Acquisition of VMware by Broadcom will be closely watched by NetApp’s customers
The planned $61 billion acquisition of VMware Inc. by Broadcom Inc. will be one of the most closely followed technology stories in 2023. Regulators have lined up to scrutinize the deal announced in May, analysts have predicted a more focused portfolio, and customers have been fretting over the prospect of higher prices.
It is the kind of industry-shifting acquisition that will have ripple effects across broad swaths of the tech world, including major players such as NetApp Inc., a reseller partner of VMware.
“Time will tell, but overall, I think it will be good for the ecosystem in the end,” said Phil Brotherton (pictured), vice president of solutions and alliances at NetApp. “There’s a lot you can do when you start combining what VMware can do with compute with some of the hardware assets of Broadcom. There’s a lot of upside for it, and there’s obviously a lot of concern about what it means for vendor consolidation and pricing.”
Brotherton spoke with theCUBE industry analyst Dave Vellante as part of the “NetApp’s View on Broadcom’s Acquisition of VMware” event, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed the acquisition and NetApp’s extensive partnership with VMware. (* Disclosure below.)
The combination of VMware with Broadcom is understandable from a platform standpoint. VMware, which was spun off from parent company Dell Technologies Inc. in 2021, provides a widely used virtualization platform and software for storage, networking and public cloud infrastructure. Broadcom is a major manufacturer of data center chips, supplying processors for connecting servers to storage devices.
VMware’s publicly stated position is that Broadcom will approach the deal as a “business-driven conversation” with an eye toward driving future value, versus taking a purely numbers-oriented view.
“Broadcom is really getting a sense of what they’ve bought,” said Brotherton, in response to a question on the acquisition’s impact for NetApp. “VMware is going to be in our infrastructure for at least as long as I’m in the computer business. Decades is an easy prediction, and we plan to work with VMware very closely along with our customers as they extend from on-premises to hybrid cloud operations. That’s where I think this will go.”
Before the deal can proceed to closure, it must gain the approval of regulators. The U.S. has been investigating Broadcom’s acquisition of VMware since July and has yet to issue a finding.
Regulators in the European Union and the United Kingdom have announced their own investigations in recent months. The EU has expressed concern that Broadcom’s chips could block hardware rivals from interoperating with VMware’s virtualization software.
It’s unclear whether regulators will be closely analyzing how the acquisition could impact VMware’s significant role in hypervisor architecture, through ESX and other offerings. This is one area of interest for NetApp’s customers.
“Half of our install base runs ESX servers, so the bulk of customers use VMware,” Brotherton said. “It’s mainly on-prem, and we’re just extending to the cloud now, really at scale. There’s a lot of interest in continuing to do that.”
Focus on the data layer
NetApp and VMware have partnered closely to ease the process of cloud migration and reduce complexity for managing multicloud architectures. In August, the two companies unveiled certification and support for VMware Cloud and NetApp Cloud Services on the world’s three largest public cloud platforms.
The enhancements included support for NetApp’s ONTAP data management software in VMware Cloud Foundation with Tanzu. A focus on the data layer has been a key ingredient in NetApp’s partnership with VMware over the years.
“The data layer is a really important layer that provides a lot of efficiency, and we’ve extended our data layer to all the clouds,” Brotherton said. “VMware is a perfect fit for us, and they’ve been a great partner for 20 years, connecting those infrastructure data layers of compute, network and storage.”
NetApp’s collaboration with VMware and its Tanzu offering has extended to Astra, a fully managed, application-aware data management service for Kubernetes-based apps. NetApp Astra provides data protection for Tanzu to safeguard containers at the application level.
“We’ve put a lot of emphasis into Astra,” Brotherton said. “That’s both a cloud service and used on-prem in a lot of my customers. We have to keep moving with our customers to the type of data they want to store. You want to think through the journey.”
Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of “NetApp’s View on Broadcom’s Acquisition of VMware.”
(* Disclosure: TheCUBE is a paid media partner for the “NetApp’s View on Broadcom’s Acquisition of VMware” broadcast. Neither NetApp Inc., the sponsor for theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)
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