The cloud soul battle got a bit darker when Broadcom announced plans to pay $61 billion for VMware, a price tag that makes the merger one of the largest technological deals ever. The acquisition gives the growing conglomerate control over a once-crucial layer for software deployment.
Broadcom may be widely known as a manufacturer of chips and components like modems, but those years are long gone. The modern version is rapidly developing into a business hybrid that absorbs individuals, often with legacy technology, and finds a path to operate them independently and profitably. The new purchase represents a significant shift from traditional hardware manufacturing to the booming software world.
VMware is a company known for its ability to create an almost indispensable piece of software used by developers and developers to develop and operate virtual machines. Its long been popular with developers, allowing them to package all of the files and operating system for a particular machine into a file that may be easily replicated. Users can download a copy of the VM file, start it up anywhere, and be confident that there will be no interruptions.
A user with the handle Luna told Hacker News why VMware is an attractive purchase. Despite the fact that a lot of orgs still have their own kits, VMware provides some excellent tools to squeeze the most of that investment. There are competitors in the space, but none with VMware''s breadth and depth.
VMware, according to Indigodaddy, is for the most part just works and is embedded.
While virtualization dates back to the world of mainframe computers, VMware developed it as desktop-sized machines. In many cases, the same technique is becoming more widespread in the world of multiple competing clouds. VMware''s technology is an essential component in strategy that involves deploying easily to the cloud where it can run quickly, securely and cheaply.
The Broadcom acquisition umbrella
Broadcom intends to include some of its other software business with VMware and execute them all under the brand name VMware. The company has already assembled a wide spectrum of software companies that provide exceptional capabilities for tasks such as AIops and devops, requiring similar but far greater acquisitions. Arcot, Symantec, Clarity, and Rally are among the trademark names currently under the Broadcom umbrella.
The VMware line is quite complementary. Broadcom''s security and operations management tools are currently addressing different challenges than VMware. All of them, however, are purchased and deployed by the same developer teams managing their local stack.
Combining our assets and a talent-based team with Broadcom''s existing enterprise software portfolio, all managed under the VMware brand, creates a remarkable enterprise software player. Together, we will further expand customer choice, value, and innovation, enabling them to thrive in this increasingly complex multicloud world.
The merger also offers both companies a chance to diversify. Broadcom has left behind its focus on chip manufacturing and hardware manufacturing because to the potential of higher margins with software. VMware has access to the hardware layer and the long-term stability of the hardware business.
[Broadcom CEO Hock Tan] has already stated that the current chip boom will not last, and he has stated that he does not desire to be stuck with the lower growth rates that might come when today''s semiconductor party becomes tomorrow''s hangover, according to Bloomberg analyst Tim Culpan.
The attractive and competitive software market
In the face of increasing competition, Broadcom will be able to retain its VMware installed base. Many applications prefer lightweight options such as Docker, which is sometimes called containers. These breaks apart the file into smaller, composable pieces, thus saving time and bandwidth for shipping and installing them.
Kubernetes, an open-source solution that will quickly organize containers by scaling them up and down, is popular among vendors. VMware also has similar features, but often includes proprietary software that is often easier to use and more automated. Their tools will also deploy and juggle virtual machines while ensuring security.
The new VMware will be to maintain sufficient quality in the existing software to ensure that customers don''t have an incentive to modify their applications. Besides, they may reduce headcount and increase prices to help increase profit. This game strategy often depends on the new management team clearing out deadwood and optimizing the organization to save income and speed development.
Broadcom does have a strategy with acquisitions that will not always make the innovators happy, but the strategy thus far has worked for shareholders, according to Daniel Newman, the founding partner and principal analyst of Futurum Research. Im hearing this a lot, but personally do not believe it to be as serious as others.
Integration or assimilation?
Broadcom might also be able to create certain synergies between the various software lines in both companies. The different software packages in previously independent brands such as Symantec, Arcot, and VMware may be better integrated so that they may deliver better performance and cross-sell across the products lines.
Some say that VMware is slowly becoming the private cloud''s default base layer, and it is slowly expanding into the public cloud. Applications can be bundled into one VM file that runs either locally or in a distant cloud.
According to Spaniatech, VMware has become the private cloud''s operating system. From an enterprise perspective, VMware is closer to the hardware than any other operating system.
Some believe that the synergy between the two components will help the company move to data centers, building ARM, RISC, and x86-based machines that work perfectly with the VMware layer.
Those possibilities, however, may be further developed in the future. The current announcement states that the agreement will not last until 2023. Moreover, the agreement provides a go-shop clause that permits VMware to look for other applicants. This clause seems primarily aimed at finding the best price, although much of the effort is to exploit the potential benefits of combining Broadcoms'' software portfolio with VMwares.
According to Tom Krause, the CEO of the Broadcom software group, VMware''s platform and infrastructure software solutions will serve various but powerful enterprise needs, and the combined company will be able to meet both of these requirements more effectively and securely.