Broadcom CEO Hock Tan

Pricing “Top of Mind For Customers” 

Over the last several weeks, I have had the opportunity to visit with Broadcom customers around the world to discuss what’s on the horizon as they navigate increasingly complex IT operating environments. During these visits, I’ve also answered their questions and shared our vision of what a combined Broadcom and VMware will look like following the close of the transaction.

It’s clear from these conversations that three topics are top of mind for customers as it relates to the VMware-Broadcom transaction: multi-cloud, cloud-native apps and pricing. Ultimately, what I’ve stressed to them has been straightforward: our customers are and will remain the most important part of our business. That said, I want to discuss each of these topics and share my current thinking to help address the concerns I’ve heard.

We work with our customers every day to tackle a wide spectrum of challenges, and we are constantly innovating to create the next generation of technology to address their needs. This is largely what has made our business successful, and we intend for this to continue.

Our growth into a global technology leader was not based on taking existing products and raising their prices, but by creating technology and products that provide clear value to customers and continuing to improve them. We fuel growth by offering more and better products so customers are using more of our entire portfolio of technology products, rather than just one or two. By delivering long-term value to customers and investing in improved, customer-focused R&D, we can innovate, scale and offer better products without raising prices.

VMware develops technology for the future and addresses a growing market. The Broadcom business case for this transaction is premised on focusing on the business model, increasing R&D, and executing so that customers see the value of the full portfolio of innovative product offerings — not on increasing prices. Following the close of the transaction, we will invest in and innovate VMware’s products so we can sell even more of them and grow the VMware business within enterprises, deepening and expanding the footprint instead of potentially raising prices.