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As part of the VMware deal, Broadcom has committed ‘guaranteed access’ to interoperability APIs for the next 10 years.
The European Commission has approved a Broadcom bid to acquire US cloud company VMware for a whopping $61bn, provided the hardware giant complies with interoperability commitments.
First announced more than a year ago, the deal was brought under EU scrutiny last December when the commission launched an in-depth investigation after concerns the deal would allow Broadcom to restrict competition in the market for certain hardware components that interoperate with VMware’s software.
EU competition chief Margrethe Vestager said at the time that an initial investigation found that it is “essential” for hardware components in servers to interoperate with this software.
In its statement of objections earlier this year, the commission said it is “concerned” that Broadcom may restrict competition in the markets of FC HBAs (fibre channel host bus adapters) and storage adapters.
It argued that Broadcom is the leading supplier of these products and said the markets are “very concentrated”.
Now, conditional upon full compliance with the commitments offered by Broadcom, the deal has been given the green signal. It was announced by the commission yesterday (11 July).
The Broadcom Software Group will rebrand and operate as VMware, incorporating Broadcom’s infrastructure and security software as part of an expanded VMware portfolio.
As part of the deal, Broadcom has committed to “guaranteed access” to the interoperability APIs as well as to the materials, tools and technical support necessary for the development and certification of third-party FC HBAs.
This also includes access to the source code for all of Broadcom’s current and future FC HBA drivers through an irrevocable open source license.
Vestager said at the latest announcement that Broadcom holds a “very strong position” in the market for the supply of certain hardware components and that VMware is a key server virtualisation software provider.
“By acquiring VMware, Broadcom could restrict or degrade interoperability between VMware’s leading server virtualisation software and some competing hardware components,” she said.
“But the commitments offered by Broadcom will enable its only rival, Marvell, to continue competing on equal footing and ensure a similar protection for any future entrants.”
The full compliance condition as part of Broadcom’s commitments will be in place for the next 10 years. However, the acquisition deal is still under investigation in the UK and the US.
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