Broadcom to Acquire VMWare for $61 Billion

Posted on May 27, 2022 by Paul Thurrott in Cloud with 8 Comments

Broadcom announced that it will acquire virtualization pioneer VMWare for $61 billion in cash and stock.

“Building upon our proven track record of successful M&A [mergers and acquisitions], this transaction combines our leading semiconductor and infrastructure software businesses with an iconic pioneer and innovator in enterprise software as we reimagine what we can deliver to customers as a leading infrastructure technology company,” Broadcom president and CEO Hock Tan said. “We look forward to VMware’s talented team joining Broadcom, further cultivating a shared culture of innovation and driving even greater value for our combined stakeholders, including both sets of shareholders.”

VMWare, an early proponent of virtualization, has been involved in multiple acquisitions over the years. In early 2004, the firm was acquired by EMC for $625 million in cash. But then Dell acquired EMC in 2016 for an incredible $67 billion. In early 2021, after VMWare CEO Pat Gelsinger left the company to lead microprocessor giant Intel, Dell announced that it would sell off its remaining stake in VMWare, and then it spun off the company.

With the Broadcom acquisition, the Broadcom Software Group will rebrand itself and operate as VMware once the transaction is complete, “incorporating Broadcom’s existing infrastructure and security software solutions as part of an expanded VMware portfolio.” Broadcom says that the two company’s portfolios are “complementary” and that the combined company will be an infrastructure powerhouse.

“VMware has been reshaping the IT landscape for the past 24 years, helping our customers become digital businesses,” VMWare CEO Raghu Raghuram said. “We stand for innovation and unwavering support of our customers and their most important business operations and now we are extending our commitment to exceptional service and innovation by becoming the new software platform for Broadcom. Combining our assets and talented team with Broadcom’s existing enterprise software portfolio, all housed under the VMware brand, creates a remarkable enterprise software player. Collectively, we will deliver even more choice, value and innovation to customers, enabling them to thrive in this increasingly complex multi-cloud era.”

Broadcom expects the transaction to be completed in its 2023 fiscal year, which ends May 1, 2023, subject to regulatory and shareholder approval.

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Comments (8)

8 responses to “Broadcom to Acquire VMWare for $61 Billion”

  1. rm

    I wonder if Microsoft had any interest in VMware.

    • ebraiter

      Doubt it. Microsoft already has Hyper-V and regulators may not be too happy as less competition.

  2. dougkinzinger

    I guess after buying Symantec a couple years ago Broadcom wants to throw even more money away!

  3. asdfasedasdfasdf

    I don't get this acquisition. VMware has been going downhill for about 3 years, both in product quality and support. vSphere 7.0 has been a series of missteps. And everyone is being forced to the cloud, anyway, so what is VMware's long-term future? Same with the enterprise storage vendors. They keep coming up with overpriced products to sit on top of what Amazon and Azure can provide.

    • behindmyscreen

      If they are pushing you to the cloud then customers might as well move to Azure desktop.

    • Cardch

      The Microsoft management stack on Azure is not feature rich enough on its own. You need to partner with someone like VMWare or Citrix to get the enterprise features that big companies require. That is the future of these companies, not their virtualisation stack itself.

  4. simard57

    I started to work with VMware when they were a 65 person company. Amazing how their value and influence has grown.