Broadcom has sold VMware's End-User Computing (EUC) Division to KKR for an estimated US$4 billion, including Horizon and Workspace One. (Getty Images)
Broadcom's ongoing dismantling of VMware took another step today with the announcement of the sale of its End-User Computing (EUC) Division to global investment firm KKR for an estimated US$4 billion. This sale includes Horizon, a platform for desktop and application virtualization, and Workspace One, a unified endpoint management platform for enterprises.
The decision to divest these units was not unexpected, as Broadcom CEO Hok Tan had previously mentioned plans to do so during the company's Q4 2023 earnings call in December. Forrester Research, in an advisory issued earlier, noted that both EUC and Carbon Black, another unit yet to be sold, represent a small portion of VMware's overall business. The sale is expected to increase the independence of both companies, potentially leading to increased brand awareness and R&D funding.
Shankar Iyer, Senior Vice President and General Manager of the EUC Division, described the acquisition as an "exciting new era" for the organization and its customers. He emphasized that the EUC Division would continue to be led by its existing management team after the transaction closes, which is expected later this year.
However, the transition is not without challenges. Broadcom's decision to terminate its VMware Partner Program as of February 5 has led to frustration among partners and customers. Scale Computing, a company specializing in edge computing and virtualization services, has reached out to partners affected by the change, offering a 25% discount on its software and services as part of a VMware Rip and Replace Promotion.
The changes by Broadcom have also led to concerns about potential cost increases for customers, as VMware products will soon be sold on subscription and offered only in product bundles. Jeff Ready, CEO of Scale Computing, expressed concern about Broadcom's focus on its top 600 customers, potentially leaving others at a disadvantage.
Broadcom's response to a children's hospital facing a significant price increase for its VMware license renewal was also criticized. The hospital's partner reached out to Broadcom and VMware representatives to discuss the situation, but the response was deemed unsatisfactory.
In conclusion, while the sale of VMware's EUC Division to KKR represents a significant development, it also highlights the challenges faced by partners and customers in the wake of Broadcom's decisions. The transition to a new channel program and potential cost increases for customers underscore the need for careful planning and consideration in the evolving landscape of enterprise technology.
