Why Broadcom is offloading VMware’s end user computing division

Broadcom has confirmed plans to sell VMware’s end user computing (EUC) division to global investment firm Kohlberg Kravis Roberts & Co (KKR) as part of a $4 billion deal. 

Under the terms of the deal, the EUC Division, which was originally an arm of VMware prior to Broadcom’s acquisition of the company in November 2023, will now become a standalone company.

KKR confirmed the unit will now have a “greater access to growth capital and a dedicated strategic focus”, allowing for further development of the business. 

The EUC Division will continue under its existing management team, though KKR are looking to expand research and development capabilities, as well as pursue “new strategic partnerships.”

Broadcom’s decision to sell the platform marks a significant move, as this segment led the way in terms of its digital workspace offerings. Through a variety of products, the division allows organizations to securely deliver and manage remote-work systems. 

Its key products include Horizon, a desktop and application virtualization platform, and Workspace ONE, a unified endpoint management (UEM) platform designed for enterprise-level use. 

“We see great potential to grow the EUC Division by empowering this talented team and investing in product innovation, delivering excellence for customers and building strategic partnerships,” said Bradley Brown, managing director at KKR. 

Shankar Iyer, SVP & GM for the end user computing division will remain following the deal. Iyer described KKR as an "ideal new strategic partner" for the unit. 

“They are one of the most active investors focused on building leading global technology enterprises,” he said. “Most importantly, KKR believes in the unique value that our technology delivers to our large and loyal customer base, and they are eager to invest in our mission to become an even more innovative and customer-centric organization.”

VMware is not having a good time

The move from Broadcom forms part of a consistent pattern since its acquisition of VMware in late 2023. 

Broadcom first announced plans to acquire the tech company in 2022 as part of a $69 billion deal, which eventually gained regulatory approval in November 2023.

Since then, the floodgates have opened, with Broadcom introducing sweeping changes to a range of products and the way customers interact with the firm. 

Perpetual licenses, for example, were among the first of the major changes unveiled by Broadcom. In December, the firm confirmed plans to cut VMware perpetual licenses as part of what it described as a “simplification” of the VMware product portfolio. 

This has since been followed by a host of other product and service cuts. January saw VMware’s Aria SaaS offering become the latest victim of Broadcom’s relentless campaign of product “simplification”. 

Over 50 standalone cloud services were confirmed for the chopping block at the time and this has since grown.