How VMware powered Broadcom to nearly $2 bn business in India

Broadcom Inc, a global infrastructure technology firm with roots based in the technical heritage of AT&T/Bell Labs, Lucent and Hewlett-Packard/Agilent, has entered a new growth trajectory after the global $61 billion acquisition of VMware.

Techcircle had previously captured how the group’s Indian operations had likely crossed the billion-dollar mark in FY23. Indeed, the latest data compiled by financial research platform VCCEdge, shows that at the four key companies of the group in the country came close to hitting the $2 billion-mark in the year ended March 31, 2024 as against $1.2 billion the previous year.

Overall revenues of flagship VMware, LSI India R&D, CA India Technologies and Broadcom Communications topped the ₹15,834 crore-mark in FY24, up 44% over the previous year.

This shows the group has come a long distance from the limited presence in India when it was created nine years ago when Avago acquired Broadcom Corporation.

Avago had revenues of around ₹500 crore via two entities it owned while Broadcom Communication separately generated around ₹1,000 crore in business at that time.

VMware has been on its own league with its local operations and in itself entered the billion-dollar revenue club in India.

LSI was the showstopper with more than 63% jump in revenue to ₹4,450 crore or more than $500 million. CA India Technologies rose 42% to ₹2,060 crore. Brocade Communications, the smallest of the entities rose 37%.

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.

VMware did not respond to TechCircle's queries on this article.

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.

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.

Notably, VMware, which originated as a Silicon Valley startup and became a leader in virtualisation and cloud solutions, has been active in India for nearly 15 years, establishing its second-largest site in the country after Palo Alto, US, the company’s headquarters. This site houses employees close to a quarter of the company’s overall headcount.

In FY2023, VMware generated over $13 billion in total revenue, primarily from service businesses, especially software maintenance services, which contributed more than $6.5 billion. In the third quarter of fiscal year 2024, VMware contributed $3.8 billion to Broadcom's consolidated revenue of $13.1 billion, reflecting a 47% increase from the previous year.

CEO Hock Tan told investors in September 2024 that VMware is successfully transitioning customers from perpetual to subscription licenses, with an emphasis on full-stack VMware Cloud Foundation (VCF) subscriptions. This momentum is expected to continue into Q4 and likely into 2025. Notably, VCF is a hybrid cloud platform that allows users to implement software-defined data centre subscriptions that is purchased through the VMware Cloud Console.

Currently, VMware is advancing in data centre transformation, hybrid cloud, Artificial Intelligence (AI), and end-user computing. VMware has a strong foothold in sectors such as government, banking, and telecommunications. Its significant presence in the public sector includes providing cloud and virtualisation solutions to various government agencies, such as the National Informatics Centre (NIC), which manages IT infrastructure for Indian ministries.

Recently, VMware has collaborated with Indian telecommunications companies to implement new 5G services and modernise networks. Additionally, it has partnered with IndusInd Bank and Federal Bank to enhance their applications and improve customer experience.