Broadcom's strategy doesn't prioritize innovation; instead, they rely on reducing VMware's costs to generate funds. Their growth primarily stems from acquiring companies rather than fostering innovation. For instance, if the VMware deal materializes, Broadcom's expenditure would be around $17 billion more than Intel's investment in IDM 2.0, aimed at revamping their fabs and introducing new chips to the market. Intel plans to allocate $60 billion to IDM 2.0, exemplifying a commitment to strategic investment.
Critics argue that VMware is unwieldy, but the reality is different. VMware has distributed $20 billion in special dividends to Silverlake and Michael Dell, funds obtained through borrowing. In such an environment, the only viable approach to fostering growth is investing in people who drive research and development for future products. Unfortunately, VMware faced constraints, and given the chance to operate independently with effective leadership for three or four years, it could have achieved a market cap comparable to Adobe. Regrettably, missed opportunities have left the company in a stagnant position.