It seems that Broadcom isn’t quite finished with its shake-up of VMware just yet, as it plans to sell off its End-User Compute (EUC) arm.
According to reports, Broadcom, which bought VMware in November 2023, is selling the EUC portion to KKR, a private equity firm that already owns cyber security firm Barracuda Networks, as well as Cloudera and BMC. The alleged figure for the purchase is $3.8bn.
Broadcom announced its intentions to sell VMware’s EUC operation in December last year. The Register claims that the revenue generated from that side of the business is around $1bn a year.
Big changes, unhappy customers
VMware’s EUC sector boasts some high-level clientele, including those in government and tightly-regulated industries. Such organizations typically favor using virtual desktops as opposed to on-prem hardware for added security and privacy.
Since Broadcom’s purchase of VMware, it has made some significant and controversial changes to the cloud computing service, including the termination of perpetual licenses, which struck fear into many customers over rising prices. It also axed the free ESXi Hypervisor.
The Register found an example of a customer complaining that their costs have risen by an eye-watering 6600% since the changes, and another claiming that their renewal bill went from $8m to $100m.
Prashanth Shenoy, a VP at VMware, tried to placate customers by putting a positive spin on the sweeping changes, claiming that the shift to monthly subscriptions offered greater flexibility for customers, and that the downsizing of VMware’s portfolio would make the platform more efficient, as well improving the higher-value products.
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