Broadcom has been working to expand VMware‘s portfolio since completing the $61 billion acquisition of the virtualization software company in November, according to Broadcom President and CEO Hock Tan. The company is transitioning VMware to a subscription licensing model and expects to reduce VMware‘s quarterly expenses by $1 billion. Enterprise customers have faced significant changes to VMware‘s licensing and product bundling post-acquisition, but many are reluctant to switch vendors due to their dependency on VMware‘s products and services.
Broadcom has been focusing on renewing contracts with VMware‘s largest customers, including nearly 3,000 of VMware‘s top 10,000 customers, in an effort to provide them with a self-service virtual private cloud on-premises. The company is emphasizing VMware‘s full-stack virtualization platform vSphere, which combines networking, storage, operations, and management in a private cloud. Despite a decline in revenue for VMware after the merger, Broadcom expects VMware‘s revenue to accelerate to a rate of $4 billion per quarter.
Overall, Broadcom is making progress in expanding VMware‘s portfolio and transitioning to a subscription licensing model, with a focus on retaining VMware‘s largest customers. The company aims to stabilize VMware‘s quarterly expenses at $1.2 billion following the acquisition. Despite challenges faced by enterprise customers due to abrupt changes post-acquisition, many remain loyal to VMware due to the difficulty of switching vendors and replicating VMware‘s stack with other software options.
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https://www.ciodive.com/news/broadcom-VMware-bundling-budget-cuts-saas-licensing/718859/