I have to admit the acquisition of VMWare by Broadcom came as a surprise. I had missed the news earlier in the year of a possible acquisition which has now come to pass. This event pulls a younger and more progressive company, VMWare under the umbrella of a more traditionally conservative and cutthroat corporate behemoth, Broadcom. When I first heard the news, I couldn’t imagine why Broadcom, known for their semiconductor manufacturing business would be interested in a software company such as VMWare. As this saga has progressed, it seems Broadcom is wanting to get into the enterprise cloud virtualization space. Unfortunately for VMWare and their employees, what Broadcom CEO Hock Tan has in mind looks very little like the VMWare they’ve known.

Hock Tan has taken Broadcom from a spin-off of HP (Agilent, which formed the basis of Avago) and grown it through acquisitions. In fact, that’s been Tan’s business strategy from the beginning. Tan seems to be more of an acquisitions-focused CEO, concerned only with maximizing profit and has no real concern for engineering or technology innovations. He sees something of value in another company and goes after it, ruthlessly stripping away anything not core to that feature and selling it off post-acquisition. Reading through their history, you’d almost have expected Richard Gere to pull up to VMWare HQ in his Lotus and begin the process of chopping up the company.

In a previous role, I worked with VMWare a lot. The company revolutionized the traditional IT industry by enabling companies to save money and be more fault tolerant all while using less physical hardware to support their services. I remember being excited by the possibilities it opened up for me as the then IT admin for an academic department within a relatively small college. VMWare invested in their customers too, supporting user groups who in turn helped the company through word of mouth.

VMWare has been the victim of their own success to a degree. The technology they spawned is now a base expectation for IT pros. Many other companies make products that compete in the same space, though arguably perhaps not as well. However, despite that dominance, the industry has largely moved beyond full system virtualization to the containerization of individual services with products like Docker and Kubernetes. There has also been a push over the last decade or more to move services onto the infrastructure of cloud providers like AWS, Azure or Google Cloud. While VMWare can have a role in both situations, they aren’t the only game in town and depending on the application, may not even be necessary.

Broadcom seems to be interested in VMWare’s core enterprise virtualization products. However, the move to spin off desktop and other non-core products, dropping support options for existing products and moving to a subscription only model, the harsh requirements ending remote work for employees, and the exodus of talent from the company paints a grim picture for the biggest name in the virtualization space.