The Six Five team discusses the UK’s CMA approval of Broadcom’s acquisition of VMWare.
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Transcript:
Pat Moorhead: Broadcom gets CMA approval right on the fricking heels of EU approval.
Daniel Newman: I know, I feel like we’re talking about this every week. Do you think next week they’ll get China?
Pat Moorhead: I don’t know. They need SAMR and they need FTC.
Daniel Newman: Yeah, you know what? I got called on that a little bit because I said the CMA was like, “This is a good one.” Someone’s like, “Well, do they have China yet?” And I’m like, “Eh.” So here’s the thing. I don’t know if I’ve taken this as a pass or the fact that maybe my fundamental belief is China has procured exactly one license of VMware ever. There’s a story behind this.
Pat Moorhead: I’m listening.
Daniel Newman: China copies everybody’s software and then it’s just like I don’t think they buy any of it. I’m being a little tongue in cheek, but what I’m saying is, unlike things like certain cloud or certain semis or certain real, what I would call SEPs, things that are standard, essential that they feel like they need to compete on a global level, I don’t think China’s going to be a problem with this one, just holding out. Now, Lina Khan could be a problem. She just can’t win. She literally can do nothing but lose. The courts have pretty much not supported any of her cases so far, and so does she want to raise a case here? It seems like there’s a threshold and it seems to be anything over like $10 billion, she’s going to try to stop.
And so the FTC’s really interesting. But, Pat, the thing about the CMA that’s I guess just worth noting was they said they were going to do a deeper probe. People thought maybe this is going to be the one that was going to be the big holdup. Just like last week, the EU, the CMA said they looked, they took a peek under the hood. They decided, “No, it’s not an enough deal.” We did talk about this last week, so I don’t think we need to spend a ton of time on it, but just on a quick note, there are going to be concessions, there will be probably a few more before this thing’s all done.
And I wouldn’t even be surprised if some things get spun off quickly in businesses, whether that’s at Broadcom or VMware. Hock has a plan. We know that. If you don’t know his plan, he’s actually shared it with you and I at The Six Five Summit as our opening keynote speaker. You need to check out that video if you haven’t already.
Pat Moorhead: Is that it?
Daniel Newman: Do you want me to talk for 10 minutes?
Pat Moorhead: If you don’t mind. No, I’m just kidding. Dan, those were great adders. So we have SAMR, which is China, and we have the FTC coming up. One note on CMA approval, it was without conditions. So unlike EU related to the Marvell stuff, by the way, I don’t know how you jockey back and forth where one regular later tells you one thing that by the way would make no sense to do in global.
The other comment I’ll make is VMware virtualization, some analyst firms are claiming up to 70% market share. I just don’t even believe it to be honest with you. If I look at all the state-based institutions out there that rejected 10 years ago, pretty much all US technology, I’m pretty sure that’s KVM-based, open source. But anyways, Israelis analysts don’t get everything right. I mean, we do, right?
Daniel Newman: I’m wondering if I got the one license right, but it was really funny to me.
Pat Moorhead: No, it was funny.
Daniel Newman: China copies and steals everything.
Pat Moorhead: I virtually patted you on the back.
Daniel Newman: Thank you.
Pat Moorhead: So anyways, yeah, this thing’s going through and unlike Activision, Microsoft, unlike what we saw with Qualcomm and NXP, you have a hardware, mostly a hardware company buying a software company. And sure, if you smoke enough or drink enough, you can come up with some ways.
Daniel Newman: Smoke what?
Pat Moorhead: You can come up with some ways that this could be abused, but that would also mean nothing about business and where the motivation comes from. So Broadcom makes a whole lot more money off of VM licenses and soon to be multi-cloud than can make off a $100 NIC
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
