Experts Explore Risks after Broadcom Acquired VMware

In this Tech Barometer podcast segment, IT industry analyst Steve McDowell and Lee Caswell from Nutanix discuss the challenges and risks IT operations leaders face in the wake of Broadcom’s acquisition of VMware.

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Transcript:

Steve McDowell: Broadcom announced quite a while ago that they’re acquiring VMware.

Lee Caswell: It’s not a light switch moment.

Steve McDowell: Because of regulatory hurdles and all sorts of other things, it stretched out for multiple quarters. That is where I think the initial wave of concern came in, because now not only do I have to wait and see, I have to wait multiple quarters to see.

Lee Caswell: Very rarely in IT do you just decommission something now instead, what you’re thinking is, all right, how do I make sure that I’m containing the risk, and then taking all the new things and putting that on the new modern infrastructure.

Jason Lopez: In the ever-evolving landscape of IT infrastructure, companies are increasingly finding themselves at a crossroads, particularly in the wake of significant industry acquisitions such as Broadcom’s purchase of VMware. This shift has ushered in concerns for VMWare’s customers.

[Related: Hedging Into Expected Broadcom Acquisition of VMware]

Lee Caswell: What happens if they’re not one of the top 2,000 customers?

Jason Lopez: Lee Caswell, Senior VP of Product and Solutions Marketing at Nutanix, says VMWare customers are worried about three major things: pricing going forward, and we’ll dive deeper into that in a few minutes, as well as support for products and the risk to personal careers.

Lee Caswell: Those customers are worried from a support standpoint. I think those customers are legitimately worried that they’re not going to get a call. Partners are worried, too, because Broadcom doesn’t have a great relationship with partners. So I think that support piece will come to be the thing that really actually unhinges them. And the third one is about personal career risk. If you can’t get support and you’re running something and you didn’t make a change, then all of a sudden it’s going to be back on you.

Steve McDowell: There’s a lot of uncertainty among the IT community about what Broadcom is going to do with VMware.

Jason Lopez: Steve McDowell is principal analyst at NAND Research.

Steve McDowell: Broadcom historically, they’ve largely acquired companies that have largely commoditized and they maintain them forward, but you don’t see a lot of continuing innovation. Are they just going to take the core VMware business and maintain that moving forward? Because the reality is a technology like VMware, or VM in particular, is very sticky, right? It’s hard to kind of rip and replace.

[Related: Broadcom’s Acquisition of VMware Stirs Uncertainty]

Lee Caswell: The way that customers are talking to me about this right now is that what they had with VMware for the past, you know, almost 20 years, right, was a very safe offering with known risks. And now what’s happened is what was the safe bet is now the risky bet. And it’s got unpredictable risks.

Steve McDowell: You know, if you have a VMware license, you’re probably not going anywhere for the life of that infrastructure, right? But where the uncertainty lives is on, you know, when I do come up to a replacement cycle or I have a greenfield project, you know, is VMware going to continue to deliver the level of innovation?

Jason Lopez: This has left many customers contemplating a strategic approach where they maintain their existing VMware infrastructure but refrain from expanding. Instead, they’re considering investing in new applications and technologies on alternative platforms based on newer architectures.

Steve McDowell: From Broadcom’s perspective, I think everything they’re doing makes a lot of sense for their investors and for maybe existing VMware customers. But where there’s, I think, going to continue to be a concern: how does the VMware technology continue to evolve, right? Am I still going to get the level of support I had? And am I still going to be paying the same amount of money? There’s also...