Broadcom-VMware merger: UK partners weigh in as deal passes CMA scrutiny
We canvassed channel partners for their thoughts on the risk the Broadcom takeover could present to UK competition
Broadcom's blockbuster takeover of VMware is one step closer to the finish line after receiving the green light from the UK's Competition and Markets Authority and the European Commission.
News hit the stands on Wednesday that the CMA has approved the $61bn tie-up, one week after Europe's watchdog gave its own stamp of approval.
The European Commission gave the merger the nod after spending seven months involved in a deep-dive probe that found Broadcom could "foreclose" its only rival for Fiber Channel Host-Bus Adapters (FC HBAs), chipmaker Marvell, had the deal been allowed to proceed.
"The commitments offered by Broadcom will enable its only rival, Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants," Margrethe Vestager, executive vice president in charge of competition policy for the European Commission, wrote in announcing the decision.
Making its case, Broadcom also argued its takeover of VMware does not pose a threat to competitors alone and that the deal would allow them to compete in the market, but not endanger competition within it.
The CMA recently revealed Broadcom and VMware's 40-page response to the inquiry.
Now the deal has passed in the UK and Europe, clearing the way for one of the largest tech mergers of all time, only the US remains to give the acquisition approval.
As the tech sector waits in anticipation for the Americans to decide, CRN reached out to several channel partners to find out whether they think the deal constitutes a threat to competition in the UK market or not.
Richard Blanford, CEO and founder Fordway Solutions
How is this deal likely to affect competition in the UK cloud market?
I don't think it will impact the public cloud/hyperscaler market much, if at all. We won't really know the impact on the private cloud/internally hosted market until we understand Broadcom's strategy and intentions but I wouldn't expect too much change, VMware is well embedded and pretty dominant in that market and likely to remain so.
Would the scale offered by the Broadcom buyout make VMWare's multi-cloud plan more viable?
Broadcom may help them reach new markets but looking at the UK specifically, unless they are planning on releasing tools allowing dynamic and seamless two-way migration of workloads between VMware and the hyperscalers, or natively between the major hyperscalers I don't think they will have a major impact.
Public cloud spend far exceeds private globally, but would the introduction of a private cloud provider at this scale boost demand and provide an opportunity for partners?
For specific workloads that organisations don't want to or can't host on the public cloud, yes, but it's a limited, and in my view, shrinking market.
Broadcom-VMware merger: UK partners weigh in as deal passes CMA scrutiny
We canvassed channel partners for their thoughts on the risk the Broadcom takeover could present to UK competition
Rob Smith, CTO at Creative ITC
How is this deal likely to affect competition in the UK cloud market?
The UK cloud market is already a competitive space with major players offering a multitude of services. The Broadcom-VMware acquisition could indeed reshape the landscape, bringing in fresh competition, particularly in the private cloud segment.
That said, the impact of this deal on competition will largely depend on Broadcom's execution of their stated plan and their ability to capitalise on VMware's existing market position.
Would the scale offered by the Broadcom buyout make VMWare's multi-cloud plan more viable?
Broadcom's acquisition could provide the much-needed scale for VMware to actualise its multi-cloud strategy, mainly because of Broadcom's resources and expansive reach.
The stated plan to invest an additional $1bn a year in R&D, build up deployment support capabilities, and double VMware's professional services capabilities demonstrates a clear commitment to this goal.
However, the efficacy of this move is contingent on whether Broadcom can successfully address the identified areas where VMware has struggled in the past.
Public cloud spend far exceeds private globally, but would the introduction of a private cloud provider at this scale boost demand and provide an opportunity for partners?
The trend towards public cloud usage does not negate the role and importance of private clouds, particularly for businesses with specific security, compliance or operational needs.
By entering the private cloud market at this scale, Broadcom could potentially stimulate demand by highlighting the advantages of private clouds.
As a managed service provider, we at Creative ITC see potential opportunities for us and other partners to work closely with an entity of this scale and contribute to their growth and success.
Referring back to my earlier comments on the previous CRN article on the acquisition, I think it's pertinent to say that while there are indeed opportunities, there is also some degree of apprehension. As I've noted before, Broadcom's commitment to continued investment in R&D and support for VMware's offerings, and their potential impact on channel dynamics, are areas to watch.
Broadcom-VMware merger: UK partners weigh in as deal passes CMA scrutiny
We canvassed channel partners for their thoughts on the risk the Broadcom takeover could present to UK competition
Gavin Jolliffe, CEO at Xtravirt
How is this deal likely to affect competition in the UK cloud market?
The deal highlights the continued reality that datacentre workloads continue to represent the largest proportion of corporate compute. Having true customer choice for cloud functionality regardless of on-premise and public cloud is key for a healthy and competitive marketplace.
VMware clearly wins in the enterprise datacentre and the Broadcom-VMware tie up creates a counterbalance to the public cloud giants, while maintaining its neutral Switzerland style stance to multi-cloud operations, cost and management.
Would the scale offered by the Broadcom buyout make VMWare's multi-cloud plan more viable?
Many customers are still adapting to the need for a multi-cloud strategy as they extend beyond their first cloud use-cases. The Broadcom investment underwrites the value of VMware's cross-cloud portfolio as the widest reaching cloud-agnostic solution set.
Public cloud spend far exceeds private globally, but would the introduction of a private cloud provider at this scale boost demand and provide an opportunity for partners?
VMware remains the iceberg of the industry with the vast majority of enterprise workloads still hosted on a VMware platform in a datacentre. Cloud chaos persists whether organisations continue to pivot to public cloud or not, and with ongoing scarcity of skills and demand for sovereignty, the opportunity for cloud partners remains significant.
There is the vision of cloud that firms buy into and then there is the reality of getting there. Increased investment in simplifying and extending the cloud-enablement and cross-cloud integration of these environments in collaboration with qualified partners can only be to customers benefit.