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'Broadcom intends to make VMware its flagship brand', Raghu Raghuram
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In May, US semiconductor giant Broadcom said it will acquire cloud and virtualization services provider VMware in a cash-and-stock deal worth $61 billion. In an interview, Raghu Raghuram, chief executive officer of VMware, formerly a unit of Dell Technologies Inc., insisted that the merger will not have any immediate impact on its operations or employees even as he shared the future roadmap. Edited excerpts:
How will this merger impact VMware employees and customers globally as well as in India?
We have about 9,000 employees here. Globally, we have over 37,000 employees. We are roughly 2-3 times bigger than the Broadcom software business. As a result, we expect a large chunk of VMware operations to continue as is, which means a lot of the employees are going to continue doing what they are doing today. Broadcom has not announced its post-acquisition plans, so I can’t speak for them or be more specific at this stage. We are very clear that we will continue to exist as an independent company with our product strategies and market plans.
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But Broadcom is perceived to have a private equity (PE) mentality, which prompts it to make significant changes in the companies it acquires in a bid to turn-in more profits. How will VMware handle that mindset?
VMware is a very different company than either Brocade, CA (CA Technologies), or Symantec (all acquired by Broadcom). The breadth of the customer base, portfolio, go-to-market, and the centrality of VMware in our customers’ operations is very different. They’re (Broadcom) going to do what is right for the customer, partner, employees, and the business. At this point, we shall be patient and see how it plays out.
How do you see VMware benefiting from this merger with Broadcom?
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Broadcom is a very strong company with a strong history of investing in engineering-centric innovation. They’re now trying to execute the same playbook in software. They started in software a few years ago, with some assets. Now that they’ve acquired VMware, they intend to make it the flagship brand of their company and plug their existing software assets and future software assets that they buy into this brand. So, we think we’re going to get the best of both worlds, where we continue to operate largely as a brand that we do today and everything that we stand for, with the help of the deep pockets from Broadcom that’s going to help with future growth.
VMware is moving from being part of Dell to Broadcom, which is a cultural shift too. How will this work for VMware?
Both (Dell and Broadcom) are great companies in their own right with very different operating models. In the case of Dell, there was a significant synergy in the product categories. The engineering interchange between the two companies was very deep. We build joint products. Like VMware, Dell also has a very broad customer base across a large range of organizations and countries. In the case of Broadcom, that is not going to be the case. Even their software business is constrained to 400-500 customers whereas we have 300,000 customers. Also, they’re not building systems but semiconductors. So, I expect fewer product synergies than we had with Dell.
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Do you see a synergy with Broadcom’s other recent acquisitions such as CA Technologies and Symantec?
Broadcom has management software products that were previously part of CA. They have network security products that are part of Symantec Enterprise. I think there are opportunities for our products and their products to work together. We have, as two organizations, just started to engage in discovering the portfolio. And as we go through that, the synergy opportunities will become clear.
Even as this merger is to be completed, the world is embracing the hybrid and multi-cloud approach. How is VMware enriching this ecosystem?
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For most large or medium enterprises, the world is getting even more distributed and less centralized. About 70% of VMware customers are using two public clouds or more. Customers in manufacturing, retail, or telco are all building and rebuilding the edge (edge computing entails processing the data on end-devices like smartphones, etc.) as a very important area of investment. As a result, their applications are being distributed across data centres, private clouds, public clouds, and the edge. Our job is to help customers have a consistent developer experience and a consistent operational model for building and running these applications, whether they want to run them in the public cloud or private cloud.
Secondly, for existing applications, we provide them with a modern infrastructure, whether they will run on-prem (on the premises of the clients), or on the cloud. That’s where our traditional VMware infrastructure stack comes in.
Third, we are innovating for companies whose employee base is getting distributed. For most of our customers, two-thirds of employees want to work three days a week from home. For IT teams, the challenge is to provision these end users with the right tools and deliver a great digital and network experience. We are solving this problem for our customers.
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There’s a lot of buzz around AI-powered metaverses and web3. How is VMware helping customers understand these trends and navigate through the buzz?
There’s a lot of hype and buzzwords being thrown around here. A metaverse could be any set of things we are already using. Digital twin technology, for example, is now being called a Metaverse application. What we need to look at is a combination of a new experience or a new way of doing business or fundamentally superior ROI (return on investment). Those are the things that always drive enterprise adoption and we advise them to look at the world from those two lenses.
We are working with companies that are thinking about new commerce models that would potentially fall into the metaverse category. We ask them what is the business experience that they’re trying to go for and where can our technology help rather than saying here is web3; what do you want to do.
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Are we also going to see virtualization on the chip after the merger, given that Broadcom is a semiconductor company?
Independent of Broadcom we already had a project called Project Monterey where we put our hypervisor and our network virtualization software into a smart NIC (network interface card). The beauty of this is that it frees up more CPU cycles for the applications which make the data centre more efficient. This project is under development for two years. We intend to bring it out in production this year.
Broadcom has tremendous knowledge and expertise in the chip world. And I’m sure after the completion of the acquisition, these kinds of technology collaboration could become more prominent.