VMware Ventures into AI, But Keeps Focus on Core Business

Broadcom, the owner of VMware, recently unveiled that its VMware Cloud Foundation (VCF) platform is now “AI native,” marking a significant move to integrate artificial intelligence capabilities into its core offerings. This announcement, made at the VMware Explore conference, comes as Broadcom navigates the complexities of integrating VMware following its acquisition in November 2023.

The integration of AI into VCF reflects the broader industry trend towards leveraging large language models (LLMs) and AI-driven solutions. However, Broadcom’s strategy is unfolding against a backdrop of customer concerns regarding licensing policy changes and reported aggressive sales tactics. These issues, coupled with ongoing legal disputes concerning existing agreements, including perpetual licenses, have prompted some users to re-evaluate their reliance on VMware, with companies like Nutanix, SUSE, and IBM potentially benefiting from the uncertainty.

While the costs associated with migrating workloads from established, heavily virtualized VMware environments can be substantial, the long-term benefits of alternative solutions are also compelling. Broadcom aims to mitigate this hesitancy through making it easier for its users to deploy AI models and agents inside their existing environments, VCF 9, slated to ship next year, will come bundled with VMware Private AI Services, designed to provide the necessary components for building and running AI on-premise or outside of hyperscale cloud environments. This offering will include a model store (with an emphasis on open-source, smaller models for testing), indexing services, vector databases, an agentic AI builder, and an API gateway that facilitates optimized machine-to-machine communication between AI models.

One of the key challenges for Broadcom will be ensuring that the integration of AI doesn’t disrupt existing VMware deployments. Re-architecting the platform to deeply embed AI could introduce breaking changes that negatively impact end-user workloads. The risk of such disruptions needs to be carefully managed to maintain customer confidence and satisfaction. However, failure to provide a solution to enterprises who want to leverage their own data to train private LLMs would be a missed opportunity in the market.

Beyond AI integration, Broadcom also announced enhancements to the VMware Tanzu Platform, including simplified publishing of MCP servers and the introduction of Tanzu Data Intelligence, a new data lakehouse solution. This reinforces Broadcom’s commitment to providing a comprehensive suite of tools and services for modern application development and data management.

Another notable addition is Intelligent Assist for VCF, an AI-powered chatbot that leverages the VMware knowledge base to provide support to users. While this feature aims to improve response times and reduce the need for human intervention, its effectiveness will depend on the accuracy and comprehensiveness of the underlying knowledge base and the sophistication of the AI model.

The move towards containers and cloud services initially led some to predict the decline of traditional virtualization. However, legacy infrastructure continues to play a crucial role for enterprise users, compelling them to consolidate on existing platforms despite licensing fees and high costs. Broadcom’s strategy seems to be built around acknowledging this reality and offering incremental value through AI-powered solutions, while maintaining its core business.

In essence, Broadcom is strategically positioning VMware for the AI era, while recognizing the importance of preserving its existing customer base and revenue streams. The success of this approach will depend on its ability to deliver compelling AI capabilities without disrupting existing environments and navigate the complexities of licensing and customer relations.

(Image source: “Virtual Try On” by jurvetson is licensed under CC BY 2.0.)