Broadcom's VMware Strategy is Winning Despite Market Friction
theCUBEresearch, Monday, November 11th, 2024
Broadcom's acquisition of VMware is proceeding almost exactly as we expected when the deal was announced in May of 2022.
While much of the media and competitor narrative is focused on the increased license fees Broadcom is imposing and the urgency of migrating off VMware, customer conversations and recent data suggest that while migrations are happening, the real story is that VMware's more narrow focus and cost discipline are allowing Broadcom to integrate VMWare into its highly successful business model.
Specifically, we see two seemingly countervailing trends that are both possible to be true: 1) Customers are actively moving many low value workloads off VMware; and 2) Most mission critical work is staying put, allowing Broadcom to dramatically increase the contribution from its software business and deliver a roadmap for customers that will often be more cost effective than migrating.