Sophos CEO: Broadcom Is Repeating Same Mistakes With VMware That It Made With Symantec

Kris Hagerman says his security firm is picking up some business due to customers’ concerns over the proposed Broadcom-VMware merger.


Sophos chief executive Kris Hagerman says his British security company is picking up new business from VMware customers nervous about Broadcom’s proposed $61 billion takeover of VMware.

In a recent interview with CRN, Hagerman said Broadcom, the semiconductor heavyweight now branching out into other tech fields, appears to be following the same customer and channel strategies with VMware that it used after its often-criticized takeover of Symantec’s enterprise business for more $10.7 billion in 2019.

Asked by CRN during a recent interview whether he saw an opportunity for Sophos to nab some VMware customers and partners due to the proposed merger, which includes the VMware Carbon Black security solutions, Hagerman replied, “Well, of course.”

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He added: “The reality is we saw the same thing with Broadcom’s acquisition of Symantec. And I think this is a stated strategy of a Broadcom. That they really only focus on their top 500 to 1,000 customers. And as a result, they essentially step back almost entirely from the channel — and you’ve seen that in spades with Symantec and the acquisition of Symantec.”

He said smaller customers will be impacted along with partners as a result of any merger.

“They (at Broadcom) also essentially step back from almost all of their customers if they’re not in the top 500 or 1.000. And, as a result, it ends up opening up opportunities for all sorts of other vendors, including Sophos.”

Asked what VMware customers and partners were telling Sophos, Hagerman said: “They’re saying exactly the same thing that all those Symantec customers and partners said. There’s just exactly the same movie playing over. It’s literally the same game plan being applied to a new acquisition.”

He added: “So all those partners and customers, they just say, ‘OK, yeah, it‘s very obvious what’s going to happen. The same thing that happened with the Symantec products and partners and customers. The same thing is going to happen with VMware and the same thing is going to happen with the Carbon Black component underneath VMware.’”

Hagerman is not the only tech CEO to say that VMware customers and partners are reaching out to other vendors following Broadcom’s announcement last spring that it planned to buy VMWare.

At The Channel Company’s Best of Breed conference in Atlanta earlier this year, CrowdStrike chief executive George Kurtz said his cybersecurity company is fielding inquiries from a number of VMware customers concerned about the proposed Broadcom-VMware merger.

Since last spring’s merger announcement, Broadcom and VMware officials have aggressively pushed back at the notion that a VMware takeover will merely be a repeat of the budget cuts and price increases that happened after past Broadcom acquisitions.

Asked by CRN for a response to Hagerman’s comments, a Broadcom spokesman pointed to two recent posts, one on Wednesday and the other last month, by Broadcom president and CEO Hock Tan.

In his post earlier this week, Tan addressed frequently expressed fears that Broadcom plans to raise prices for VMware products after the proposed merger goes through, assuming it gets final regulatory approvals.

“I’ve continued to see questions in press reports about whether we intend to raise prices on VMware products. The answer is simple: No,” Tan said in his post.

He also asserted that all customers will be treated fairly.

“Following the transaction’s close, we’re going to focus on making VMware’s products better for all of our customers, including enterprise customers who want products that are even easier to use. And, to be clear, we intend to continue serving customers of all sizes,” he said in the Nov. 30 post.

Tan added: “VMware has a robust partner ecosystem that we will build upon to help us serve even the smallest companies. In short, we plan to take a ‘no customer left behind’ approach.”

Worth Davis, senior vice president at Calian IT & Cyber Solutions, an Ottawa, Ontario-based solutions provider, said most partners assume VMware products will cost more after a merger with Broadcom.

“They know what’s coming. They know prices will increase,” he said.

Davis, whose firm is a VMware partner, said many customers and partners may talk about switching to new vendors, but he said it’s easier said than done. “It’s difficult to get out of a technical architecture decision.”

He said he’s not abandoning VMware products because they offer “critical technology.”

He added he wouldn’t be surprised if Broadcom ended up focusing on VMware’s top 500 to 1,000 customers. “It’s something everyone does,” he said.