VMware Inc.
2023
$69.0B
Why
Broadcom's acquisition of VMware, completed November 22, 2023, for approximately $69 billion including assumed debt, was the largest technology acquisition in history and the defining transaction of Hock Tan's tenure. VMware's approximately 33,000 enterprise customers running its vSphere, NSX, and vSAN virtualization platform had some of the highest switching costs in enterprise technology — replacing VMware in a large enterprise data center environment is a multi-year, multi-billion-dollar undertaking. The acquisition was designed to add a massive, defensible software recurring revenue stream to Broadcom's semiconductor cashflows, creating a company that could sustain high margins across semiconductor cycles.
Impact
The VMware acquisition added approximately $14 billion in incremental revenue in the partial fiscal year 2024 (compared with Broadcom's pre-existing infrastructure software revenues from CA and Symantec), and the infrastructure software segment reached approximately $21.51 billion for the full fiscal year. The deal transformed Broadcom into one of the largest enterprise software companies in the world by revenue, gave it control over the critical virtualization layer of private cloud infrastructure globally, and created the foundation for a subscription ARR build that management projects will grow significantly as the VCF conversion cycle matures.
Outcome
Successfully closed following regulatory approvals across multiple major jurisdictions; organizational integration ongoing with Broadcom applying standard post-acquisition playbook including headcount reduction, product portfolio rationalization, VCF bundle launch, and subscription conversion; first full year of consolidated revenue demonstrated the financial model's strength; EU regulatory investigation ongoing as of mid-2025.