Broadcom Completes Acquisition of VMware, Moves to Subscription Model
Having completed its acquisition of VMware, Inc, Broadcom Inc., a provider of semiconductor and infrastructure software solutions, is moving forward with plans to enable enterprise customers to create and modernize their private and hybrid cloud environments.
Of the acquisition, Hock Tan, President and Chief Executive Officer of Broadcom, said, “We are excited to welcome VMware to Broadcom and bring together our engineering-first, innovation-centric teams as we take another important step forward in building the world’s leading infrastructure technology company.”
According to a Forbes article on the subject, Broadcom will be pivoting VMware’s business model from a perpetual license to a subscription-based one, a strategy that provides Broadcom with sustained revenue growth. While the change aligns with the broader industry trend towards subscription service, the shift may also create tension with customer relationships, as subscriptions are generally seen as more expensive than a perpetual license.
Tan, however, is optimistic that the acquisition and business strategy will be lucrative:
“The acquisition of VMware is transformational,” Tan said in the most recent earnings release. “In fiscal year 2024 we expect semiconductor to sustain its mid to high single digit revenue growth rate, with the contribution of VMware driving consolidated revenue to $50 billion and adjusted EBITDA (earnings before interest, taxes depreciation and amortization) to $30 billion.”
IBM Statement on the Landmark EU AI Act
Policymakers in the European Union announced on December 8th the introduction of a comprehensive set of laws to govern the use of AI, one of the first legislative attempts to control the rapidly evolving technology. While the bill will not be fully enacted as EU law until it is approved by the European Parliament at a vote scheduled for early 2024, IBM has lost no time in weighing in on the new legislation.
According to the press release, IBM supports EU negotiators’ provisional agreement on the world’s first comprehensive AI legislation, but urges the EU to ”take a carefully balanced approach that focuses on regulating high-risk applications of AI while promoting transparency, explainability, and safety among all AI models.”
Amidst concerns that new regulations will create a compliance burden on businesses which could stifle growth, the company also encouraged EU policymakers to ”retain this focus on risk and accountability, rather than algorithms.”
Of particular interest to mainframers, IBM cites its recently announced watsonx.governance, as an example of a toolkit that can help “manage risk, embrace transparency, and anticipate compliance with AI-focused regulation like this.”
Source: IBM
Sonja Soderlund is an Oregon-based B2B freelance writer. Whether writing about mainframe computers, educational technology, or sustainable retail, she strives to bring clarity to complex issues. Connect with her at sonjasoderlund.com or LinkedIn.