Broadcom has signaled that the $61 billion acquisition of VMware will involve a “rapid transition from perpetual licenses to subscriptions.”
That’s what Tom Krause, president of Broadcom Software Group, said on Thursday’s Broadcom conference call. He was asked how the semiconductor giant plans to meet its guidance that VMware Broadcom will add approximately $8.5 billion in pro forma EBITDA to Broadcom within three years of the closing of the transaction — significant growth given that VMware currently has approximately 4, generated $7 billion. And subscriptions were the answer.
Krause also said repeatedly that Broadcom intends to invest in VMware’s key product portfolio and is pleased to acquire a sales organization and channel relationships that give it a reach that Broadcom does not currently enjoy.
Broadcom’s tight distribution efforts reflect its belief that CA Technologies performs best when it targets Global 500 companies through direct…