During an interview with DIGITIMES at the EXPLORE 2024 event, VMware's General Manager for Taiwan and Hong Kong, Barry Chen, discussed the changes following VMware's acquisition by Broadcom and shared insights on the future trend of AI privatization.
Chen noted that each of Broadcom's business units operates independently, and Broadcom encourages these units not to let other divisions' product lines or strategies impede their business expansion opportunities. As a result, VMware's business development has remained largely unchanged, with customers maintaining a consistent attitude.
Post-acquisition shifts
He highlighted two significant changes post-acquisition. First, VMware simplified its product line, which originally included hundreds of different products and tools, now consolidated into a few larger platforms, with VMware Cloud Foundation (VCF) being a key component.
Integrating tools onto a single platform aims to streamline updates and upgrades, preventing technical issues caused by version mismatches, and enhancing service quality. Additionally, the team has refocused its efforts on cloud data centers and AI privatization.
The second change was the shift from a licensing model to a subscription-based model, with pricing standardized based on the number of computing cores. The initial transition to a subscription model sparked strong reactions from customers and the market.
Broadly speaking, this shift aligns with the overall industry trend that has been brewing for years. In the grand scheme of things, VMware was slower to adopt this change.
VMware previously ran both models concurrently to meet diverse customer needs, but following Broadcom's acquisition, the decision was made to transition fully. While the early stages required more communication with customers, they have since come to understand that the subscription model, with pricing based on computing cores, offers better cost management.
Chen acknowledged that these two adjustments were part of VMware's long-term reform plans, but the acquisition by Broadcom accelerated these changes, giving the impression of a more aggressive overhaul. He admitted that Broadcom's operational management has positively impacted VMware.
Next chapter: AI
The broader effects of this acquisition are not yet fully visible. Chen explained that Broadcom's expansion from chip design into software is not limited to VMware, as Broadcom has acquired several software companies in recent years.
While the short-term impact may not be clear, AI will serve as a crucial intersection where Broadcom's hardware and software businesses converge. Particularly in AI privatization, VMware's VCF platform and services, combined with Broadcom's ASICs and networking ICs, provide a comprehensive suite of hardware and software solutions for customers.
Chen further emphasized that the development of AI privatization is becoming a consensus among many enterprises. Keeping data off the cloud goes beyond the protection of critical assets and privacy in terms of operational efficiency and cost.
AI privatization presents a compelling advantage and is poised to become a mainstream trend in the future.
