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Concerns and Impact of Broadcom’s Acquisition of VMware: Insights from Nutanix CEO

"The playbook for VMware is going to be very consistent as well: focus on the top customers. In the case of VMware they said, maybe around 1,500 to 2,000 customers." - CEO of Nutanix, Rajiv Ramaswam.
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Broadcom’s recent acquisition of VMware has raised concerns and sparked discussions within the technology industry. In this article, we will delve into the insights shared by the CEO of Nutanix, a prominent player in the virtualization and cloud computing market. We will explore the potential concerns arising from this deal, analyze its impact on the industry, and examine the implications for Nutanix and its customers. Additionally, we will analyze the long-term effects of Broadcom’s acquisition of VMware.

Broadcom’s Acquisition of VMware: Nutanix CEO’s Perspective

The CEO of Nutanix, Rajiv Ramaswami, has offered his perspective on Broadcom’s acquisition of VMware.  At the 2023 XChange Best of Breed conference in a Q&A session Ramaswami said, “Customers are not necessarily very happy. They typically will see pricing going up, roadmaps potentially getting shrunk, some products being divested, and support levels potentially coming down. VMware, of course, is being used for mission critical workloads by many customers. These are areas of concern [for customers].”

Ramaswami held prominent leadership roles at both VMware and Broadcom prior to assuming control of Nutanix, a renowned player in hyperconverged software and hybrid cloud, in 2020. He emphasized his familiarity with the outcomes of Broadcom’s acquisitions.  “The playbook for VMware is going to be very consistent as well: focus on the top customers. In the case of VMware they said, maybe around 1,500 to 2,000 customers,” he said. “They’re going to focus on optimizing costs quite a bit.”

“All the 2,000 customers at the top, Broadcom can take direct. And they have, in the past, taken them direct,” said Ramaswami. “So channel partners may not have a role in those companies.”

Potential Concerns Arising from the Broadcom-VMware Deal

One of the primary concerns stemming from Broadcom’s acquisition of VMware is the potential impact on competition in the virtualization and cloud computing market. With VMware being a major player in these domains, its integration into Broadcom’s portfolio may reduce competition and limit customer options. This could result in higher prices, decreased innovation, and a potential slowdown in the development of cutting-edge solutions. Furthermore, concerns have been raised about Broadcom’s history of acquiring companies and subsequently reducing investment in research and development.

Nutanix’s CEO, who was previously chief operating officer of Products and Cloud Services at VMware said, “[Customer] options are: stick with VMware, which some of them will probably do; go to the public cloud, which of course they’re trying—it’s not so easy just to migrate overnight to the public cloud—or look at an alternative like Nutanix, where we’ve had a long history of working with customers and converting them over.”

Impact on the Virtualization and Cloud Computing Market

The Broadcom-VMware deal is expected to have a significant impact on the virtualization and cloud computing market. VMware’s technology plays a crucial role in enabling businesses to streamline their operations and achieve greater efficiency. The integration of VMware’s capabilities into Broadcom’s offerings could potentially create a more comprehensive solution for customers. However, there are concerns that this consolidation could limit competition, drive up prices, and hinder the development of new and innovative solutions. It remains to be seen how this acquisition will reshape the market dynamics and the choices available to businesses.

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