Broadcom CEO: $2 billion for VMware R&D to speed product, service development

Broadcom said it will spend $2 billion a year to accelerate research and development for VMware products and services.

In making the investment assurance, Broadcom CEO Hock Tan wrote in a blog post: “By extending our multi-cloud strategy, we will invest in extending VMware’s software stack to run and manage workloads across private and public clouds, which means any enterprise can run application workloads easily, securely, and seamlessly on-prem, or in any cloud platform they prefer.”

“If companies can run VMware as a private cloud on-prem, they should be able to take their same application workloads to the public cloud without needing to re-engineer that application or worry about being locked into the public cloud providers that they choose,” Tan stated.

With the right combination of compute, storage, and network virtualization technology, enterprises can build next-generation, software-defined data centers of their own, on their premises or in private clouds, instead of being largely or exclusively dependent on a mixed cloud environment, according to Tan.

“Virtualization of all these functions gives enterprises the ability to manage parts of the data center more easily in on-prem, private cloud environments similar to the productivity, efficiency, ease of use, resiliency and elasticity that enterprises enjoy with public clouds,” Tan stated. “Broadcom will make additional investments to help this technology work together seamlessly and much easier to use; and resources to help more customers adopt and deploy this great technology.”

The increased investment will also be focused on building VMware’s professional services capabilities.

“This means an investment in professional services support and in external partners,” Tan wrote. “VMware needs more partners to grow, and we will help it succeed in doing so.”

“As a part of Broadcom, VMware will have more resources and scale to support the number of customers that want its technology and services, and help customers deploy it more than it was able to as a standalone company. Together with Broadcom, VMware will be able to partner with global system integrators and double the investment in professional services,” Tan stated.

Since announcing its intention to buy VMware for $61 billion last year, Broadcom has been wrangling with regulators, primarily in Europe, about the competitive impact of the takeover.

The European Commission recently informed Broadcom of its objections to the company’s proposed acquisition of VMware. 

“Broadcom is the leading supplier of Fiber Channel host bus adapters (FC HBAs) and storage adapters. The markets are very concentrated. If the competitors of Broadcom are hampered in their ability to compete in these markets, this could in turn lead to higher prices, lower quality and less innovation for business customers, and ultimately consumers,” the Commission said in a statement.

Having carried out an in-depth investigation, the Commission said it remained concerned that Broadcom may restrict competition in the global markets for the supply of FC HBAs and storage adapters by “foreclosing competitors’ hardware” by “delaying or degrading” their access to VMware’s server virtualization software.

This week Tan appeared at a hearing in Brussels with senior European Commission officials and their counterparts from national competition agencies. He was expected to tell regulators, in part, that they should consider the presence of Amazon, Microsoft and Google in the cloud computing market as proof of strong competition, according to a Reuters report.

Broadcom is expected to offer remedies soon after the hearing. The EU deadline for a decision is June 21, which will be extended once concessions are submitted, Reuters reported.