Ok, I missed this. I talked about Broadcom yesterday, but what about VMWare revenue specifically? VMware’s quarterly revenue has fallen by $600 million during its first full quarter of ownership by Broadcom. However, Broadcom, as a whole, reported strong growth in forward bookings and significant cost cuts at VMware. Broadcom sees potential in transitioning all VMware products to a subscription licensing model and has signed multi-year deals with a substantial number of customers. Broadcom’s software business, including VMware, CA, and Symantec, has also shown positive results with increased revenue. Broadcom’s silicon business also saw improvement, with revenue growth in AI-related products and networking.
Why do we care?
I missed that VMWare revenue dropped, and that is worth noting.
The $600 million revenue drop at VMware highlights the typical challenges faced during a major business model transition. Broadcom’s strategic shift towards subscription licensing is aimed at securing long-term stability and growth, despite the short-term revenue hit.
Those who have moved from product sales to subscriptions know that there is a brutal revenue drop as you move over, sacrificing one-time revenue spikes for long-term steady income, and as you do so, you see a revenue drop. This told me they’re right in the drop and fully committed. It’s a detail I didn’t want to miss.