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February 26, 2024

Broadcom to sell VMware’s EUC Division to KKR for $4bn

The sale of EUC Division comes amid a drive by Broadcom to simplify VMware’s product portfolio after it bought the business last year.

By Greg Noone

Broadcom will sell VMware’s End-User Computing Division (EUC Division) to the private equity firm KKR, it has emerged. The deal, valued by KKR at around  $4bn, comes amid a broader push by Broadcom to simplify VMware’s overall portfolio of products and services as it pivots to a new subscription-based sales model. According to KKR, the EUC Division – which sells the “Horizon” virtualization platform and “Workspace ONE”, a united endpoint management platform – will remain its own company and continue to be run by its existing management team. 

“Workspace ONE and Horizon are best-in-class platforms chosen by many of the world’s leading enterprises to create seamless and secure digital workspaces with interoperability across increasingly complicated technology stacks,” said Bradley Brown, Managing Director at KKR. “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.”

An image of the KKR logo, used to illustrate an article about its acquisition of the EUC Division of VMware.
KKR is buying VMware’s former remote software management unit, EUC Division, for an estimated $4bn. (Photo by IgorGolovniov / Shutterstock)

EUC Division sale greeted positively by own workforce

Broadcom’s EUC Division primarily specialises in the provision of remote access software solutions. After buying the unit’s parent company, VMware, Broadcom announced its intention to spin off EUC in December as part of a wider effort to simplify the product portfolio of its new acquisition. It has found an enthusiastic buyer in KKR, a global investment firm that also recently bought Alludo and its virtualisation software platform, Parallels. 

“KKR would be getting an incredibly good deal for a $1bn business that has a very competitive stack of technology for not only delivering virtualised desktops and applications but also managing a wide variety of devices,” an unnamed executive at a virtual desktop infrastructure business told ChannelWeb. “This is good news for VMware EUC solution providers.”

Broadcom overhaul of VMware continues

EUC Division’s own general manager, Shankar Iyer, also sounded confident about the business’s impending takeover by KKR. “We are confident that this pending transaction…will create enormous opportunities and benefits for our customers, partners and employees,” said Iyer. “The KKR team knows our industry well and is the ideal strategic partner to help us become a standalone company.”

Less positive has been the general market reception to Broadcom’s shakeup of VMware after its acquisition was finalised late last year. Several products and services have been cut since November 2023, including VMware’s program of perpetual licenses, ditched by Broadcom in favour of a subscription model. While the chipmaker has argued that this represents a simplification for consumers, a vocal minority of users have said that they anticipate significant price increases for VMware licenses under the new arrangement. 

Read more: VMware dumps free ESXi hypervisor

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