Technology
Broadcom Advances Software Strategy with VMware
Broadcom is focusing on data sovereignty with the VMware acquisition and is drastically reducing the product offering despite customer protests.

Broadcom positions itself with the $69 billion acquisition of VMware as an alternative to the dominant US cloud providers. CEO Hock Tan has drastically streamlined the portfolio and increasingly focuses on customers who do not want to fully hand over their data to providers like Amazon Web Services or Microsoft.
After acquiring VMware in 2023, Broadcom reduced the number of offered products from several thousand to just five bundles. This initially met resistance from customers who criticized rising costs due to the switch to annual subscriptions. But Tan remains convinced: "We wanted to make VMware simpler and more efficient - maybe four products were too few, but 8,000 are definitely too many.
Especially in Europe, Tan sees great potential for VMware as companies and governments increasingly value data sovereignty and privacy. Regulatory interventions and stricter data protection laws have significantly increased the demand for "sovereign" data centers that store sensitive information locally. "Especially in Europe, VMware is a serious alternative to the public cloud," says Tan.
Despite criticism of the new licensing policy, which led to a lawsuit from AT&T and allegations of drastic price increases, Tan remains committed to the strategic realignment. He views the protests as isolated cases: "Many customers forget that they used to pay one-time license fees and were able to amortize the costs over years.
In addition to VMware, Broadcom is also relying on its semiconductor division, which has grown massively through customized AI chips for tech giants like Google and Meta. This drove the company's market capitalization over one trillion dollars for the first time.
Tan also signals willingness for further acquisitions, both in the chip and software sectors. Despite the failed $142 billion offer for Qualcomm in 2017 – which was blocked by the Trump administration – Broadcom continues to look globally. "The US is only part of the market. We operate worldwide," emphasizes Tan.