Broadcom’s India play enters billion-dollar club riding on VMware

Broadcom Inc, a global infrastructure technology firm with roots based in the technical heritage of AT&T/Bell Labs, Lucent and Hewlett-Packard/Agilent, had a limited presence in India when it was created eight years ago as Avago acquired Broadcom Corporation. 

Avago had revenues of around Rs 500 crore via two entities it owned while Broadcom Communication separately generated around Rs 1,000 crore in business. After it brought the businesses under a single umbrella in FY18, revenues nearly doubled in the first two years itself and is believed to have grown further. 

But the real push-up is happening now with the global $61 billion acquisition of VMware (additionally, Broadcom will assume $8 billion of VMware net debt), which has been on its own high growth trajectory in India. 

VMware did not respond to TechCircle's queries but data compiled from financial research platform VCCEdge, shows VMware has been on its own league with its local operations and if recent trends continue it will enter the billion-dollar revenue club in India on its own soon. Indeed, Broadcom’s overall India play could well already be in the $1-1.5 billion league this year. 

Broadcom in its current form has been created by the combination of industry leaders Broadcom, LSI, Brocade, CA Technologies, Symantec's enterprise security business and VMware. The latest deal reached completion at the tail end of 2023 after a tough battle with antitrust bodies. 

Founded in 1998 and a subsidiary of Dell until October 2021 (VMware was acquired by Dell in 2015), VMware is one of the top solution providers in virtualisation and cloud computing. It was the first to virtualise x86 architecture. 

The company’s India site is the biggest office outside of Palo Alto and houses employees close to a quarter of the company’s overall headcount. 

Post-acquisition, Broadcom has announced some major shakeups in the company already. Before the acquisition was completed, Hock Tan, president, and chief executive of the US-based chip company said that Broadcom will spend $2 billion a year on research and development at VMWare. Tan said that a part of the investment will also focus on accelerating the adoption of VMWare solutions by enterprises. 

On the other hand, Broadcom has shut down VMware partners program, remodelling it to an invitation-only Broadcom Advantage Partner Program, leaving VMware customers at lurch about the future of access to VMware. Additionally, in a filing with the California Employment Development Department a few days after acquisition, Broadcom said that it will lay off more than 1,200 employees starting this month.