[colechristensen]

Private equity... or Broadcom... bleed dying things dry. It's arbitrage on companies that are too slow to adopt new technology. Instead of watching something die slowly squeeze it for everything it's got by making the inflexible companies pay for their inability to change.

The end of a dead product is the same, but the financial reaper is betting they can make more money killing something quickly.

[me_again]

Was VMWare dying prior to the acquisition? I don't really know the financials but that wasn't the impression I had.

[hungryhobbit]

No, but Broadcom didn't buy them to build a company over time. They have a long pattern of buying a tech company, jacking up the prices, and making enough money (before customers switch) to more than make up for the purchase price of the company, netting them a tidy profit. Plus, at the end what they're left with isn't completely value-less either.

Everyone who followed Broadcom (and that included many VMWare employees) knew exactly what was coming the moment the acquisition was announced.

[colechristensen]

VMWare din't have a growth trajectory and didn't have a reasonable expectation of one.

You don't make these kinds of sales when you're circling the drain, you do it when you can see that future coming for you.

[jcgl]

But they were a mature company. Why would growth be the expectation?

Note: I’m not asking for the Reddit armchair kvetching about the evils of modern capitalism and the failings of line-must-go-up. I’m wondering why, when serious financial decision-makers are involved, it makes sense to blow something up rather than steadily take profits over time, even if those profits aren’t always going up.

[colechristensen]

Because more than sales growth also technology growth was done. Nobody new is excited to use VMWare, the only big significant customers of VMWare are the ones it already has. At best you get a trickle of new customers already so accustomed to your product that they don't want to figure out something new. All of that is a sign for a long term slow death where to stay profitable you have to slowly lower headcount and raise prices.

Like a sitcom in the 7th season or a champion fighter approaching 40 you quit near the top.

[wolvoleo]

Dying no, but their business certainly had a downward trend on it since so much is moving to containers instead.

[jcgl]

Doesn’t VMware have Tanzu, a container-based offering? Why not keep trying to adapt?

[wolvoleo]

They do but they missed the boat on it. Docker is the standard now, and Kubernetes.

But it doesn't matter anymore now, Broadcom's strategy is to drive the company into the ground while extracting as much as possible during the death spiral. So any future strategy is no longer relevant.

[stuaxo]

Should be a rule that when this happens and these companies fold that everything is open sourced - at least we'd all get something out of it.

[nradov]

Totally impossible. Closed source software often contains IP licensed from other entities. Just because a company folds doesn't mean they can violate licensing agreements.

[snackbroken]

> Just because a company folds doesn't mean they can violate licensing agreements.

It does if that's the law. Every jurisdiction routinely overrules contracts as unenforceable on the basis of some overriding law, so it wouldn't even really be that unusual. Whether it's a good idea or not is another question and one that depends almost entirely on second, third and higher order effects.

There probably is a world where all software is libre software and we still see similar rates of development, but it's not at all clear how you could get there. Especially not if you cared about the damage caused by upending the business models of a significant fraction of the world economy.

[nradov]

Nah. No jurisdiction is going to violate the IP rights of a separate company just because one of their customers or partners is forced to liquidate.

[steveBK123]

The biggest blocker there is probably whatever remaining creditors to the company when it goes under then have claims on remaining assets like the software.

One solution would be putting something in the tax code such that donating the code to an open source foundation gives a bigger benefit than simply writing it off as a total loss and destroying it.