According to some rumors Broadcomthe semiconductor giant, would be working to acquire VMware. Clearly the source has remained anonymous, but if he had really reported the truth then it is clear that we could be faced with a perfect fusion of the hardware and software sector.
Broadcom and VMware: acquisition possible?
Broadcom is in talks to acquire VMware, the cloud computing company backed by billionaire Michael Dell. In reality, for now we are only talking about ongoing negotiations, which does not mean there will be a definitive agreement. But if that were the case, the VMware acquisition would rank among the largest acquisitions ever of a technology company. And this well explains the aura of mystery that surrounds the question. Currently, VMware has a market valuation of about 40 billion dollars, a figure Broadcom could afford to expand its software acquisitions. Not surprisingly, in 2018 the company acquired CA Technologies, and in 2019 it took over the security business of Symantec Corp.
Everything would therefore suggest that Broadcom’s intent is to proceed with the acquisition. Just a few months ago Hock Tan, CEO of the company, said it had the capacity for a “good size” acquisition. And VMware might be the right choice. “A VMware acquisition would be considered strategic; consistent with Broadcom’s focus on building an in-depth software strategy for corporate infrastructure, ”analysts commented. On the other hand, even if Broadcom is already to be considered a semiconductor giant – so much so that it supplies companies like Apple – it is clear that it is also aiming to expand in the software sector. In this regard, it should be remembered that the company was already in talks to acquire SAS Institute Inc. A deal that went up in smoke, which left Tan with the desire to complete an acquisition in the sector.
VMware could then represent the achievement of an important goal. Thus allowing Broadcom to become more independent of the chip industry, although this market has given him a lot of satisfaction during the year. Yet Tan appears to be convinced that the semiconductor industry will not be able to stay on its current expansion trajectory. Indeed, the CEO believes the chip business will decelerate to historic growth rates of around 5%. “If someone tells you otherwise, don’t believe it, because it never happened,” he said recently. At this point, it’s best to launch into the software market with a Broadcom-VMware merger.