Dumb or not, getting rid of their smaller customers and jacking up prices for their large customers is exactly what Broadcom said their strategy was going to be immediately after they bought VMware. They are in the execution stage now, it shouldn't come as news to anyone at this point.
Is AT&T is an example of a smaller customer?
No one said the strategy was working!
They did the calculations but unfortunately they were not good at math.
Oh but they'll pay for couple of years at least.
No, but neither AT&T migrated yet, or ever.
Extract as much value as you can from a quickly depreciating asset before you dump it.
Makes so much money.
The thing is, this asset wouldn't have depreciated so much if it weren't for broadcom.
It’s a shame that VMware allowed this to happen. Yes, it’s just business, but talk about not giving a fuck about who acquired them and what was going to happen to their product.
Broadcom follows the private equity playbook: hike prices and reduce expenses. Customers will leave until only the most locked in remain. This extracts value from the business and makes it more capital efficient. Broadcom will continue to extract value until only a husk remains.
At 300% or 1000% rates you might make more in a few years it takes customer to move than you spend on acquisition. At that point, well you are still getting paid or you roll it out to someone else again and still recover part of cost if tech is still good enough.
Squeeze as much money from the customers until their pain is big enough and they migrate away from VMware.