VMware must assure APAC customers Broadcom acquisition won't repeat history
VMware should actively work to assure customers in Asia-Pacific that the Broadcom merger will not follow in the footsteps of previous acquisitions with CA Technologies and Symantec. And while the integration of key assets from the three companies can potentially create a viable multi-cloud player, it remains to be seen if Broadcom can succeed in doing so.
Broadcom in May said it was seeking to purchase an 88% stake in VMware for $61 billion, prompting concerns over what that might mean for the latter's brand.
Following the announcement, Forrester analysts said VMware customers should be anxious if Broadcom applied the same treatment it did with its CA and Symantec acquisitions. Customers of the two vendors saw price hikes, dipping support, and stalled development. Forrester added that Symantec shifted its focus to its biggest customers and resellers, prioritising the top 2,000 of its clientele of 100,000.
Existing and new customers would want to monitor VMware's actions, which would serve as early indications of any potential shift in how the vendor engaged with its clientele, Simon Piff, IDC's Asia-Pacific vice president told ZDNET.
He said the acquisition should prompt questions about whether VMware would continue with its current customer path in Asia-Pacific for now as well as in the future, or whether it would result in similar consequences with the CA and Symantec acquisitions.
VMware would need to be vocal and active with its customers in the region to assure them that what happened with the two previous acquisitions would not occur again, Piff said.
"Broadcom may not have planned for the apparent evaporation of CA and Symantec in Asia-Pacific, but it happened. If they want to assure customers this won't happen, they need to be vocal and seen to be doing the right things. Any slip-up here and they will spend a lot of cycles recovering, which will not be good for anyone," the IDC analyst said.
While Broadcom or VMware had yet to offer a clearly defined organisation from the impending merger, Piff noted that a combination of critical assets from VMware, Symantec, and CA would create a compelling partner for organisations looking to manage their multi-cloud environments.
The merged entity could help accelerate the "effective, secure, and more easily managed adoption" of multi-cloud, he added.
Whether Broadcom would be able to do so, though, remained to be seen, he said.
During a media Q&A at VMware's Explore conference Tuesday in San Francisco, ZDNET asked the vendor's CEO Raghu Raghuram if he saw potential for both CA and Symantec's technologies to be integrated with VMware's portfolio and drive the latter's pitch as the market player to help companies manage their multi-cloud deployment.
Raghuram declined to comment, saying that the vendor could not discuss activities related to the impending acquisition that still were under consideration, including product integration and synergies.
At the conference, where Broadcom CEO Hock E. Tan was amongst the attendees, Raghuram said VMware currently was helping its future parent understand the "depth and breadth" of its products and business. He added that the company was in its next major transition and "on track" to close the acquisition by the end of Broadcom's fiscal 2023, which spanned November 2022 to October next year.
For now, he said, VMware continued to operate as a standalone company.
Adding that details about the merger would be revealed once the acquisition was finalised, Raghuram said the overall message from the union was that its partners would see greater and broader opportunities to support customers of both companies.
Until then, VMware will need to work on a "clear and solid" go-to-market strategy.
This should encompass its business and financial structures, product and development roadmap, and partner ecosystem, said Charlie Dai, Forrester's vice president and research director, who leads the team in China.
This should serve to demonstrate the vendor's continued commitment along the journey, he told ZDNET.
Based in Singapore, Eileen Yu reported for ZDNET from VMware Explore 2022 in San Francisco, USA, on the invitation of VMware.