Broadcom did not even release sources of their GPU blobs for over 2 (or more) years after their SoC was released (I believe even RPI1-2 was also affected), this resulted in having hell of a time trying to even get a smooth 720p playback or even smooth UI experience on custom roms back in the day. Broadcom has a long and shitty history with their software side of their hardware.

mY s YsTeM iS Not pErfoRmInG aS gOOd As I sAW oN yOuTuBe. WhA t IS a GoOd FaN CuRVe??!!? wHat aRe tEh GoOd OvERclok SeTTinGS FoR My CaRd??
 HoW CaN I foRcE my GpU to uSe 1o0%? BuT WiLL i HaVE Bo0tllEnEcKs? RyZEN dOeS NoT peRfORm BetTer wItH HiGhER sPEED RaM!!dId i WiN teH SiLiCON LotTerrYyOu ShoUlD dEsHrOuD uR GPUmy SYstEm iS UNDerPerforMiNg iN WarzONEcan mY Pc Run WiNdOwS 11 ?woUld BaKInG MY GRaPHics card fIX it?
 MultimETeR TeSTiNG!! aMd'S GpU DrIvErS aRe as goOD aS NviDia's YOU SHoUlD oVERCloCk yOUR ramS To 5000C18

 

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4 hours ago, Roswell said:

This statement makes zero sense. 

 

You think Broadcom just buys $60 billion companies so they can just... what? Run them into the ground for the lulz? If the CA and Symantec acquisitions were as dire as you indicate, Broadcom would be on the brink of financial disaster. Which... they're not. Their market cap has exploded in the time since those acquisitions.

 

🤦‍♂️

Where did I say "run them into the ground for lulz"? There are plenty of people who were axed, entire departments and large chunks of sales people, just before or just after the acquisition that would show otherwise. Just because I say they won't be around much longer doesn't mean "doing it for lulz" either, it's in the lines of "the VMWare we know today won't be around much longer because it will likely end up gutted on the sales and development side in the near term to make room for Broadcom's way of doing things". There are also plenty of times companies buy others just to acquire their IP and dump the rest of the people without reason.

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11 hours ago, Roswell said:

This statement makes zero sense. 

 

You think Broadcom just buys $60 billion companies so they can just... what? Run them into the ground for the lulz? If the CA and Symantec acquisitions were as dire as you indicate, Broadcom would be on the brink of financial disaster. Which... they're not. Their market cap has exploded in the time since those acquisitions.

 

🤦‍♂️

They are not bad in the sense that these companies go bankrupt. Broadcom of today is run by finance people, who squeeze every last drop of profit available, be it at the cost of reduced product quality.

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13 minutes ago, WolframaticAlpha said:

They are not bad in the sense that these companies go bankrupt. Broadcom of today is run by finance people, who squeeze every last drop of profit available, be it at the cost of reduced product quality.

And the increase of prices several fold or vendor lock-in strategies too are a huge concern as well.

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13 hours ago, Lurick said:

Where did I say "run them into the ground for lulz"? There are plenty of people who were axed, entire departments and large chunks of sales people, just before or just after the acquisition that would show otherwise. Just because I say they won't be around much longer doesn't mean "doing it for lulz" either, it's in the lines of "the VMWare we know today won't be around much longer because it will likely end up gutted on the sales and development side in the near term to make room for Broadcom's way of doing things". There are also plenty of times companies buy others just to acquire their IP and dump the rest of the people without reason.

 

As an ex-Symantec employee I went through their acquisition first hand. 

Broadcoms approach was to focus on the largest customers by spend globally and leave anything on the small side to the channel (and by small, I mean anything out of the global 1000 largest customers). 

At least in Australia, around 85-90% of the local team was let go in the name of streamlining operations. Globally, there was a huge amount of people let go, although not sure of the exact percentage (i've heard it was closer to 70% globally). 

They went through and culled multiple products from the range. They also made major changes to channel and support operations. It definitely alienated a lot of the customer base and partners that has worked with them for years. 

It's reported that the existing Broadcom software solutions will be brought into the VMware product stack. 

 

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2 hours ago, DogKnight said:

As an ex-Symantec employee I went through their acquisition first hand.

 

They went through and culled multiple products from the range. They also made major changes to channel and support operations. It definitely alienated a lot of the customer base and partners that has worked with them for years. 

It's reported that the existing Broadcom software solutions will be brought into the VMware product stack.

that sounds like fun, I mean ready to hit cancel on any such products. nice to see stuff like F-secure growing, wonder how many 90s to early 20's software is on a downhill.

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On 5/25/2022 at 2:33 PM, Levent said:

no-noooo.gif

Having dealt with Broadcom SoC's in my youth with Android devices, I have grown to hate them with every single one of their products. Vmware on the other hand has been just the opposite, smooth sailing all around. I would be upset if this deal goes through and broadcom continues to shit all over the great job vmware has done all over the years.

Raspberry Pi 3 model B launches today - 64-bit quad A53 1.2 GHz BCM2837 ...

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2 hours ago, Quackers101 said:

that sounds like fun, I mean ready to hit cancel on any such products. nice to see stuff like F-secure growing, wonder how many 90s to early 20's software is on a downhill.

 

See how it plays out. This acquisition is going to take a while and will not happen until November this year at the earliest if it goes ahead. 

Secondly, Broadcom has stated its intention to make VMware its software arm and move all existing software solutions under the VMware banner. This will result in some consolidation of solutions, but shouldn't impact its core business (VSphere, VMC, etc). Likely to be no changes for quite some time there. 

Either way, no need to rush to anything and just keep an eye on how it plays out. Fingers crossed Broadcom have learnt some lessons from its previous acquisitions and how they played out. 

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2 hours ago, Forbidden Wafer said:

Raspberry Pi 3 model B launches today - 64-bit quad A53 1.2 GHz BCM2837 ...

Yes and?

mY s YsTeM iS Not pErfoRmInG aS gOOd As I sAW oN yOuTuBe. WhA t IS a GoOd FaN CuRVe??!!? wHat aRe tEh GoOd OvERclok SeTTinGS FoR My CaRd??
 HoW CaN I foRcE my GpU to uSe 1o0%? BuT WiLL i HaVE Bo0tllEnEcKs? RyZEN dOeS NoT peRfORm BetTer wItH HiGhER sPEED RaM!!dId i WiN teH SiLiCON LotTerrYyOu ShoUlD dEsHrOuD uR GPUmy SYstEm iS UNDerPerforMiNg iN WarzONEcan mY Pc Run WiNdOwS 11 ?woUld BaKInG MY GRaPHics card fIX it?
 MultimETeR TeSTiNG!! aMd'S GpU DrIvErS aRe as goOD aS NviDia's YOU SHoUlD oVERCloCk yOUR ramS To 5000C18

 

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On 5/25/2022 at 11:42 PM, Levent said:

Broadcom did not even release sources of their GPU blobs for over 2 (or more) years after their SoC was released (I believe even RPI1-2 was also affected), this resulted in having hell of a time trying to even get a smooth 720p playback or even smooth UI experience on custom roms back in the day. Broadcom has a long and shitty history with their software side of their hardware.

Wonder what it would take for Raspberry Pi to get ahold of their own GPU IP to open source? Even if funding isn’t a problem, is it even possible nowadays without running into patent issues?

My eyes see the past…

My camera lens sees the present…

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13 minutes ago, Zodiark1593 said:

Wonder what it would take for Raspberry Pi to get ahold of their own GPU IP to open source? Even if funding isn’t a problem, is it even possible nowadays without running into patent issues?

They probably can't, unless Broadcom allows that. Probably easier to work with RISC-V and try to push open GPU archs.

https://riscv.org/news/2021/10/vortex-extending-the-risc-v-isa-for-gpgpu-and-3d-graphics-research-blaise-tine-fares-elsabbagh-krishna-yalamarthy-and-hyesoon-kim-georgia-institute-of-technology/

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