News

KKR Buys VMware's Virtual Desktop Business from Broadcom for $4B

• By Gladys Rama
• February 27, 2024

There's yet another new chapter in the VMware saga: Its End User Computing (EUC) business, which includes several enterprise virtual desktop staples, has been divested by current owner Broadcom.

Specifically, it's being sold to investment fim KKR for $4 billion. KKR this week announced its plan to acquire EUC from Broadcom and turn it into a "standalone company, with greater access to growth capital and a dedicated strategic focus on empowering customers and partners worldwide with innovative digital workspace solutions."

Broadcom came by VMware's EUC unit through its $69 billion acquistion of the storied cloud and virtualization company, which closed at the end of 2023 after over a year of regulatory wrangling.

Since officially acquiring VMware, Broadcom has taken several steps to lighten its load, from killing perpetual licensing for dozens of products, to icing out VMware cloud partners, to laying off thousands of people. This latest step -- the divestment of EUC to KKR -- is expected to be finalized later this year, depending on regulatory approvals.

EUC encompasses two workhorse VMware remote work products: Horizon, a virtual desktop infrastructure (VDI) solution, and Workspace ONE, a "digital workspace" platform. In its post-Broadcom form, the EUC will continue to be led by its current GM, Shankar Iyer.

Once it acquires the business, KKR is promising a greater focus on R&D and "new strategic partnerships," as well as "significant investments across go-to-market functions." It also plans to start an "employee ownership program, which makes all employees owners in their respective businesses alongside KKR."

In public statements, KKR and Broadcom both conveyed optimism about EUC's fortunes as a standalone company.

"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 KKR managing director Bradley Brown. "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."

Meanwhile, said EUC general manager Shankar Iyer in a blog post, "KKR is an ideal new strategic partner with the experience and resources to help us achieve our potential as a standalone business. They are one of the most active investors focused on building leading global technology enterprises."

In an internal memo viewed by Business Insider, EUC vice president of revenue Robert Ruelas tasked EUC employees with communicating with current customers about the upcoming changes, and expediting customer "renewals and add on orders."