UPDATED 10:02 EDT / JUNE 24 2024

Dave Vellante and John Furrier discuss the ongoing reaction to the Broadcom VMware acquisition on the latest episode of theCUBE Podcast on June 21, 2024. AI

On theCUBE Pod: The ongoing reaction to the Broadcom VMware acquisition and Nvidia’s unbelievable growth

There has been plenty of analysis around how VMware Inc. customers might respond in the wake of Broadcom Inc.’s $61 billion acquisition of the company. The continued unfolding reaction to the Broadcom VMware acquisition was one of the subjects of conversation for theCUBE Research industry analysts John Furrier and Dave Vellante to dive into on the latest episode of the CUBE podcast.

“There was a narrative at HPE [Discover]: The backchannels at HPE were like, ‘We don’t want to poke the Broadcom bear, but we have a lot of customers that are upset,’” said Vellante (pictured, right).

That’s often the narrative, but there’s another perspective at play around the Broadcom VMware acquisition.

“Broadcom’s doing exactly what they said they were going to do back when they announced they were buying them in 2022. [Broadcom CEO] Hock Tan laid out the rationale,” Vellante said. “They basically said, ‘We’re going to use the same playbook. We’re going to focus the company. We’re going to narrow to the top customers. We’re going to invest in R&D.’”

During MWC Barcelona, Broadcom President Charlie Kawwas explained that from the semiconductor perspective when he spoke to theCUBE. The roadmap around the Broadcom VMware acquisition was all telegraphed, according to Vellante.

“They did away with the ELA, the enterprise license agreement, [which is] like an all-you-can-eat. They said, ‘We’re not doing that anymore.’ So, now there’s all these stranded licenses that people are going to have to pay for,” Vellante said. “They said, we’re no longer going to sell vSAN and NSX, and all this stuff is separate. But we’re going to have one SKU.”

Broadcom VMware acquisition leaves behind various challenges

With its strategy in tow, VMware began to target its top customers. But that comes with various “craplications,” when one does not need the full suite, according to Vellante.

“Well fine, there’s some options there. HPE was basically saying, ‘We’ll help you identify your licenses.’ You don’t want to pay for, for instance, Oracle licenses that are orphaned or Salesforce licenses that are orphaned,” he said. “It can get really expensive. So, we’ll help you find those and optimize that.”

The second thing HPE said it would help with was private cloud and GreenLake. That could involve a variety of options, according to Vellante.

“We’ll help you scale up, scale down, burst up, burst down, burn up, burn down, whatever,” he said. “Third thing is for those craplications, if you don’t want to pay VMware — because of Broadcom, because they’re charging you too much, fine, we’ll help you — HPE’s got their own virtualization solution, Red Hat, Nutanix, KVM, there’s a lot of options.”

Hock Tan is very much a pragmatic person, according to Furrier. But insiders at VMware also noted another quality.

“I’ve talked to probably over two dozen different executives, and people within the realm of Hock Tan … they say he listens,” said Furrier (left).

Most CEOs are very dogmatic, according to Furrier. But Tan is willing to listen on issues he may at first hold a different view on.

“Private AI, he wasn’t too high on it apparently, from what I heard. And Chris Wolf had a long chat with him, because they had baked that out years ago,” Furrier said. “Remember, they were the first ones to come out with private AI, and everyone’s throwing tomatoes … and it actually was right. Now everyone’s talking about AI factories, AI private cloud.”

Nvidia’s massive growth continues

Last week, Nvidia Corp. surpassed Microsoft Corp. to become the most valuable publicly traded company in the world. Though possibly no one knew them outside of gaming and crypto circles before, the company has successfully captured the attention of the mainstream, according to Furrier.

“Unbelievable growth. To think they just beat Apple, and Amazon’s in the rearview mirror on these guys,” Furrier said. “It’s really Microsoft and Apple and Nvidia, and then the fall of Intel. So, it’s almost a supersonic ride. Will it survive?”

The rumor in Silicon Valley is that everyone is selling their stock given their massive gains, according to Furrier. That begs the question: Will that topple the company?

“Will their success be their failure? Sometimes, success can cause problems. We’ll see how they handle it. I don’t think there’s going to be a problem, but you’ve got to keep an eye on that,” Furrier said. “That’s what some people are talking about.”

Watch the full podcast below to find out why these industry pros were mentioned:

George Gilbert, principal analyst at theCUBE Research
Peter Thiel, chairman, founder and former CEO of PayPal
Dave Duggal, founder and CEO of EnterpriseWeb
Mark Terenzoni, GM of security services at AWS
Chris Lynch, executive chairman and CEO of Atscale
Charlie Kawwas, president at Broadcom
Hock Tan, president and CEO of Broadcom
Chris Wolf, global head of AI and advanced services at VMware by Broadcom
Krish Prasad, SVP and GM of the VMware Cloud Foundation Division at Broadcom
Michael Dell, chairman and CEO at Dell Technologies
Rob Strechay, managing director and principal analyst at theCUBE Research
David Floyer, analyst emeritus at theCUBE Research
Jensen Huang, founder and CEO of Nvidia
Antonio Neri, president and CEO of HPE
Neil MacDonald, EVP and GM of the compute business units at HPE
Jerry Chen, general partner at Greylock Partners
Venkat Rajaji, SVP of product management at Cloudera
Ali Ghodsi, co-founder and CEO of Databricks
Mark Zuckerberg, CEO of Meta Platforms
Lina Khan, chair of the FTC
Sanjeev Mohan, principal at SanjMo
Donald Trump, 45th president of the U.S.

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