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Components & Peripherals News

VMware-Broadcom Deal: Dell, IBM, Crowdstrike, Nutanix CEOs Explain Opportunity

O’Ryan Johnson

Broadcom’s $61 billion bid for VMware has tech CEOs feeling chatty about what could happen if the gigantic deal makes it through.

The megadeal between Broadcom and VMware has loosened the tongues of tech CEOs who wager if the company that emerges can keep innovation alive, it will hold on to customers despite some churn.

“My gut says they will gain some and they will lose some,” Arvind Krishna, IBM’s chief executive, told CRN last week. “The virtualization world likes those products. Now it’s up to them to keep innovating.”

Since the $61 billion deal was announced in May, several industry analysts, partners and customers have expressed varying degrees of concern. Reseller partners hope VMware’s support and channel environment remains in tact, post close, while customers are concerned about a price hike and for products that don’t fit Broadcom’s revenue goals. Financial analysts meanwhile see the deal more in terms of Broadcom — a serial acquirer — balancing its portfolio between its hardware and software businesses.

To allay concerns, VMware CEO Raghu Raghuram told partners Broadcom is not just buying VMware, it is buying VMware’s strategy for the foreseeable future. But Raghurman has not said whether he or any member of the company’s current leadership will remain post close. He is in line to receive about $50 million by way of a “golden parachute” if he departs. Broadcom CEO Hock Tan and Raghuram have said a combination will give both companies a chance to develop stronger solutions for their customers’ multi-cloud environments.

“Combined with Broadcom’s existing software portfolio, we’ll create a uniquely powerful value proposition to our enterprise customers, one that will enable them to effectively develop, run, manage their applications seamlessly, securely, across from on-prem, private cloud to multi-cloud,” Tan said.

The CEO of Crowdstrike, which competes with VMware’s Carbon Black, sees those customers coming to him.

“We got a lot of customers that have called us (and) said, ‘Hey, I’m concerned about the Carbon Black acquisition. We lived through the Symantec acquisition. We know what’s going to happen.’ Prices are going to go up, service is going to go down,” Kurtz told hundreds of vendors, channel partners and others attending the Best of Breed conference in Atlanta.

The deal has elicited feedback from Dell Technologies CEO Michael Dell, Scale Computing CEO Jeff Ready, Nutanix CEO Rajiv Ramaswami and IBM CEO Arvind Krishna.

Here’s what these tech titans with a combined $178 billion market cap have to say about the biggest tech merger of the year:

 
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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