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VMware CEO: Renew Now To Fight Broadcom Price Hike Worries

O’Ryan Johnson

‘For customers that are worried that Broadcom will come in and raise prices post close, there’s plenty of time. There are customers who have said, I want to come in and do an early engagement with VMware, do an early renewal, and we are doing that all day long,’ VMware CEO Raghu Raghuram says.

With a $61 billion deal in play, and several skeptical reseller partners in the audience, VMware CEO Raghu Raghuram sat down on stage at the Best of Breed conference this week in Atlanta, and for 37 minutes he tried to win them over.

“Thanks to all the partners here,” Raghurman started off. “I’m pretty sure most of you are also VMware partners. Thanks for all the collaboration over the years, and helping our joint customers.”

Unflappable throughout, Raghuram tackled the merger with Broadcom; what partners can expect after the deal closes; what “amazed” him about Broadcom CEO Hock Tan; where VMware competitors fall short; why VMware partners with them regardless; and the best way to approach the concern about Broadcom raising prices: renew early.

[RELATED: IBM CEO Arvind Krishna Says Partners Should Raise Prices, Weighs In On Broadcom-VMware Deal]

After the show, one partner said while his organization still has reservations about Broadcom, as a company, Raghuram’s commitment to the channel was evident.

“It was good,” said the partner who has been a VMware partner for “about a decade.”

“The concern is not necessarily around what we know about VMware. It’s more about what we don’t know about Broadcom,” said the partner who asked not to be identified. “It was good to hear from Raghu. It did make me feel better. I think the answers we really want are going to have to wait until we get a few quarters into Broadcom’s ownership. That will tell us a lot.”

Broadcom and VMware announced a merger agreement on May 26. The two companies negotiated about 20 days before agreeing to a purchase price of $142.50 per share of VMware stock. Broadcom said the FTC is taking a “second request” look at the merger, which blocks the deal from being finished until the government’s investigation is satisfied.

Since the announcement VMware resellers have voiced alarm over how Broadcom has treated channel partners in the past. Broadcom said it has learned from those transactions and intends to “embrace the channel.” The deal would enrich VMware leadership by $169 million, with Raghuram taking the lion’s share of that as his “golden parachute” was estimated by Broadcom to be $52.5 million.

Broadcom said the deal is expected to close by October 2023. Here is what VMware’s CEO told partners at The Channel Company’s Best of Breed (BoB) conference in Atlanta:

 
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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