May 31, 2022
Forrester analysts are concerned about the impact of Broadcom’s $61 billion acquisition of VMware.
For them, Broadcom’s acquisition of VMware may raise prices while cost-cutting measures aimed at achieving profitability goals. This could have a negative impact on support and innovation.
“For acquired companies, a Broadcom acquisition sparks fear of price hikes, diminished support, and stunted innovation. With VMware, the big question is whether Broadcom can leverage a massive enterprise software portfolio and customer base to build a competent modern solution that extends from mainframe to edge. Or does it continue with the same trend of squeezing clients for licensing dollars at a time of rising global inflation?” a group of Forrester analysts wrote in a blog post.
The researchers also pointed to an earlier acquisition by Broadcom. Through the acquisition, the company bought CA and Symantec. Upon completion of the deal, Forrester said customers saw large price increases, deteriorating customer service and little product development and innovation.
The VMware acquisition will be settled in cash and shares and is worth 61 billion dollars. The deal is expected to be completed in 2023. Once completed, it will be the third largest technology acquisition in history.
The sources for this piece include an article in TechRepublic.
