Broadcom drops VMware perpetual licences and support

Broadcom’s completion of its $61bn acquisition of VMware has led to major changes to the existing VMware product portfolio, which will see an end to perpetual software licensing contracts.

“The portfolio simplification across all VMware by Broadcom divisions stems from customer and partner feedback over the years telling us our offers and go-to-market are too complex,” Broadcom said.

Along with the end of sale of perpetual licences, the company has also announced it will no longer offer support and subscription (SnS) renewals for perpetual offerings. The company said it’s also introducing a bring-your-own-subscription licence option, providing licence portability to VMware validated hybrid cloud endpoints running VMware Cloud Foundation.

“As part of our transition to subscription and a simplified portfolio, beginning today, we will no longer sell perpetual licences,” it said. “All offerings will continue to be available as subscriptions going forward. Additionally, we are ending the sale of support and subscription renewals for perpetual offerings beginning today.”

During the company’s fourth quarter earnings call earlier this month, CEO Hock Tan confirmed that Broadcom officially intends to divest itself of end-user computing, which will mean it will no longer offer virtual desktop infrastructure products such as VMware Horizon.

Broadcom has cut the price of VMware Cloud Foundation, in a bid to entice customers onto an annual software subscription. VMware Cloud Foundation is positioned as Broadcom’s flagship enterprise-class hybrid cloud offering for customers to run their business critical and modern applications – in a secure, resilient and cost efficient manner.

“To allow more customers to benefit from this solution, we’ve reduced the previous subscription list price by half and added higher support service levels including enhanced support for activating the solution and lifecycle management,” the company said.

It has also introduced a new VMware vSphere Foundation, which, according to Broadcom, delivers a more simplified enterprise-grade workload platform for mid-sized to smaller customers. VMware vSphere Foundation integrates vSphere with what the company describes as “intelligent operations management”. This, according to Broadcom, offers a way for customers to get the best performance, availability and efficiency with greater visibility and insights.

Broadcom said both VMware Cloud Foundation and VMware vSphere Foundation will have optional advanced add-ons. These add-ons, available for both products, cover storage, ransomware and disaster recovery, and application platform services. Application Network and Security offerings are available as add-ons for VMware Cloud Foundation, and the company plans to add more services such as private AI.

In a Computer Weekly blog post discussing Broadcom’s strategy for VMware, Bryan Betts, principal analyst at Freeform Dynamics, said: “Subscriptions rarely cost less than purchases over time, and require buyers to account for them differently.”

In the post, Betts quoted Nutanix CEO Rajiv Ramaswami, who shared his thoughts on previous Broadcom acquisitions: “If you look at its history, Broadcom’s whole business model has been to maximise acquired assets in two to three years,” he said. “That means cutting costs and boosting revenues.”


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Broadcom, VMware deal finalised

The finalisation of the $69 billion deal between Broadcom and VMware, multiple deals by Accenture and the ‘goings on’ at OpenAI dominated the technology scene last month.

  • Xpand IT, an IT managed services company, acquired Premier IT Solutions, an IT support firm.
  • The €2 million investment by Finnfund, a Finnish development financier, in the Fibertime Group.
  • Altron will merge three of its IT businesses next year, with Altron Karabina, Altron Systems Integration and Altron Managed Solutions merged into a new entity called Altron Digital Business. It will be led by former Dimension Data SA VP of sales Craig Stewart.
  • Fitbit is withdrawing from the South African market in line with its parent Google’s decision not to sell consumer hardware products in the country.
  • Mamela Luthuli, founder and CEO of Take Note IT, has been named SA’s IT Personality of the Year at the Institute of Information Technology Professionals South Africa  President’s Awards 2023.
  • The appointments of new CEOs and MDs at Equinix SA, HPE SA, SABC and Semtech (interim).
  • UK-based Development Partners International and Verod Capital have invested in Nigerian telecoms infrastructure company Pan African Towers.
  • MFS Africa has rebranded to Onafriq.

    • Fitbit is withdrawing from the South African market.

  • Orange has decided to withdraw from the process to purchase an up to 45% stake in Ethiopian operator Ethio Telecom.
  • The appointments of new African CEOs, MDs, etc at Liquid C2, MTN and Nutanix.
  • Accenture has acquired a number of companies. These include Innotec Security, a privately held company specialising in cyber security as a service, cyber resilience and cyber risk management; the Shelby Group, a provider of digital procurement and optimisation services; Incapsulate, a digital transformation consulting firm that specialises in Salesforce solutions; and Ocelot Consulting, a cloud consultancy specialising in full-stack development, data engineering, data science and strategy and execution for cloud modernisation. Accenture has also agreed to acquire OnProcess Technology, a provider of supply chain managed services, to help organisations refine processes, improve the way inventory is managed and solve complex service challenges; 6point6, a UK technology consultancy specialising in cloud, data and cyber security; Solnet, an IT services provider with deep technology consulting experience for the New Zealand government and private organisations across multiple industries; Ammagamma, an Italian-based firm that helps companies advance their uses of AI and generative AI technologies; and Rabbit’s Tale, a Thailand-based creative and digital experience agency.
  • Acquia, a digital experience company, bought the Monsido platform, a website accessibility and optimisation service.
  • Adobe purchased Indian generative AI start-up Rephrase.ai.
  • Allegro MicroSystems acquired Crocus Technology, a leader in advanced TMR sensor technology ($420 million).
  • Atlassian bought Loom, a video messaging platform that helps users communicate through instantly shareable videos.
  • Arlington Capital Partners purchased Exostar, whose platform supports exclusive communities within highly regulated industries where companies securely collaborate, share information and operate compliantly.
  • Aviat Networks acquired the Wireless Transport Business of NEC.
  • Bain Capital bought Guidehouse, which has capabilities in management, technology and risk consulting, as well as digital services and business process outsourcing.
  • BlueVoyant, a managed detection and response powerhouse that focuses on securing Microsoft environments, purchased Microsoft government cloud security superstar Conquest Cyber.
  • Colt Technology Services acquired Lumen Technologies’ EMEA business ($1.8 billion).
  • Elastic bought Opster, the creator of AutoOps and other tools used to help users get more out of their Elastic deployments.
  • Flywire purchased StudyLink, a provider of international student admissions, application and agent management software serving universities throughout Australia.
  • FreightWise acquired Kuebix, a provider of transportation management system software.
  • Gilat Satellite Networks bought DataPath, a market leader in trusted communications for the public sector.
  • Indosat Ooredoo Hutchison purchased the customer assets of local fibre network service provider PT MNC Kabel Mediacom (MNC Play).
  • Insight Enterprises acquired SADA, a cloud business and technology consultancy.
  • Kick ICT, a managed IT support and cloud services reseller, bought C2 Software, a Microsoft Dynamics business.
  • Lumentum Holdings purchased Cloud Light Technology, which designs, markets and manufactures advanced optical modules for automotive sensors and data centre interconnect applications ($750 million).
  • The Lumine Group acquired the Synchronoss Messaging & NetworkX business units.
  • Madison Dearborn Partners bought T2S Solutions, a founder-owned company offering research and development, prototyping, engineering, integration and technology products to programmes for various US government agencies.
  • May River Capital purchased RLE Technologies, which offers environmental monitoring equipment for data centres.
  • UK-based Metacompliance acquired German-based training provider Increase Your Skills.
  • MinebeaMitsumi bought Hitachi's power semiconductor business subsidiary, Hitachi Power Semiconductor Device.
  • NTT DATA Business Solutions purchased its London-HQ channel partner Sapphire.
  • NV5 Global acquired Technology Design Services, a provider of technology infrastructure design and consulting services.
  • PagerDuty bought Jeli, whose platform allows users to respond to, manage and analyse incidents in order to build more resilient infrastructure and teams.
  • Palisade Infrastructure purchased Rainier Connect, a provider of local internet and phone services.
  • SilverSun Technologies’ wholly-owned subsidiary, SWK Technologies, has acquired substantially all the business assets of JCS Computer Resource Corporation, a reseller of Sage Software solutions.
  • Snap-on bought Mountz, a developer, manufacturer and marketer of high-precision torque tools, including measurement, calibration and documentation products.
  • SonicWall purchased Solutions Granted (SGI), a managed security service provider.
  • Stellant Systems acquired Comtech’s Power Systems Technology product line.
  • An STG affiliate bought Avid Technology, a technology provider that powers the media and entertainment industry ($1.4 billion).
  • Syz Capital and Saturnus Capital purchased Capture Media, a Swiss digital media and analytics solution provider.
  • The 20 MSP, a managed services provider, acquired Managed IT Systems and Network Technologies of Kansas, two fellow MSPs.
  • Tyler Technologies bought ARInspect, a provider of AI-powered machine learning solutions for public sector field operations; and ResourceX, which provides priority-based budgeting software to the public sector to address key challenges faced in traditional budgeting processes, such as lack of funding and transparency.
  • Washington Harbour Partners purchased Sixgen, a provider of cyber solutions for US national security, intelligence and defence groups, as well as critical commercial industries.
  • Advent International has agreed to acquire myPOS, a UK-based payments company.
  • Alibaba Health Information Technology is to buy the entire stake in AJK Technology Holding from a unit of Alibaba Group Holding ($1.73 billion).
  • The Alibaba Group has scrapped plans to spin-off its cloud business, citing uncertainties created by US export curbs on chips used in AI applications.
  • Alphabet has dissolved its stake in trading app operator Robinhood Markets.
  • Altice has entered into an exclusivity agreement to partner with Morgan Stanley. As part of the deal, Altice France is set to sell a 70% share if its data centre business to Morgan Stanley for €535 million, which will create a new venture named UltraEdge. It will operate 257 data centres and office spaces across France.
  • Apple has filed a legal case contesting decisions taken by the European Commission under its recently introduced Digital Markets Act, according to a post shared by the Court of Justice of the European Union on X.
  • Ardian has agreed to acquire Iceland-based northern European data centre company Verne Global.
  • Ascendent Capital Partners has made a $1.6 billion bid to acquire Chinese-listed IT solutions provider Hollysys Automation.
  • UK-based Ascential will sell its digital commerce and consumer research units to the Omnicom Group (£1.4 billion).
  • Bain Capital is set to acquire government and business consulting firm Guidehouse ($5.3 billion).
  • Blackstone agreed to buy UK-based Civica, a provider of software that helps deliver critical services for citizens all around the world.
  • Broadcom has closed its $69 billion deal to acquire VMware.
  • Brookfield Infrastructure Partners has agreed to purchase all of the assets of Cyxtera ($775 million) as part of the data centre and IT infrastructure company's restructuring under Chapter 11 bankruptcy protection.
  • Blackstone and Vista Equity Partners will acquire Australia's Energy Exemplar, a provider of energy market software.
  • The Carlyle Group is selling its stake in Japanese geospatial technology provider Kokusai Kogyo to telecoms infrastructure company Mirait One and has agreed to acquire a majority stake in German software vendor GBTEC Software.
  • Cellnex and Boldyn Networks have reached an agreement in which Boldyn will buy Cellnex’s private networks business unit.
  • China's state-backed chip investment fund has invested $1.99 billion in a memory chip company called Changxin Xinqiao.
  • ConvergeOne has rebranded itself as C1.
  • Corning has agreed to sell its German laser-technology business to China’s Suzhou Delphi Laser.
  • BPEA EQT Mid-Market Growth Fund has agreed to buy a majority stake in HRBrain from existing shareholders. The company's founder, Hiroki Hori, will remain as a significant minority shareholder and continue as CEO.
  • An EU tribunal made legal errors when it ruled in favour of Apple over a €13 billion tax order and should review the case again, an adviser to Europe's top court has said, in a potential setback for the iPhone maker.
  • HubSpot has entered into a definitive agreement to buy Clearbit, a top B2B data provider.
  • IBM plans to buy Indonesia-based Equine Global, an enterprise resource planning and cloud consulting services firm.
  • iClick Interactive Asia Group has entered into a definitive agreement to merge with TSH Merger Sub, a subsidiary of TSH Investment Holding.
  • Instructure Holdings has signed a definitive agreement to purchase Parchment, which offers a comprehensive academic credential management platform and network.
  • Iron Mountain has entered into a definitive agreement to acquire Regency Technologies, a provider of IT asset disposition services.
  • Jabil will take over the manufacture and sale of Intel’s current Silicon Photonics-based pluggable optical transceiver ("module") product lines and the development of future generations of such modules.
  • KKR has signed an agreement to invest $400 million in the OMS Group, a Malaysian subsea telecommunications cable services provider.
  • L3Harris Technologies has signed a definitive agreement under which an affiliate of TJC will acquire the L3Harris Commercial Aviation Solutions business ($800 million).
  • Lufax Holdings is set to acquire Hong Kong virtual lender Ping An OneConnect Bank from OneConnect Fintech Technology ($119.5 million).
  • Meta Platforms and Snap were given a 1 December deadline by the EU to give more information on how they protect children from illegal and harmful content.
  • Mitsui will take a 12.69% stake in Axiata Group's digital and analytics unit.
  • Oakley Capital Investments has agreed to buy a majority stake in Spanish transport management software provider Alerce.
  • Open Text has reached a definitive agreement to divest its AMC business to Rocket Software ($2.275 billion).
  • Palo Alto Networks has signed an agreement to acquire Dig Security, a cloud data security start-up, and it intends to buy Israeli start-up Talon Cyber Security, a pioneer of enterprise browser technology.
  • Panasonic plans to sell a stake in its automotive systems unit to Apollo Global Management.
  • Proofpoint has reached an agreement to acquire e-mail security company Tessian.
  • GAN has entered into a definitive agreement and plan of merger with Sega Sammy Creation, a wholly-owned subsidiary of Sega Sammy Holdings, an international conglomerate operating in the entertainment, gaming and resorts businesses.
  • Siris has agreed to buy mobile radio system provider BearCom.
  • Tata Electronics has agreed to acquire Wistron India.
  • Telecom Italia agreed to sell its landline network to KKR (€22 billion).
  • Thoma Bravo has agreed to buy corporate communications and compliance services firm EQS Group (€400 million).
  • Vishay Intertechnology will acquire Nexperia’s wafer fabrication facility and operations.
  • Vodafone has agreed to sell its Spanish unit to Zegona Communications, a European telecoms investment firm (€5 billion).
  • The Walt Disney company will acquire a 33% stake in Hulu from Comcast ($8.6 billion).
  • Western Digital plans to break itself up, separating its business making traditional hard drives for computers from its flash-memory business.
  • The 9.98% investment by Onepoint in Atos.
  • The investment by Pamlico Capital in Beck Technology, a software provider for the construction industry.
  • The $82 million investment by several companies, including KQ Capital and SL Capital, in JSSI, a chipmaker.
  • The $100 million investment by several companies, including British Columbia Investment Management Corporation, Microsoft and the UK government's National Security Strategic Investment Fund in Photonic, a quantum computing start-up.
  • The $299 million investment by Success Flow International Investment and Choice Faith Group Holdings in VNET Group, a carrier and cloud-neutral internet data centre services provider in China.
  • The $75 million investment led by Brighton Park Capital in LucidLink, a provider of storage technology that allows real-time collaboration primarily for the media and entertainment industry and other heavy data users.
  • The $230 million investment led by Hexagon in Divergent Technologies, a start-up creating digital manufacturing tools.
  • The $500 million investment led by Innovation Park Artificial Intelligence, Bosch Ventures and Schwarz Group in Aleph Alpha, a German generative AI company.
  • The $102.5 million investment led by Kleiner Perkins in Together AI, which offers a platform for developing AI applications.
  • The $120 million investment led by Lightspeed Venture Partners in Enable, a start-up that sells rebate software to trading partners.
  • The appointments of new CEOs at 2U, Alaska Communications, ASML, ATN International, BlackBerry (Interim), Blue Mantis, Bumble, Coupa, Datalex, Ernst & Young, Genpact, KWESST, Lantronix, Logitech, Optus (interim), Proofpoint, Slack, TA Digital and Web Summit.
  • The death of John Ocampo, chairman of MACOM Technology Solutions.
  • IPO filings from SU Group Holdings (Nasdaq), Trident Digital Tech Holdings (Nasdaq) and YY Group Nasdaq).
  • IPOs and listings from Tata Technologies (India) and Will Semiconductor (Switzerland).
    • Research results and predictions
  • According to Counterpoint Research, smartphone shipments in SA grew 73% year-on-year in the third quarter and were up 44% from the previous three months.
  • According to Gartner, worldwide end-user spending on public cloud services is forecast to grow 20.4% to total $678.8 billion in 2024, up from $563.6 billion in 2023.
  • According to IDC, the worldwide AI software market will grow from $64 billion in 2022 to nearly $251 billion in 2027 at a CAGR of 31.4%.
  • According to IDC, worldwide digital transformation spending is forecast to reach nearly $3.9 trillion in 2027, with a five-year compound annual growth rate of 16.1%.
  • According to IDC, worldwide tablet shipments posted a decline of 14.2% year-over-year in 3Q23, totalling 33.2 million units.
  • IDC has upgraded its Semiconductor Market Outlook by calling a bottom and return to growth that accelerates next year. It has raised its September 2023 revenue outlook from $518.8 billion to $526.5 billion in a new forecast. Revenue expectations for 2024 were also raised from $625.9 billion to $632.8 billion, as it believes the US market will remain resilient from a demand standpoint and China will begin recovering by the second half of 2024.
  • According to IDC, worldwide smartphone shipments are forecast to see 7.3% year-over-year growth in the fourth quarter of 2023. The market recovery will continue in 2024, with 3.8% growth expected, followed by low single-digit growth for the rest of the forecast period, resulting in a five-year compound annual growth rate of 1.4%.
  • According to the Semiconductor Industry Association, worldwide sales of semiconductors for the third quarter of 2023 totalled $134.7 billion, up 6.3% sequentially but down 4.5% on year.
  • According to the World Semiconductor Trade Statistics, semiconductor sales were somewhat higher than expected in the second and third quarters, prompting it to revise its forecast for a 9.4% drop in 2023 but an anticipated growth of 13.1% in 2024.
  • JSE All share index: Up 9%
  • FTSE100: Up 3.3%
  • DAX: Up 11.6%
  • NYSE (Dow): Up 1.8%
  • S&P 500: Up 11.6%
  • Nasdaq: Up 13.1%
  • Nikkei225: Up 7.9%
  • Hang Seng: Down 3.3%
  • Shanghai: Up 0.5%

    • As this is my final column, I have listed a few key developments to watch over the coming months. They are, in no specific order:

  • The finalisation or otherwise of the Cisco/Splunk deal.
  • Changes and realignments as a result of the ongoing China/US semiconductor ‘wars’.
  • Developments and possible legislation in the AI field.
  • A possible takeover of Disney, maybe by Apple.
  • A possible IPO by Ingram Micro.
  • Possible break-ups of parts of Amazon, Meta, Microsoft and Alphabet.

    		•   


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