VMware, the cloud computing software program outfit led by Intel’s present CEO Pat Gelsinger until a number of years in the past, is the following acquisition goal of Broadcom, referred to as a extremely acquisitive firm within the semiconductor trade. On the outset, it appears one other bid to align Broadcom to the software program facet of the quickly rising information middle enterprise.
It’s Broadcom’s third main acquisition of a software program firm; it purchased CA Applied sciences for $18.9 billion in 2018 and the safety division of Symantec for $10.7 billion in 2019. Final 12 months, the chipmaker additionally got here shut to purchasing analytics software program developer SAS Institute. The VMware deal marks Broadcom’s subsequent foray into enterprise software program.
VMware, which spun out of Dell Applied sciences in November 2021, develops virtualization software program to make computing extra environment friendly and affords a variety of software program merchandise for the hybrid cloud market. However, Broadcom is focusing its silicon choices on connectivity, safety, and mission-critical operations. And that sits effectively in creating synergy with VMware’s multi-cloud technique.
What’s additionally frequent between these two firms is that they’re each beneficiaries of the exploding information middle market. Presently, Broadcom is a $222 billion firm, whereas VMware has practically $40 billion market valuation. Nevertheless, in accordance with trade reviews, the deal might be price $50 billion, probably reworking Broadcom right into a extra diversified tech large.
It’s nonetheless unclear how Broadcom truly plans to create a synergy between its semiconductor enterprise and VMware’s software program choices. Furthermore, the phrases of the deal are nonetheless unknown, and in accordance with some trade sources, negotiations between the 2 firms are ongoing, and a deal is just not imminent.
In accordance with some trade observers, which will set off a bidding warfare within the coming days. Moreover, it might probably enhance VMware’s inventory worth, which has taken a dip recently.
Majeed Ahmad, editor-in-chief of EDN and Planet Analog, has lined the electronics design trade for greater than 20 years.
Associated Content material
