Security experts on Monday were somewhat mixed on what the pending acquisition of VMware by Broadcom would mean for the cloud security industry.
If the deal moves forward, it would follow similar security acquisitions by the chip maker, which acquired CA Technologies in 2018 for $18.9 billion. Broadcom also purchased Symantec in 2019 for $10.7 billion. While it kept the software portion, Broadcom sold Symantec’s Cyber Security Services business to Accenture within five months in early 2020.
Frank Dickson, who focuses on security and trust at IDC, pointed out that the acquisition of VMware by Broadcom would essentially create overlapping endpoint security portfolios (see chart).
“It would take a lot of work to integrate those,” Dickson said. “The other issue is focus. Broadcom has already gone through transitioning its portfolio and it sales to focus on enterprise clients. VMware would have small- and mid-market clients for its security solutions. The VMware SMB security customers would need to be prepared to be ‘transitioned' — as in: they will need to find a new vendor.”
Hank Thomas, CEO at Strategic Cyber Ventures, added that VMware acquired one of his firm’s portfolio companies several years ago to enhance its cloud security offering.
“Through that I have been able to track their progress,” Thomas said. “They have built quite a diversified cloud security portfolio over the last few years. Joining forces with a chipmaker is an interesting combination of talent and tech for an industry on the verge of its next big leap forward.”
By the early afternoon Monday, VMware’s stock price was up nearly 20% to $114.85 a share. Broadcom’s was down slightly more than 4% to $520.85 a share.