'Bad news for customers' - VMware partners left with mixed feelings over potential Broadcom deal

VMware partners have spoken to CRN about Broadcom’s potential $60bn acquisition of the cloud computing company

"Interesting" and "bad news for customers" - this is how some VMware partners are feeling about Broadcom's potential $60bn acquisition of the virtualisation vendor.

Multiple reports surfaced on Monday that the two companies are in talks, with an agreement set to be announced "as soon as this week", according to Bloomberg.

If Chipmaker giant Broadcom were to acquire VMware, it would see the company broaden its enterprise software business following its acquisitions of Brocade, CA Technologies and Symantec in 2016, 2018 and 2019 respectively.

Partners of VMware who have spoken to CRN over the potential move have been left with mixed feelings - XMA's chief revenue officer Andy Wright said an agreement would be "interesting" but is not sure how it would impact the UK channel.

He said: "It's an interesting move, but not one that I think will whole heartedly change the direction of VMware. Broadcom own CA Technologies and Symantec already and have a clear strategy to add further software brands to its investment portfolio.

"I am guessing there is not much of a link or many synergies between the various businesses in the portfolio and VMware will continue to operate as a standalone business setting its own path. Interesting story but not sure it impacts the UK channel, positively or negatively, in the short to medium term."

Broadcom's $10.7bn (£8.3bn) acquisition of Symantec sparked some concern from the channel.

At the time, partners expressed fears over rumours that Broadcom planned to take Symantec's top 1,500 customers direct, while disties told sister publication Channel Partner Insight that they were concerned over Broadcom's silence over its channel strategy after buying Symantec.

Wanstor CTO Richard Kuczma felt the company looking to acquire VMware is "bad news" for VMware customers, believing that there could be "less investment in R&D going forward".

He said: "VMware have got an absolutely huge customer base. They're probably the right customer base that Broadcom wants to target. But, whether it's going to do anything for existing VMware customers, no, I think you're probably going to see the product ends up getting dragged down and becoming less useful over time."

However, Kuczma felt the move could be "positive" if they invest in it and grow services and capability.

Asked what message he would send to Broadcom over the acquisition, he said: "I would say maintain and accelerate the spend on developing new IP. So, invest more in R&D. VMware is a great platform, but it needs that investment to continue to evolve.

"If the investment plan's there, if they're acquiring it to invest in it and grow the services and capability then it could be a positive. Broadcom has got very broad shoulders and could be a really good backer."

Meanwhile, distributor Westcoast, which sells VMware products, felt it "makes a lot of sense" for Broadcom to acquire VMware following their previous acquisitions.

MD Alex Tatham said: "They really collected a whole range of pretty enterprise led software businesses, so clearly they've been an acquirer of software assets.

"It makes quite a lot of sense for a chip company to diversify a little."

He also felt the potential deal presents an "opportunity" despite concerns that may be raised by people in the channel.

Tatham added: "I think they will look at these things as also an opportunity to look at how to broaden the range of products that you sell around VMware and around the storage and security focus that you're doing. I think that Broadcom will probably embrace a partner that does that."