“In terms of monetization, it's all about execution.
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Muse, but it would roughly triple the size of Broadcom’s software business. With VMware under its belt, it leaves Broadcom with roughly $90 billion in debt, according to an analysis by Evercore chip analyst C.J.The Big 3 (AWS, Microsoft and Google) cloud providers, Cisco Systems and Intel could be logical contenders to buy VMware, but some industry analysts don’t expect other suitors to step forward and thwart Broadcom’s deal.īased on its track record following its two other major software acquisitions – CA Technologies in 2018 and Symantec's enterprise security business the following year – Broadcom could target an estimated $5 billion-plus in cost savings to improve VMware’s margins and profitability, according to Bernstein analysts.Given the $61 billion price, however, there are only a handful of enterprise tech companies that have the resources to pursue such a deal.Under the terms of the deal, VMware will have until July 5 to solicit other offers from other possible acquirers.“We have for several years expressed much caution on VMware given our concerns about VMware’s on-premise exposure, its overall growth profile and its ability to execute on a consistent basis,” Mizuho Group analyst Gregg Moskowitz said in a research note on Monday, after news of a pending deal leaked out.VMware’s acquisition does not come as a total surprise. "We are creating one of the world's largest infrastructure technology companies," Tan said on a conference call Thursday discussing the deal.
"We think together, Broadcom’s software assets for the distributed enterprise can seamlessly complement and augment VMware's multicloud offerings in the areas of operation management, value stream and DevOps management, and security to address the entire application life cycle," said Tom Krause, president of the Broadcom Software Group, on a conference call following the announcement.The company will pay $61 billion in a cash and stock deal for VMware and fold the Broadcom Software Group, which contains previous acquisitions CA Technologies and Symantec, into a new organization called VMware.
Broadcom officially announced the deal Thursday morning, several days after its intent to acquire VMware leaked out.While Broadcom’s $61 billion acquisition of VMware will further broaden the chipmaker’s growth prospects beyond semiconductors by giving it more enterprise software clout and recurring revenue, the immediate benefits are less apparent for VMware. Through multiple billion-dollar acquisitions what has emerged is a conglomerate that is beloved by Wall Street analysts but difficult to look at as a coherent operation with a clear, core business. Once known primarily for its semiconductors, Broadcom has become something of a technology hedge fund, adding various potentially promising companies to its portfolio of businesses, as part of CEO Hock Tan’s quest to turn it into a software play. If Wall Street had to invent a company, it would probably look a lot like Broadcom. Wall Street’s lights are bright on BroadWare
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