It does not matter that Broadcom seems to have hacked off the channel with its VMware plans. Its CEO, Hock Tan, has declared that its VMware business is poised for a meteoric rise.
For those who came in late, Broadcom redid its channel policy to focus primarily on large channel partners. Tan has expectations of double-digit growth.
“We’re not just selling; we’re revolutionising the way our customers use private clouds,” Tan proclaimed as he unveiled his strategy to use VMware’s untapped potential. With a focus on upselling to 2,000 strategic customers, Tan’s vision is clear: to transform on-prem datacentres into powerhouses of efficiency and innovation.
Tan confidently stated, “It’s still the early days, but our VMware Cloud Foundation initiative is already a resounding success.”
VMware’s revenue is set to skyrocket quarter after quarter, defying the odds and setting a new standard in the industry.
Tan’s master plan involves the VMware Cloud Foundation (VCF), a self-service cloud platform that’s as versatile as it is powerful and capable of complementing or even replacing public cloud solutions.
“VCF is the complete package, integrating compute, storage, and networking to modernise datacentres,” Tan explained, hinting at a future where VMware stands at the forefront of digital transformation.
In a strategic partnership with Nvidia, VMware is now equipped to run its GPUs, which allow customers to deploy AI models on-prem without sacrificing privacy or control. This capability drives unprecedented demand, particularly from enterprises eager to manage their burgeoning workloads in-house.
The numbers are staggering, with Broadcom’s revenue hitting £9.34 billion, a 34 per cent increase year-over-year, and net income reaching £1.03 billion. Shareholders have reason to celebrate, too, with a quarterly dividend announcement of £4.10 per share.
Tan didn’t shy away from calling VMware the “star of the show,” he detailed the company’s strategic moves over the past three months to maximise the benefits of the £53.91 billion acquisition.
“Everything is proceeding as planned,” Tan assured, focusing on enhancing the VCF stack and supporting the deployment for their top-tier customers.
Broadcom’s software revenue guidance stands firm at £15.63 billion for the fiscal year. Networking revenue is expected to surge by over 35 per cent, outpacing the previous 30 per cent projection. While wireless chip revenue has decreased, Tan remains optimistic, forecasting a steady performance year on year.
The fiscal year 2024 looks bright, with anticipated revenues of £39.06 billion, marking a 40 per cent growth. Tan attributes this surge to stronger-than-expected AI sales, which have bolstered the company amidst cyclical downturns in other areas.
“We initially projected AI revenue to be 20 per cent of our full-year semiconductor revenue. We’re looking at a robust 35 per cent, amounting to over £7.81 billion,” Tan revealed, setting the stage for a year of unprecedented growth.
Broadcom has decided to retain VMware’s end-user computing business, with a sale expected to close by the fiscal year’s end, boasting a price tag of £3.13 billion. The company also plans to merge Carbon Black with remnants from its Symantec acquisition, creating the formidable “Enterprise Security Group.”
Broadcom’s CFO Kristen Spears was quick to downplay any concerns, stating, “The impact on revenue and profitability is not significant,” leaving industry watchers and investors alike buzzing with anticipation for what’s to come.
