Mastermind of Broadcom’s VMware buy is out, CEO Tan to take over software

Chip giant takes an add Hock approach

Updated Broadcom CEO Hock Tan will personally oversee his company’s burgeoning software portfolio following the departure of Thomas Krause, the masterminded behind the $61 billion VMware acquisition, later this week.

According to an SEC filing released today, Krause, the president of Broadcom’s software group, will leave the chip giant on Friday to pursue a role at an unnamed enterprise software company. Upon his departure, Tan will assume Krause’s responsibilities, and the position of President of the Broadcom Software Group will be eliminated.

Krause is widely seen as the architect of Broadcom’s proposed VMware acquisition, which he portrayed as the centerpiece of Broadcom’s software strategy in a blog post last month.

Prior to running Broadcom’s Software Group, a position Krause held for less than two years, he briefly served as VP of corporate development before taking over as CFO from 2016 to 2020.

In the SEC filing, Broadcom emphasized that Krause’s departure was “not the result of any disagreement with the company or management on any matter relating to the company’s performance, operations, policies, practices, or financial statements, including its controls or other financial related matters.”

The dissolution of Krause’s position at Broadcom isn’t all that surprising either given the semiconductor giant's previously established plans to merge its software group under the VMware name and incorporate its existing infrastructure and security software holdings — including CA and Symantec — into a single expanded portfolio.

These plans have left VMware employees and customers uneasy about VMware’s future, especially given Broadcom’s track record for focusing on a small subset of large enterprise customers, a strategy for which Krause is directly responsible.

At a Broadcom event in November, Krause offered a glimpse at the corporation's software strategy, which involved pursuing the company’s 600 largest, most regulated, and risk-averse customers, because they’re the least likely to change suppliers.

Krause’s departure calls into question whether Tan will keep with that strategy or chart a new course with VMware at the helm.

The announcement marks the latest wrinkle in Broadcom’s enduring push into the software sphere. The news comes just a week after Broadcom cleared another hurdle in its bid to subsume the virtualization giant after rival bidders failed to materialize within allotted 40-day “go-shop” period.

Broadcom is now clear to proceed with the transaction, and pending regulatory and shareholder approval – Europe, for one, is sticking a probe into the deal – is expected to close by the end of the chipmaker’s 2023 fiscal year, which ends in November.

The Register reached out to Broadcom for comment; we’ll let you know if we hear anything back.

Apropos of almost nothing, at the start of July it was announced Chip Childers is joining VMware as Chief Open Source Officer. ®

Updated to add

Krause is joining a combined Citrix and Tibco as chief executive officer, it was announced on Monday.

The Citrix-Tibco merger is expected to complete in the third quarter of 2022, if regulators don't hold it up, which will take Citrix private.