Broadcom’s acquisition of VMware: impacts to healthcare

Executive Summary

VMware acquired by Broadcom

The acquisition of VMware by Broadcom in November 2023 marks a pivotal moment in the healthcare IT landscape. This strategic move by Broadcom has introduced both opportunities and challenges for healthcare provider organizations (HCPs). On the one hand, HCPs are expected to benefit from Broadcom’s focus on innovation within the VMware product sets and the increased scalability offered by a cloud environment. On the other hand, HCPs are experiencing large, unexpected cost increases and limited renewal options for their existing VMware products as a direct result of the acquisition.

Technology Benefits

Integrating VMware’s powerful virtualization and cloud infrastructure with Broadcom’s extensive technology portfolio promises enhanced scalability, security and innovation. Broadcom has committed to focusing on research and innovation within their new (VMware) product sets. Ideally, HCPs will use forthcoming advancements to streamline operations, improve patient care and accelerate digital transformation initiatives.

Cost Increases

These idealized improvements will be costly – many HCPs are facing substantial price increases as a direct result of Broadcom’s acquisition. This necessitates a critical evaluation of the new VMware model. To maximize benefits, healthcare IT executives should optimize their use of VMware’s cloud-native solutions, like VMware Cloud Foundation and VMware Tanzu, to boost agility and reduce costs. Alternatively, some are considering a transition away from VMware as a viable path to maintaining cost efficiency and operational effectiveness. Nutanix can fully replace VMware, while alternatives for specific components, like desktop virtualization and hypervisor services, can be achieved with Azure Virtual Desktop and Kernal-based Virtual Machines (KVM).

Navigating the post-acquisition landscape involves balancing the benefits of Broadcom’s enhanced VMware offerings with the financial and operational impacts. By aligning IT investments with organizational goals, HCPs can either leverage new capabilities or transition smoothly to alternatives.

Key Takeaways

• Broadcom has reduced and consolidated VMware’s product offerings
• HCPs in a position to leverage the new VMware Cloud can gain many operational efficiencies
• Prices have significantly increased across all VWware product lines
• Budget-conscious HCPs must determine their plan: either reduce or replace their current VMware footprint, or leverage the new VMware model sustainably and factor in ideal-state upside