Hock Tan, CEO of Broadcom,

highlights VMware’s private cloud and AI future.

 

At this week’s VMware Explore event, CEO of Broadcom Hock Tan figuratively wrapped up the acquisition of VMware by praising the company’s integration efforts since the merger occurred nine months ago and asserting that artificial intelligence (AI) and private clouds are where VMware’s future lies.

In his first round of fundraising, Tan made it clear that VMware was no longer the entity it once was, which allowed it to expand and become something that Broadcom had to pay close to $70 billion to buy.

We apologize, but this year at Explore, you’re going to notice a shift because we take business seriously. And you, too. Tan declared, “At Broadcom, business is our priority. We’re here to assist you in managing your company more successfully. We’re not here to show you bright shiny objects, and we’re not here to talk about bright shiny objects.”

Tan thus devoted most of his speech to highlighting the intricacy and difficulties VMware clients have faced in the last ten years as a result of the growing popularity of public clouds.

Tan stated, “Your CEO and board of directors drove you to public cloud ten years ago because they fell in love with its promise.” “I see that you’re all experiencing PTSD as a result of this.“

Tan made the connection between post-traumatic stress disorder and the complexity and cost issues that businesses are currently facing with public cloud installations.

“You never realize how much more expensive public cloud is,” Tan stated. “Complexity is an additional layer and platform that you have to manage, and it’s more expensive and complex in terms of compliance if you have regulatory policy requirements.”

This complexity is a result of legacy public cloud infrastructure designs that, while they enabled businesses to choose best-of-breed platforms for particular applications, frequently prevented them from connecting those resources.

Simply peek behind the scenes in your setting, which is why you switched to public cloud in the first place, as there is much space for development, according to Tan. “The legacy of data centers, which produced best-of-breed in networking, storage, and computation, is what you inherited. You’re incredibly compartmentalized. Because silos don’t cooperate effectively and it hurts to provide services to your internal clients, you are in a terrible situation. When something goes wrong, which it frequently does, everyone starts blaming one another. Reduce your ability to bounce back. Days to identify the underlying causes. You must create a ticket to deploy a new application. You may receive that virtual computer in two months if you submit a ticket to your IT department.

Since closing the VMware acquisition, Broadcom has made expense its highest priority. Analysts have expressed time and time again how long-standing clients of Broadcom’s have seen major cost hikes as a result of the company’s price and license changes to VMware’s services, leading many of those organizations to explore other options.

Broadcom has refuted that story on multiple occasions, pointing out that VMware and its business clients have benefited greatly from the adjustments. But Broadcom has also demonstrated flexibility in price with some of VMware’s larger clients.

During VMware’s most recent earnings call, Tan informed investors that the company has signed up “close to 3,000 of our largest 10,000 customers” for VMware’s new subscription licensing model. “Everyone who uses these services usually signs a multi-year contract,” he continued. This resulted in an annualized booking value that rose from $1.2 billion in the first quarter of this year to $1.9 billion in the most recent quarter.

Regarding its efforts to convert legacy VMware clients to the new licensing scheme, Tan stated, “We’re making good progress.” “The journey is far from over, but the shift to subscription is very much as expected.”

Broadcom’s VCF updates … with AI!

Broadcom’s key to that subscription push – and to ease public cloud complexity and cost – is VMware’s newly updated Cloud Foundation (VCF) platform that has become central to Broadcom’s VMware efforts.

The platform this week received a rash of updates tied to making it a more robust central management platform for controlling enterprise infrastructure. This includes a self-service cloud portal with more insights and a user interface to ease management; updates to import and storage management; and integration of VMware’s Private AI Foundation work with Nvidia to help with security management.

At the Explore event of the previous year, VMware initially announced its Private AI Foundation platform. It is intended to speed up storage, networking, deployment, and time-to-value for businesses while enhancing privacy, choice, performance, data center scaling, and cost.

This week, the platform received a model store manager that enables businesses to download and customize models from the public internet. It became generally available earlier in the year.

During a press briefing, Paul Turner, vice president of products at VCF, clarified that this ensures that no one is utilizing large language models (LLMs) “that you don’t want to support” and curates the models. It also gives access control over those models.

Turner explained, “This gives you a way to manage those LLMs across your user base so that you can truly let them turn on their [generative AI] innovation and run against the’ platform. “Because, out there on the internet, you don’t know the provenance of that LLM and where it’s coming from,” Turner said.

Broadcom this week also added support for Intel’s Gaudi 2 AI Accelerators to further expand silicon options.

Those VCF platform updates are also providing a broader support base for VMware’s cloud-native Tanzu platform, which itself gained new features for its “10” iteration. Those Tanzu enhancements include support for VMware’s various AI products; an application-centric layer to make it easier to manage deployments; and greater support for air-gapped, off-network private cloud environments.

Paul Nashawaty, lead principal analyst at The Futurum Group, noted in a report that the Tanzu 10 updates provide that platform with a competitive advantage over similar cloud-native platforms from rivals like Red Hat OpenShift, Amazon Web Services (AWS) Elastic Kubernetes Service (EKS), and Google Kubernetes Engine (GKE) “due to its deep integration with the VMware ecosystem. This integration can provide organizations with a smoother transition to cloud-native architectures, especially for those already using VMware products.”