VMware Explore 2025 | VMware Explore 2025 Kickoff

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Rebecca Knight

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SiliconANGLE Media

Broadcom’s VMware overhaul puts private cloud at the center of enterprise AI shift

Artificial intelligence, private cloud and sovereign computing are reshaping the enterprise landscape at breakneck speed. Companies are no longer just experimenting; they’re being pushed to adopt architectures that balance innovation with governance and risk.The conversation around VMware LLC under Broadcom Inc. fits squarely into this moment. More than a year after the acquisition closed, the new leadership has introduced sweeping changes in business model, pricing, private cloud strategy and focus. What was once a sprawling ecosystem is now being streamlined for enterprise-scale impact, according to theCUBE Research’s John Furrier (pictured, right)

play_circle_outline VMware Explore coverage kicks off with insights from Rebecca Knight and John Furrier.

play_circle_outline Discussing the impact of AI and other technology disruptors on the industry.

play_circle_outline Broadcom's Acquisition of VMware: Driving Revenue Growth and Transforming Business Models to Subscription-Based Services

play_circle_outline Shift in focus to larger enterprises and private cloud offerings within VMware's strategy.

play_circle_outline Enhancing Customer Value: VMware's Simplified SKUs and VCF 9.0 Integration for Improved Satisfaction and Retention Strategies

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VMware Explore 2025 Kickoff

Rebecca Knight

Host SiliconANGLE Media

HOST

In this kickoff segment from VMware Explore 2025, theCUBE’s John Furrier and Rebecca Knight set the stage for wall-to-wall coverage live from The Venetian in Las Vegas. They dive into how Broadcom’s acquisition of VMware has reshaped strategy, customer experience and the broader ecosystem just over a year after the deal closed. The discussion frames VMware Explore as a proving ground for enterprise modernization in the AI era, where private cloud, sovereign AI and simplified subscription models are front and center.

Furrier and Knight unpack the stra... Read more

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What recent developments have occurred regarding VMware and the technology landscape? add

What recent developments have occurred regarding Broadcom and VMware, and what is the current state of the tech industry in relation to AI and infrastructure? add

What is the evaluation of Broadcom's business model in relation to VMware's revenue growth and historical context? add

What changes have occurred at VMware under Broadcom's ownership compared to its previous business model? add

What are the characteristics and strategic goals of VCF 9.0 as discussed in relation to customer preferences for VMware? add

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VMware Explore 2025 Kickoff

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Rebecca Knight

>> Hello everyone, and welcome to theCUBE. We are soon to kick off our coverage of VMware Explore here at The Venetian in Las Vegas. I'm your host, Rebecca Knight, and I'm sitting alongside co-founder of theCUBE, co-CEO of theCUBE, John Furrier. We're about to do it, we haven't worked together in a while.

>> Great to see you. What a year it's been. It's been so much action, the first half of the year, we actually ran a half-time re:Invent program because normally all the announcements would be done there, but a lot going on with AI, a lot of transformational things, quantum's right around the corner, cryptocurrency as an infrastructure is disrupting banking. So the world has absolutely changed, and AI and actually these new disruptive enablers are really changing the game. Obviously, Nvidia, very valuable company, look at the value of the stock. Broadcom earnings are one of the hottest stocks to own. If you bought Broadcom when we told you to a couple of years ago, you'd be very rich. But Broadcom bought VMware, now it's Broadcom-VMware, it's in the software division. VMware's changed, we're going to kick off tomorrow, our official day. There's so much going on in the industry, AI, private AI, sovereign cloud, sovereign AI. At the chip level, you're seeing a re-architecture of how these large... Nvidia's now in the news, Hot Chips is happening. I was there in the city, in Stanford, in Palo Alto. All the top engineers are working on the best components, the best infrastructure, being rebuilt, and so many are reimagining every app that we use will be infused by AI, so that's going to put a lot of pressure on the enterprises. So VMware is in the middle of the action, so it's going to be interesting to see how the show plays out and how the keynotes land tomorrow.

Rebecca Knight

>> Indeed, it is. And so, as you said, it's been about a year since the acquisition closed, and that's generally enough time for the dust to settle, and the stakes are really high, because as you also said, VMware really sits at the center of the enterprise, and how it evolves under Broadcom will shape how thousands of companies run their IT departments. What are your impressions of this past year and where things stand right now going into VMware Explore?

>> Remember when in 2023, the big controversy was will the deal even be closed, because the Chinese regulators and all kinds of... But it ended up going through, so we're now about a year in or more, a little over a year, a lot's changed. So, first of all, the business model Broadcom has implemented is genius. If you look at the earnings from Broadcom, VMware has doubled, in my squinting through the estimates, they don't break it out, but I estimate they're probably going to be closer to $20 billion in revenue just from VMware. I think the high watermark for VMware might've been around the $8 billion. But VMware was a completely different company founded in Palo Alto, storied history, they didn't have a subscription model. They tried to do cloud, they failed at that. Then they jumped on the bandwagon. And so, VMware just basically had the tried-and-true vSphere, they had a great install base and they tried software-defined data center, vSAN, NSX, and a variety of great things around it. Sanjay Poonen was here back then, they bought AirWatch. It was an ecosystem company, so the floor was packed. We probably have three full days of coverage, it was a very democratized ecosystem. That world is over. The new VMware under Broadcom is subscription pricing, simplified, one SKU, VCF, like one and a half SKUs, but for public sector and whatnot, but simplified the product, subscription, hey, software company, subscription's a good business model, check, cut expenses, double prices. Their shareholders are very happy, the employees that stayed got rich, but they've really been determined to shrink their install base to intentionalize around the largest enterprises and they're going hard after the private cloud, which is giving the cloud capability to the enterprises, which looks stupid maybe or not clear to some. We called it on theCUBE, I said they're going to merge their chip group, but... They sell chips, they know what's going on on the product roadmap, like Nvidia, and so they probably saw the AI wave coming, they saw the need for elastic resource on the enterprise. So I think Hock Tan and Charlie Kawwas and the brain trust at Broadcom on the chip side had the invisible hand into VMware, because if you think about it, the story hangs together, offer a cloud to an enterprise, no one really could do it.

Rebecca Knight

>> Well, this is really getting into the crux of the matter, and you have been very prescient about what the experience will be like, and we know that VMware has narrowed its focus under Broadcom, you've said what the experience has been for the balance sheet and for the employees who've gotten rich, the ones who still remain at least, I should say. But what about the customer experience, how would you describe what that's been like?

>> I think VMware's leaning into the ones that want to be leaning into VMware. So I think Hock Tan's philosophy is, look, we've got to clean up this business. He basically looked at it and said, "Why aren't we making more money?" So he did the old business thing and said, double prices, cut expenses, marketing all the sales departments. He's like, "Why should I have a sales department?" If I'm him, I'm like, why do I need a sales department? It's sells itself, this install base is de facto, so that's an easy cost. Double prices, go to subscription, revenue's off the charts, earnings are great, shareholders are happy. I think there's a lot of hate out there, because he basically said, "If you don't want it, leave," and I think what he's saying is, maybe the low end... Now, it's my opinion, he's not saying this, but they're intentional. They're like, we simplified the product. We promised you we're going to add some innovation and make it easier, like the customer from University of Bristol said to me on the launch of VCF 9.0, and they're doing it, they're delivering. Is it the most excellent software on the planet? Maybe not, maybe it's not going to rival CUDA for Nvidia in terms of the alpha coding, but it's good enough, it works as advertised and it's worth the money and they keep adding more and more to it, and that's their playbook and they're very transparent about it. It's not like there's a head fake going on here, Dave Vellante talks about this all the time on theCUBE pod, there is no head fake from Broadcom about what they're doing.

Rebecca Knight

>> Right, and exactly, and a lot of it is this intentional, deliberate approach, and like it or lump it, that's essentially what's happening. Talk a little bit about what you're seeing in the ecosystem. As you said, the VMware Explores of yesteryear are different from this show, and that is also intentional and part of the larger strategy of what they're doing.

>> I took a picture of the sponsor logos, and I'll just read to you some of the names, this will be a tell sign. First of all, VMware used to fund the ecosystem, in other words, pay people money for building on top of a lot of market development funds, or soft dollars they're called. And so, there was a very robust ecosystem and a lot of flow and goodness through, a lot of love, everyone made money on top of VMware, and I think Hock Tan's like, "No, no, we'll make our own money." But here's the new names, so what is the pattern? AWS, Microsoft Azure. Well, Microsoft, which is Azure and other things. Google Cloud, Intel, Dell Technologies, IBM, NetApp, Pure Storage, Rubrik, World Wide Technology, AMD, OV Cloud, NinjaOne, CDW, Presidio, and a bunch of other names, Insight Partners, Insight, that's a reseller, CDW's a reseller. So what that tells you is it's distributed computing and private cloud, those vendors are endorsing the fact that if VMware's going to keep a big part of their install base and Broadcom has the chips, it's going to be a force to be reckoned with, so they're all leaning into... Well, what if this continues? They make money. AWS will make more money with VMware not working with AWS, because you can just put your VMware in the cloud. In fact, I know a startup that's actually replicating VMware, and probably VMware doesn't care. So AWS will make more money, Microsoft Azure will make more money, because when you deploy a private cloud, you've still got to talk to the cloud and you've got to talk to the edge. So I think VMware is being intentional, being like, we're going to be cloud for enterprise, because the enterprises are buying NVIDIA, they're buying AMD, they're buying neocloud technologies out there. So the enterprises are building their on-prem AI stacks, their AI factories, and they're going to need to run their estate on there. So I think their pitch is clear, private cloud for the enterprise, and betting on AI and betting on the innovation and the risk management that goes along with it, so it's very intentional. And again, what the side effect is, the robust parties and the money being thrown around in the ecosystem is much more about certifications, hands-on labs. The labs here are much... I was just watching one of them, expert-led lab, it was packed, people grilled... It's almost like school, but not as many people, but they're the right people. So it's really interesting, Rebecca, it is complete 360 view, complete turnaround, it's just unbelievable.

Rebecca Knight

>> Yeah, yeah. Well, let's talk a little bit about VCF 9.0, because I know that theCUBE was there at the launch and interviewed University of Bristol. We're hoping to have him again on the show in the next couple of days. Broadcom is really pushing VCF 9.0 as this answer, and as you said, is it revolutionary, is it going to change everything? No, but it does what it says, as advertised, it works, it's a good product, and customers seem to be responding to that, and there is a good customer demand. So where are you seeing these newly-launched capabilities in June? It's been around for a while, but...

>> I think the VCF 9.0, some call it a beast. It's big, it's heavy, it's chock full of software, as the VMware guys say, Roger over there. But the goal of VCF 9.0 was to simplify the core offering, saying, "You get everything. If you don't use it, it doesn't matter, it's on you. You want VCF? You've got to take this other stuff." And then, he hoped that people activate that, that was the strategy. We covered that when they did the merger. The big thing is that a lot of customers don't want to leave VMware, they're staying on there. And when they run the math and they do a total cost of ownership calculation, they say, "Okay, it's going to cost more to shift training," a new set of issues come up, it's a whole nother transformation product, so it's easier to stay with VMware. I think that's why VMware's betting on the fact that, look, you don't have anywhere to go. It's not like it's extortion. Yeah, he doubled prices, but he's committing to resource, that with better technology, not groundbreaking, change the world technology, but operationally a better product. So they're betting on the fact that VCF 9.0 Will cover all the bases, simplify the product, and accelerate the customer's value. I said this on theCUBE before, and I don't want to compare Hock Tan to Steve Jobs, but Steve Jobs, when he took over Apple, I'll never forget, he gave that speech, he said, "We're going to simplify things. We're going to go back to the old ways of Apple," the creative campaign. But his comment was, one of the things he said was, "We have so many products," they just simpled it down to the iMac and that's it, and the MacBook. Then the iPod came out, then the rest is history, Apple transformed into a monster of a business. Similarly, with VMware, it was tons of product SKUs. You could buy this, you buy support, you get this, it's a free version for the ecosystem. It was a sprawl of stuff. They were still making a lot of money, but he just reined that in, one SKU, go.

Rebecca Knight

>> Taking a Therovian approach to technology, simplify, simplify, simplify.

>> His only thing that he has to deliver on is the promise is made on we will deliver value for the price increase, and that was the big thing that caused a lot of hate in the industry was, oh my God, he's jacking up the prices, a lot of people freaked out. Now, is Broadcom the best executing company? Yeah. Did they have everything buttoned up? No, but they fix it fast. That's what I've noticed about Broadcom. They're not the best out of the gate, but they move fast. That's on the VMware side. The upside to me in the analysis, Rebecca, is that they've got the chips. If you look at what they're doing on the semiconductor side, Broadcom and Nvidia are the two powerhouses. Obviously, Nvidia's got their strategy, Broadcom's got theirs. And they have a much deeper roadmap into what's going on in the hardware, and the best software right now is close to the hardware. So they're not saying this, but I can read the tea leaves, there's a lot of cross-pollination between the chip group and VMware, if not directly, the management knows where the puck is going. So I think Broadcom is making some good calls there.

Rebecca Knight

>> Excellent.

>> Is everyone happy? Absolutely not.

Rebecca Knight

>> Yeah. Well, it gets back to that customer experience. So I want to talk about the integration of Tanzu and VCF, and also read from what Paul Nashawaty, our colleague and analyst who really focuses on VMware, says, "The future of Tanzu is tied to its convergent with VCF and the emerging AI-native developer ecosystem. Enterprises no longer want fragmented platform services. They need a consistent, automated and Kubernetes-native experience baked into infrastructure. Tanzu's integration path is essential for modern application agility." Hot take. What do you think there?

>> Well, I think that's right down the middle of the fairway from an analysis standpoint. But he's right, it's critical for VMware. The question is, do I want VMware to provide that natively in the platform? If it works seamlessly out of the box or in the software, no problem. But many people might want to build that in-house, so they've got to be careful not to put their requirements onto the customer. So I would say the only wild card in that is that Kubernetes is a standard, so there might be better approaches. I don't know, so I would defer to Paul on that. But from what I've been talking to is that Tanzu is designed for those developers, because we hear from the customers in the ecosystem here, look, I want to run my application environments and control it with VMware. If you want a single pane of glass, that's a good approach, and I think it's not going to really impact them in a material way, Rebecca, because Amazon had the same problem with all their core services, the ecosystem had support. So I think there's a lot to learn from that, where if you want VMware only, that's going to be a good solution. It has to be native, for sure. If not, you can go with something else. I don't think VMware actually cares either, it's more of choice.

Rebecca Knight

>> I want to talk about AI and how you see VMware's role evolving in this AI era, what's your take?

>> Well, I think, again, I think the chip side is going to add a lot of value for VMware software, that's going to be not obvious to many, because I think it's going to be an internal thing. I think sovereign cloud, if I'm VMware's executive team, I'd be looking at the sovereignty equation, because sovereign cloud will create an opportunity for this private cloud positioning. Let me explain. Private cloud means here, enterprise, you've got your own cloud. But if I'm a large multinational company, I'm operating all over the world. So I want to run my cloud in my region, it could be even in a region with an Amazon or a Google Cloud, I want to have that estate contained, kind of like the University of Bristol was talking about. But now, I have global instances. So sovereignty means protection of the estate and the data behind it. AI is about data, that's about the IP inside the company. So I think VMware absolutely this year at Mobile World Congress will probably have a big approach to go in saying sovereign cloud has to be one of their North Star initiatives, because once you get sovereign cloud, you can then have interoperability across borders because sovereignty protects all the assets behind it. Once you get sovereign cloud, that opens the door to the hottest conversation in the DC circles, which is sovereign AI, who's running the AI, what's in the AI. So that problem is behind the requirements of checking the box on your infrastructure first. So it's almost like we're seeing the whole wave of infrastructure-as-a-service on the cloud, platform-as-a-service evolve. But right now, the AI game is infrastructure-as-a-service, it's chips, it's large-scale systems. So the sovereign AI conversation won't be as important as the sovereign infrastructure conversation. So I think that's going to be a sequence of events. But it's definitely hot right now, people are debating it, there's a lot of critical thinking going on around sovereign AI. So I think private AI with Chris Wolf who's working on, it's going to get some attention, but I think you'll see a lot more governance, risk management, how do I manage my data in these domains, whether it's international and whatnot. So sovereign cloud, check, sovereign AI happens right after, so that to me is a right-down main street for VMware to tick those boxes.

Rebecca Knight

>> Yeah. Do you think that there is a misconception about VMware's larger strategy in the marketplace?

>> Yes, I think there's a huge misconception, I think people don't get it. I think people hate VMware so much because there was so much love for the old VMware and-

Rebecca Knight

>> The nostalgic.

>> The nostalgic, the storied brand. But also, they were very community-oriented, and I think one of the smartest moves that Hock Tan made, outside the business logic that he did, which was phenomenal, go to subscription and then increase the profits, get the shareholders happy because that makes everyone happy, is he kept community. He was going to kill this event. He kept community, he just changed the event. It's much more of a marquee event. It's not the big numbers, so it's like 5,000 people, anywhere between 4,000 and 5,000 people, but they're the right people. So in the old VM world, it was like 20,000, remember the early days?

Rebecca Knight

>> Oh yeah, absolutely.

>> So I think keeping the event, keeping the community was a good call. And if they do change the event, he's still going to have engagement with the community, because if they don't get the certifications, they need operators. So I think if Hock Tan is smart, and he is, he's going to look at how do I get paid, which he's checked that initiative, but the certifications with VCF 9.0 is critical. If you don't get people certified to operate this stuff, you don't have the talent, even with AI coming, the human-in-the-loop will still be there. So I'm watching their certification metrics, that's one of my tell signs for Vmware, is if that kicks over, then they're going to continue to thunder along.

Rebecca Knight

>> And really, the theme of what we've seen in the last couple of years is that even these large storied technology companies, things change, especially as founders... Look at what's happening with Intel right now, lots of different tech, Microsoft for good or for worse, founders leave and new leaders come on and change things and the culture changes.

>> Rebecca, one of the things I'll add is that there's a new thing that's going to emerge, you're already starting to see it now, I think there's going to be an alternative universe for the old VMware Explore, and that is that I think VMware doesn't mind that people are converting to something else, because they're either a different customer profile, I think you're going to see a new cottage industry emerge around the migrations off of VMware, because there's still going to be more migrations coming. I don't think it's a zero. There are people migrating people, from a, I don't want to work with VMware as an owner or a principal, and then there's also the ones, I love VMware's new strategy, that's going to normalize. You're going to see a complete out-migration of VMware and into something else, like a Nutanix. And then, with AI coming around the corner, you're going to see a supercloud-like environment emerge, where someone will actually replicate all the technology within VMware and then have it up and running within weeks. I'm already seeing signs of that now with some startups.

Rebecca Knight

>> So looking ahead for the next 12 to 18 months, what are you thinking? In your mind, what are the milestones that you'd like to see, that the customers should watch for, that the market should watch for too, in terms of how this acquisition unfolds?

>> Yeah. To me, the keynote will be probably not as popular in terms of the flair, but I think it's going to be blocking and tackling. You're going to hear they have to do product improvements to maintain the subscription revenue, they have to add capabilities and some technology innovation around that, to, one, keep promises that they said, to keep subscriptions up, and make the capabilities for the modern era work. They have to get the certifications up on the operators and keep the community humming, which is VMUG. So I think those are the key things to watch. And then, watch some of the initiatives that get traction, how Tanzu plays out, how the private AI under Chris Wolf plays out, because that's clearly a top concern for the enterprises who want their own AI and how they're handling all that data. So that's the key metrics I would watch.

Rebecca Knight

>> Excellent. Well, John, I am so looking forward to getting into all of this and more with you on the next couple of days as theCUBE is here at VMware Explore, wall-to-wall coverage, exciting.

>> All right.

Rebecca Knight

>> Excellent. I'm Rebecca Knight for John Furrier. Stay tuned for more of theCUBE's live coverage of VMware Explore. You're watching theCUBE, the leader in enterprise news and analysis.