Broadcom’s VMware Acquisition: 5 Key Customer And Cost Figures To Know
From what each company spends on sales, marketing and administrative costs to R&D spending, here’s five comparable figures that all channel partners, investors and customers should know as Broadcom seeks to buy VMware for $61 billion.
Broadcom’s $61 Billion Acquisition Of VMware: 5 Customer, R&D And Sales Figures
VMware and Broadcom operate very differently in terms of marketing, sales and administrative costs, as well as how much spending goes towards research and development.
While VMware spends roughly two-thirds of its total revenue on R&D, marketing, sales and administrative costs, Broadcom spends only a fraction of that on those operational expenses. This is leading many to speculate that operational cost cut measures will occur at VMware if Broadcom completes its blockbuster $61 billion acquisition of VMware later this year.
In fact, Broadcom said it hopes to increase VMware’s profitability from $4.7 billion in fiscal year 2022 to $8.5 billion within the next few years, in part, by “eliminating duplicative general and administration functions across human resources, finance, legal, facilities and information technology.”
However, in a letter sent to VMware employees from Broadcom CEO Hock Tan and Tom Krause, president of Broadcom’s software group, the executives touted VMware’s software leadership.
“By bringing an iconic pioneer like VMware into the Broadcom family, we will be able to reimagine what we can deliver to our customers,” said Tan and Krause in a May 26 letter to VMware employees. “We’ve long admired VMware for your enterprise software leadership. In fact, one of the reasons why we became interested in this transaction was because of your world-class team, known for engineering prowess and strong customer and partner relationships. Like VMware, Broadcom has an engineering-first, innovation-centric culture.”
San Jose, Calif.-based Broadcom shook up the software world last week when it announced its intent to acquire VMware, based in Palo Alto, Calif., for $61 billion.
Broadcom has approximately 20,000 employees worldwide, while VMware has over 35,000 employees. If completed, Broadcom’s software group will rebrand and operate as VMware, which will incorporate Broadcom’s existing infrastructure and security software solutions.
CRN takes a look at VMware and Broadcom’s most recent financial earnings reports and other figures to see the difference between how both companies operate from a sales, customer and operational standpoint. VMware’s first fiscal quarter 2023 ended April 29, 2022, while Broadcom’s second fiscal quarter 2022 ended May 1, 2022.
Here are five key data points and figures that customers, investors and channel partners should know.