In the fast-paced world of enterprise IT infrastructure, few names have carried as much weight as VMware. As a pioneer in virtualization, cloud computing, and software-defined data centers, VMware has long been a key player in digital transformation. In 2023, a significant shift occurred when Broadcom, a global semiconductor and infrastructure software giant, completed its high-profile acquisition of VMware.

This blog explores the journey of VMware, the details of its acquisition by Broadcom, and what this major move means for the future of enterprise IT.

A Brief History of VMware

Founded in 1998, VMware revolutionized enterprise computing by introducing virtual machines (VMs) that allowed multiple operating systems to run on a single physical server. This breakthrough drastically improved server efficiency, flexibility, and scalability for businesses around the world.

Key highlights:

• 2004: Acquired by EMC Corporation.

• 2016: Became part of Dell Technologies after Dell’s acquisition of EMC.

• 2021: Spun off from Dell to become an independent publicly traded company again.

VMware’s portfolio expanded over the years to include:

• vSphere (virtualization)

• NSX (network virtualization)

• vSAN (storage virtualization)

• Tanzu (Kubernetes platform)

• CloudHealth (multi-cloud management)

Broadcom’s Strategic Acquisition

In a landmark deal worth approximately $69 billion, Broadcom Inc. announced its intention to acquire VMware in May 2022, and the acquisition was officially completed on November 22, 2023.

Why Did Broadcom Acquire VMware?

Broadcom has been on a mission to diversify its revenue beyond semiconductors by investing in enterprise software. Previous acquisitions include:

• CA Technologies (mainframe software) in 2018

• Symantec Enterprise Security in 2019

By acquiring VMware, Broadcom aims to:

• Gain a strong foothold in the enterprise software market

• Expand recurring revenue through software subscriptions

• Leverage VMware’s leadership in hybrid cloud and multi-cloud infrastructures

What Changes with the Acquisition?

After the acquisition:

• VMware is now a part of Broadcom Software Group.

• Broadcom discontinued the perpetual licensing model, moving VMware products to subscription-only licensing.

• Significant organizational restructuring occurred, including job reductions and streamlining of channel partnerships.

• Some standalone VMware products and offerings are being restructured or phased out in favor of integrated solutions.

Broadcom’s CEO Hock Tan emphasized a focus on “customer value and profitability,” which suggests more emphasis on enterprise-level, long-term contracts.

Concerns and Reactions

The acquisition sparked mixed reactions across the tech industry:

Concerns:

• Customers worried about price increases, reduced product flexibility, and potential support limitations.

• Partners expressed concerns about reduced access to licensing and product tiers, especially for small-to-mid-sized businesses.

Positive Outlooks:

• Some analysts believe Broadcom’s scale and operational efficiency could strengthen VMware’s long-term product innovation.

• A renewed focus on core enterprise customers could bring deeper integration and better support for large-scale deployments.

The Future of VMware under Broadcom

As VMware continues its journey under Broadcom’s umbrella, we can expect:

• Continued investment in multi-cloud infrastructure and modern application platforms

• Tighter integration with Broadcom’s security and infrastructure software stack

• A strong push toward enterprise licensing models and long-term subscriptions

• Evolution of flagship products like vSphere, Tanzu, and NSX in line with Broadcom’s enterprise strategy

For current VMware customers, it's essential to evaluate licensing models, assess cloud migration paths, and stay informed about product roadmap updates.

Conclusion

The Broadcom–VMware deal represents one of the most impactful technology mergers in recent years. It marks a shift not only in ownership but also in strategic direction and go-to-market approach. Whether this new phase benefits the broader IT ecosystem remains to be seen, but what is certain is that VMware’s legacy and technology leadership are here to stay, now under a new playbook.