Nutanix CEO On ‘Areas Of Concern’ In VMware-Broadcom Deal For Customers And Partners
Nutanix CEO and former VMware top executive Rajiv Ramaswami explains why VMware partners and customers should be concerned about the future of VMware after Broadcom completes its planned acquisition of the virtualization tech developer, likely later this month.
Ramaswami worked in top executive positions at both VMware and Broadcom before taking over the reins at hyperconverged software and hybrid cloud superstar Nutanix in 2020. He said he knows what happens when Broadcom acquires a company.
“Customers are not necessarily very happy. They typically will see pricing going up, roadmaps potentially getting shrunk, some products being divested, and support levels potentially coming down,” said Ramaswami in a Q&A session at the 2023 XChange Best of Breed conference. “VMware, of course, is being used for mission critical workloads by many customers. These are areas of concern [for customers].”
Ramaswami, who worked at Broadcom until it was acquired by Avago in 2016, said the company’s acquisition “playbook” has been consistent for years, such as with Broadcom’s previous purchases of CA Technologies and Symantec.
“The playbook for VMware is going to be very consistent as well: focus on the top customers. In the case of VMware they said, maybe around 1,500 to 2,000 customers,” he said. “They’re going to focus on optimizing costs quite a bit.”
“All the 2,000 customers at the top, Broadcom can take direct. And they have, in the past, taken them direct,” said Ramaswami. “So channel partners may not have a role in those companies.”
Broadcom’s Pending Acquisition Of VMware
In May 2022, San Jose, Calif.-based Broadcom unveiled its plan to acquire Palo Alto, Calif.-based VMware for $61 billion. At the time, the companies had a combined 55,000 employees and a market capitalization of $267 billion. The planned acquisition stalled on several occasions over the past 18 months as the companies sought regulatory approvals.
However, Broadcom expects to officially close its purchase of VMware on Oct. 30, 2023.
“[Customer] options are: stick with VMware, which some of them will probably do; go to the public cloud, which of course they’re trying—it’s not so easy just to migrate overnight to the public cloud—or look at an alternative like Nutanix, where we’ve had a long history of working with customers and converting them over,” said Nutanix’s CEO, who was previously chief operating officer of Products and Cloud Services at VMware.
In an interview with CRN, Ramaswami explains how VMware partners could lose customers once the deal closes, Nutanix’s gameplan to capturing concerned VMware customers, and how Nutanix partners can make money by winning over VMware customers.