If the proposed acquisition of VMware by chip manufacturer Broadcom for $60 billion comes through, experts fear that it may hamper VMware’s innovation.
Others view this as a positive move for Broadcom, considering their eagerness to enter enterprise technology. Both companies have not released any details regarding the deal.
This acquisition is the latest in Broadcom’s buying spree of enterprise tech. In 2016 the company acquired Brocade, a network-switching company for $6 billion, CA technologies, a software development company for $19 billion, and Symantec’s enterprise technology wing for $10 billion.
Experts foresee Broadcom paying a premium for VMware’s shares considering that the word is out and other players may also want a piece of the enterprise technology pie. Prior owner Dell Technologies, Red Hat, IBM, Intel, and Cisco are some other potential buyers who are yet to come forward.
The CEO of Intel, Pat Gelsinger who also served as the CEO of VMware is excited about the proposed transaction. VMware and Intel combine their software and hardware to form a fabric for cloud networking. He also hopes that the deal would lead to innovation.
Expert analysts believe that although Broadcom will gain financially from this deal, VMware’s reputation for innovation might take a hit. This is evident from the state of the other companies acquired by Broadcom.
CIOs are concerned about the future of VMware’s virtualisation and multi-cloud products after the acquisition. Although innovators might not be happy with the acquisitions, Broadcom has ensured shareholder satisfaction.
Social media is divided with some stating this as the best deal and some severely criticising it.