Earlier quoted context omitted.
...absent functioning antitrust legislation, yes.
Is there an antitrust case to be made here? Antitrust means a lot more than just 'big company'.
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Broadcom to acquire VMware for $61B
71–80 of 430 posts
Re: Broadcom to acquire VMware for $61B
#72Oh no https://www.reddit.com/r/cybersecurity/comments/uxucz4/if_vm...
This feels way too pessimistic, VMware got big before open source virtualization took off.
I imagine someone could use docker instead of VMware in most cases, and if that's not possible then hire some people to make it so.
Vendor lockin is a scary thing, the people who are really going to hurt here are mega super corps who are now going to have to pay out the nose. If you're a smaller company, you should be moving to docker or another open source solution anyway.
Re: Broadcom to acquire VMware for $61B
#73Do these type of transactions ever end up well for either the acquirer or the acquired company?
The point of massive acquisitions are to enrich company stockholders (generally the CxO's and key management), lock up key engineering talent from the market, and give the manager who lead the acquisition a fat bonus. Generally, everyone else loses. To offset the cost, typically value is extracted from the bought company until the product's value dies. Short term-wise, the people involved will get a lot of money and be gone by the time the consequences cannot be ignored.
That said, acquisitions can work if there is due diligence. I'm in a company that has acquired several companies in a related field. Each of the companies have had complementary products, and the cultures were vetted to be similar ours before purchase, ie small groups (30-50 people) who have demonstrated high skill, high trust, and low ego. Finally, there has been an effort keep groups generally autonomous while finding ways to synergize employees and services. There has been a strong feeling of working together. Groups have been willing to share their expertise and experience with other.
I guess in other words: the acquisition is a good idea, even if a product is subsumed into another product, there is plenty of real work to go around for employees to do. If you have to promptly fire people "because redundancy," it wasn't being done to improve your position in the field.
Re: Broadcom to acquire VMware for $61B
#74Earlier quoted context omitted.
If intellectual property (specifically software patents) were weakened, this would be less of a problem, right? Companies don't buy companies, they buy IP, as I understand it.
Maaaaaybe. I am not a fan of software patents but intellectual property laws are the only thing stopping Big Company A from just cloning Small Company B's product. At least now they have to go to the trouble of buying them. Of course, it goes both ways and laws often favor the strong against the weak. But it is not all one-sided.
> intellectual property laws are the only thing stopping Big Company A from just cloning Small Company B's product
Is that really the case? Does it work? Isn't Instagram basically cloning TIkTok right now? and cloned Snap before that?
Apple with Alfred, Spotlight, F.lux etc are also examples. Seems like for software, either patents aren't utilized or simply can't be enforced.
Re: Broadcom to acquire VMware for $61B
#75Earlier quoted context omitted.
The EMC purchase of VMware was probably one of the best tech acquisitions of all time. At least financially. You can reasonably argue whether VMware's overall trajectory was better or worse as a result; in any case, most of the original leadership team ended up departing.
Someone knew something - that's an insanely low valuation for a major player in the (then just starting) virtualization market. But at the time virtualization was considered as something "to keep that old Windows NT server/software running" - not foundational for all cloud services ever.
As an IT industry analyst at the time, it may seem like a cheap acquisition today, but it was seen as pretty rich at the time. I'm not sure how many people appreciated how big a deal VMware was. My understanding is Diane Greene didn't want to sell but the VCs wanted their exit. And she was eventually pushed out when VMware hit it big and she was excessively chafing under EMC control.
Re: Broadcom to acquire VMware for $61B
#76Oh no https://www.reddit.com/r/cybersecurity/comments/uxucz4/if_vm...
Yep, that's Broadcom's business model ... buy a business (VMWare), ignore its smaller customers, upsell the Fortune 500 on the product (VMWare) to push out competing solutions, and keep the line items on those Fortune 500 bills growing. It's worked for them I guess. I left a Broadcom acquisition before the takeover.
It’s kind of par for the entire enterprise market as a whole similar to the structural problems of b2b companies. SMBs are hard to serve effectively and the margins are slim, so you’ll see companies that are b2b move more toward SMB b2b (see: Best Buy although Apple is the clear exception here). Everyone chases the big accounts because the model is less risky no different than how there’s no shortage of luxury homes being built.
Re: Broadcom to acquire VMware for $61B
#77Not sure I understand the expected synergies here. Broadcom's main business is making embedded chips for networking and storage devices. Is this just a pure diversification play?
Re: Broadcom to acquire VMware for $61B
#78Earlier quoted context omitted.
Is there an antitrust case to be made here? Antitrust means a lot more than just 'big company'.
You seem to be asking if there is a case within current legislation. Whereas the parent is suggesting that more cases ought to be covered by future stricter legislation (which could at least in principle be as simple as "big company").
So you put a cap in it, what happens, mitosis?
I’m not sure it would have that big of an effect. It would certainly help in some areas like search and social networks though.
Re: Broadcom to acquire VMware for $61B
#79Can we like... stop building these ginormous conglomerates? Thanks.
competition requires consolidation in order to acquire new lines of profit, it’s inevitable
Re: Broadcom to acquire VMware for $61B
#80I don't understand the stock market. VMW at $50B market cap equates to ~$120 per share. The Broadcom acquisition is for ~20% more, and yet, the stock price is at $120, not... $145 or something.
Can someone more financially literate (or with direct experience in the stock market) explain this discrepancy to me?
(comment made at ~9:33am ET, stock market opened a few minutes ago)