Broadcom To 'Focus On Rapid Transition To Subscription' For VMware

Broadcom has signaled its $61 billion acquisition of VMware will involve a 'rapid transition from perpetual licenses to subscriptions.' The Register reports: That's according to Tom Krause, president of the Broadcom Software Group, on Thursday's Broadcom earnings call. He was asked how the semiconductor giant plans to deliver on its guidance that VMware will add approximately $8.5 billion of pro forma EBITDA to Broadcom within three years of the deal closing -- significant growth given VMware currently produces about $4.7 billion. And subscriptions was the answer. Krause also repeatedly said Broadcom intends to invest in VMware's key product portfolio and is pleased to be acquiring a sales organization and channel relationships that give it reach Broadcom does not currently enjoy.

Krause and Broadcom CEO Hock Tan both said Broadcom plans to nurture VMware's 300,000-plus customer base. The move to subscription-based licensing will apparently happen over the course of the next few years. VMware may also experience slower growth in the short term due to the licensing shift. Krause said Broadcom is willing to live with lower margins for VMware than it expects from CA and Symantec, with R&D to benefit as a result. The software boss pledged ongoing investment and innovation for VMware's core infrastructure products, naming vSphere, VSAN, vRealize and NSX as the subjects of ongoing love and attention

Read more of this story at Slashdot.