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Broadcom’s ‘Initial Focus’ For VMware Will Be To Develop Partnerships, Not R&D: CEO

O’Ryan Johnson

“(W)hile we will look for opportunities post-close to further unlock VMware’s potential, our initial focus will be to continue building on the pioneering work and partnerships that define VMware today,” Tan said in an open letter to the VMware User Group.

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Broadcom CEO Hock Tan told the VMware User Group that its first priority for the virtualization company should his takeover be approved, will be to focus on partnerships, not investing in R&D.

“Our investment philosophy is about creating technology and products that provide clear value to customers, as well as improving their usability and delivery – R&D is critical to this effort,” Tan wrote in an open letter Tuesday to the group. “So, while we will look for opportunities post-close to further unlock VMware’s potential, our initial focus will be to continue building on the pioneering work and partnerships that define VMware today.”

In addition, Tan said he wants to make VMware easier for customers to access, and to do so he plans to invest “greater resources” into training and certificate programs.

The statements are the first indication of what could be Broadcom’s starting moves with VMware should the $61 billion mega deal pass muster with regulators. Since the possible takeover was announced in May, VMware partners and users have expressed concern about the company’s history of innovation dying with the deal.

[RELATED: Broadcom Software Group Cut R&D To Grow ‘Strategic Accounts’]

Tan made the statements Tuesday in an open letter to the VMware User Group, a community of VMware users who have met with Tan recently.

In the letter, Tan said the move is meant to nurture customer relationships across all of the company’s routes to market, including channel partners.

“VMware also has a robust partner ecosystem that we will continue to develop to help us serve all customers,” Tan wrote in a section of the letter headed ‘Our Commitment to the Entire VMware Ecosystem.’ “By doing so, we will enable partners to grow their businesses with expanded offerings of the combined portfolio and be better positioned to meet customers’ needs together.”

Tan did not mention how the deal is fairing with regulators. In the U.S., the Federal Trade Commission is nearly five months into a ‘second request’ investigation, which started in July. Most deals that are presented to the FTC are approved after an initial request. The second request is a deeper look at the transaction and has no timeline. However the takeover cannot close until the investigation is complete.

Meanwhile regulators at the European Commission are only days into their initial look at the merger, and will decide its next steps on Dec. 20.

In the letter to VMware users, Tan said Broadcom will invest in VMware’s development, adding that Broadcom itself has 19,000 patents, and spent $5 billion on R&D last year. CRN found Broadcom has spent less than VMware on R&D as a percentage of revenue, which is how companies traditionally present their innovation spend to investors.

“Although Broadcom is relatively new to software, our track record demonstrates our commitment to investing in product development to help our customers build and grow their businesses,” Tan wrote. “We have every intention of building on that legacy with the VMware transaction.”

O’Ryan Johnson

O’Ryan Johnson is a veteran news reporter. He covers the data center beat for CRN and hopes to hear from channel partners about how he can improve his coverage and write the stories they want to read. He can be reached at ojohnson@thechannelcompany.com..

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