On July 21, 2023, the European Commission (EC) granted conditional antitrust approval to Broadcom’s proposed acquisition of VMware. The EC said that Broadcom would have to offer interoperability commitments to rival Marvell Technology in order to maintain competition in the market for Fibre Channel Host-Bus Adapters (FC HBAs).
In a blog post, EC Competition Commissioner Margrethe Vestager said that the approval was conditional on Broadcom’s commitments to ensure that there will be continued competition in the market for FC HBAs. These commitments include:
- Broadcom will continue to provide Marvell with the information and tools it needs to develop and certify third-party FC HBAs.
- Broadcom will not use its ownership of VMware to discriminate against Marvell in the supply of FC HBAs.
- Broadcom will not acquire any other FC HBA supplier for a period of five years.
The EC said that these commitments would address its concerns that the acquisition of VMware could lead to higher prices and less innovation in the market for FC HBAs.
VMware is a leading provider of cloud computing infrastructure software. Broadcom is a semiconductor company that provides a wide range of products, including networking and storage solutions. The acquisition would combine VMware’s software expertise with Broadcom’s hardware capabilities to create a major player in the cloud computing market.
The acquisition has been met with mixed reactions from industry analysts. Some analysts have praised the deal, saying that it will create a more comprehensive cloud computing platform. Other analysts have expressed concerns that the deal could reduce competition in the cloud computing market.
The EC’s decision to grant conditional approval to the acquisition is a positive development for Broadcom. The deal will now move forward, subject to the satisfaction of the remaining conditions.
What does the deal mean for VMware customers?
For VMware customers, the deal means that they will continue to have access to the same high-quality products and services that they have come to expect. Broadcom has a strong commitment to customer satisfaction, and it is committed to continuing to invest in VMware’s products and services.
The deal also means that VMware customers will have access to Broadcom’s broader portfolio of products and services. This could include things like Broadcom’s networking and security solutions. This could give VMware customers more choices and flexibility, and it could help them to improve their IT infrastructure.
For example, VMware customers who use Broadcom’s networking products will be able to take advantage of new features and capabilities that are developed by both companies. This could help VMware customers to improve their network performance and security.
What does the deal mean for the IT industry?
The deal could have a number of positive implications for the IT industry. First, it could help to accelerate the adoption of cloud computing. Broadcom and VMware are both leaders in cloud computing, and their combined resources could help to make cloud computing more accessible and affordable.
For example, Broadcom could use its expertise in networking and storage to help VMware develop new cloud computing solutions. This could make it easier for businesses to adopt cloud computing and take advantage of the benefits that it offers.
Second, the deal could help to spur innovation in the IT industry. Broadcom and VMware are both innovative companies, and their combined expertise could lead to new and groundbreaking products and services.
For example, Broadcom and VMware could collaborate on new cloud computing technologies that improve performance, security, and scalability. This could help to advance the state of the art in cloud computing and make it more appealing to businesses.
Overall, the deal between Broadcom and VMware is a positive development for the IT industry. It could help to accelerate the adoption of cloud computing, spur innovation, and create new opportunities for IT businesses.
What are the next steps?
The next step is for Broadcom and VMware to finalize the terms of the acquisition and obtain regulatory approvals from other jurisdictions. Once all of the regulatory approvals are in place, the deal is expected to close in the second half of 2023.
The acquisition of VMware by Broadcom is a major deal that could have a significant impact on the IT industry. The deal is still subject to regulatory approvals, but if it goes through, it could help to accelerate the adoption of cloud computing, spur innovation, and create new opportunities for IT businesses.
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