How AI and Broadcom Are Shaking Up Tech

Hey, everybody. Do you have AI Coding Envy? You're watching Textron Gang.

Hey everybody, and welcome back to the Techron Gang. We have our usual lineup of folks talking about three of the most compelling topics of the day. Let me start with our friends from Futura.

Mitch Ashley is back. It's been a while. It's been a minute since you've been on the show, Mitch, how you doing?

It's been a minute. You know, I, I tackled that guy running outta the seven 11, you know, stealing some stuff and I injured my shoulder. No, I didn't really, it's just, you know, my shoulder and some shoulder surgery.

Nobody believes that story when I tell it anyway, so I'm gonna have to stop telling it, but doing well, doing here. Well, here in Colorado. So are you going in for Tommy John's surgery?

And, you know, when will you be back on the mound? Well, you know, it's supposed to be out there throwing some balls next week, so we'll see. We'll see what my recovery looks like.

I wouldn't count on me up on the mound anytime soon though. Uh, Warming up. Also, guy Courier from Futurum joins us once again, guys still in Austin, I believe.

Is this the longest you've been in Austin for a continuous stretch now? It almost feels like it's been like 10 days. Uh, it's, I think it's been over 10 days.

Um, I was actually slated to go, uh, uh, go to a, uh, a vendor conference, uh, this week, and thankfully I was able to cancel that. Um, so yeah, it's, uh, it's, it's been maybe two weeks since I had to go anywhere. And I looked at my June schedule and it looked pretty good, so I'm pretty happy about that.

All right, guy courier breaking vendor hearts once again. So who knows, man. All right.

Usually I break their hearts by working for them, but anyway, there you Have it. And also still north of the border. Chris Blas, how you doing?

I'm loving life, Mike. How are you? I'm well, no issues.

I'm also down here in Boca Raton in the studio for one more day. I'll be heading back to New York after this, so tomorrow when you see me, I'll be back at my usual New York environments. But let's start jumping into the topics of the day.

Mitch Ashley, I swear a year ago I was amazed and overall by all this AI coding stuff. Now I wake up every morning and there's another tool, it's just like one right after the other. And I'm trying to figure out if these new tools, these, uh, players and startups are gonna take over this whole app dev DevOps conversation, or will the incumbents win this argument and win the day?

And you have a report that kind of talks about the level of investments that folks are starting to make agent AI already, as far as AppDev is concerned. Anyway, um, walk us through what's going on here, because, um, I also have a third possibility, but let's just go through the report a little bit. Okay, great.

Yeah, no, it's, it's an interesting, actually a fascinating space to cover because I can't write something and have it be current by the time I publish it. It, there's three new announcements that I don't, I should have talked about if I would've waited. But then again, there'd be three more after that.

So it, it, it's, it's pretty fascinating. I mean, you have some very new players, you know, the folks like, um, the code now cursor, uh, products, uh, the windsurf that's gonna be acquired by Open ai, but you have, you know, existing players, Microsoft GitHub of course, combination of that. So it, it's, and then you have no code, low code players.

There's a lot of things happening in this market, but as I looked at it, what I'm telling people right now, telling vendors, if you aren't engaged in figuring out more than just what your AI strategy is, but putting to work and figuring out how you can make it useful, beneficial, maybe improve the work that's being done by whatever your constituent, uh, personas are, whether they're testers or software engineering people, or people doing software, security operations, platform engine, you name it. Now's the time to engage. Because what I see is the, the level of engagement, especially on the development end where things obviously start, uh, in terms of creating software, is pretty phenomenal.

It, the, the, the iteration cycle from vendors is very short. Kinda like DevOps cycles, you know, they shorten their product cycles so much and they're also doing essentially alpha betas, but they're doing, even earlier they call 'em public previews or research previews. And, you know, even at Microsoft Build a couple weeks ago, you know, they were very upfront and say, we've got, we just GAed this, but we've got these other things that are out there now in public preview.

We wanna hear what you like, we wanna hear what you don't like, tell us. 'cause we'll fix it. There's a lot of in, in-field learning that's happening both by practitioners and vendors at once.

So, number one, get engaged and, and you have to learn by doing this is not, let's lay out a strategy and just kind of, uh, carve the course, you know, keep the situation normal and we'll add this into our product in the next release. Six months from now, there may not be an opportunity for you. I'm not saying panic, but I don't think passively waiting from the vendor standpoint.

Now, the practitioners, not everybody's jumping off the deep end in vibe coding, right? It, there are definitely people on the front end on the leading edge that are leveraging these tools, but there's a lot of people that are benefiting from even just within BS code and code completion and doing some early code generation kind of capabilities. But as more things get automated, especially with agents in the development process and, and expanding down the SDLC, that's when I think we're gonna see the big improvements in productivity.

I'm kind of caught in a couple of different thoughts on this whole thing. So in my mind, every coding tool is gonna have ai, I mean, at some point it's just standard operating procedure becomes a, a core capability. If you don't have it, probably won't exist.

The part I'm trying to figure out is, so will my existing DevOps platforms get these AI agents and then that will become the mechanism that I use to manage all that. Or will there be some sort of like higher level of abstraction of AI agents that leverage across all these different platforms, and that becomes the thing that I'm gonna standardize on. And I don't know, maybe that thing talks to various AI agents that are made available by the CICD vendor or whoever happens to have a particular agent, but trying to figure out where is that orchestration of the DevOps workflow gonna be?

Do you have any thoughts? Yeah, yeah, definitely. It, it's, you know, that's a big challenging problem to solve, especially across vendor, how you orchestrate agents and how you share data and information.

Even with MCP is a, as an open standard that's evolved. Definitely what's happening is every vendor is adding AI agents automation capabilities to their own product, which I think makes sense right now. It's a little tough for one person to step in and say, we're gonna orchestrate all those things.

I think that will happen at some point. But the thing that's also not happening is you don't see the big players saying, if you're gonna be in our ecosystem, say a Microsoft ecosystem or a Google or AWS, you have to use all our stuff, right? We're gonna, we're, we'll, we'll integrate with other people, but not, not with the same fidelity as our own.

No, they're pretty much leaving it very open knowing that they've gotta work in a cross vendor, cross technology world. Whether it's the models that you're using, generate code, the models that are now coming out for automation around what they're calling agentic dev DevOps, you'll see that agentic tied to everything here in product names, um, as well as just AI capabilities with their own tools. I think the big difference is, you know, the chat bot and the natural language querying stuff and giving some basic instruction to, is kinda the entry level of AI today.

We'll see interfaces start to change as you're managing more work that bots are doing, rather than you taking their output and putting it to work yourself. You know, Mitch, your call to vendors to, you know, it's kind of like adopt or die, but maybe even ratchet it up a little bit. Um, you, you say it in that silky voice of yours, but it really is a, uh, quite a, um, a call to arms.

Um, but the other half of it, and you've written about this, you just didn't mention it a moment ago. The other part of it is, you know, don't do it without forethought understanding of how, how, how AI helps and potentially harms. And most importantly, with thoughtful expert human supervision of the whole thing.

That's a key corollary to the, that's, and it's getting Chris all agitated, uh, for those listening. He is been nodding vigorously as I say that. Um, so, you know, that's the, what a, a really interesting twist here is the, the vendors are practitioners as well.

So you, you talked about practitioners, you're talking about, you know, what I would think of as enterprise practitioners, um, although they go, you know, down to like partners and, and even, you know, medium sized businesses or, or the, the, the, uh, service organizations that do development for them, um, that would be pure practitioner, but the vendors are practitioners themselves. There's, there's a lot of, yeah, there's a lot. This, this, this, this has a huge landing zone, not landing zone damage circle, or whatever you wanna call It.

Blast radius. Yes. See, blast Radi radius.

Thank you. Let's let Chris jump in. Good.

Go ahead. I, I wanna respond to what you're saying, guy, but I wanna hear what Chris is thinking too. Well, thank you, Mitch, because as guy said, you do in fact to have a silky voice.

And I think the thing that, my comment is, I can hear in all of you, you know, there's this confusion, this, you know, this narrative space where we're talking about how we're using AI to develop tools, and with three of the world's leading experts, there's a, how we actually get there, right? And I think you all touched on points of it, you know, that this isn't just a tooling race, it's a trust war. And the winners aren't those who ship the most ai, they're the ones who make it safe, visible, and native to the developer's psyche, right?

You know, these tools will do wonderful things, but if you're not comfortable with doing them, it doesn't really matter. Yeah. I, I'm actually preparing a piece right now, um, based on, uh, what I've observed of the, the, the, uh, data analytics vendor click over the last year or so.

They created a trust council. I, I'm not, you know, gonna, you know, flog their, their particular strategy. But it was a nice jumping off point for exactly what you're talking about, Chris, uh, which is this visibility side, this transparency side of things, um, critically important.

So Mitch, how long does it take? How long does it take a DevOps team to bring in a new tool and adjust their workflows? 'cause it seems to me it takes a good year to kind of wrap your head around that.

It's not like I go out and buy a tool and just slam it in. At least I don't think so. So, um, what's the curve of actual usage in DevOps workflows, especially with a lot of tools that are quote unquote available in preview?

Well, uh, the way I would think of the progression, Mike, is individual tools. Things that aid you in your IDE that you use as a developer or whatever tool is a, as a tester. So AI is introduced within the tools that you use.

And now we see, um, agents and automations, some agent capabilities that automate more processes than just generating code, generating code's. Actually a small part of developing software, believe it or not, uh, that's probably, I don't know, less than 25%, maybe, maybe even 10 or 15% of the work. So what's happening now is some of those individual tasks are being automated.

The next step is automating workflows across different teams. Um, PL cloud, cloud, for example, uh, and a DevOps automation platform just came up with their, their AI announcement. So you're starting to see more DevOps products introducing it, not just development tool products.

And I think the third step is really true. Pipelines workflows across an entire SS SDLC process. Everything from security to generating code, to testing to scaling and performance, and all those things that go into it, that, that's sort of the nirvana where I think we wanna reach.

We're, we're far, far from that, maybe far six months, no, it's not gonna be six months, but we're, we're not there yet. We're still at the individual tool kind of bumping into the doing automation for individuals and starting to do automation for teams. So to your question, it's really a personal endeavor.

Not to say you don't get support from your management or your company or a team for doing it, but it's, it's a learning curve. It's like, oh, there's this new thing called relational database. How does that work?

Let's figure out how we should use that. As opposed to the other structures of databases we use, oh, there's no code. Now, how do we use that?

It's kind of that process, that kind of adoption curve, but for all of how you create software. So whether you lean into it and do vibe coding, or you kind of just gradually take it on a little bit more and more. Yeah.

And I would say that, uh, that, that, you know, at least from the practitioner slash enterprise side, you know, this is, we're gonna see 80 to 90%, maybe you already had 80%, and I don't remember off from, from the research you've done, um, using these, using ai, but if you think about the application estate, it might only be 5% of it. I mean, this is a whole new, we need a new word for it. It was the digital transformation refactor or reto or whatever.

Um, that's been well underway. And we might have 20% of applications now that are cloud native or cloud native ish in a typical way. And that's a made up number.

But it's, it's, it's the really the minority. So the part of this that, uh, leaves me scratching my head is, so there's a bunch of these startups and historically, you know, venture capitalist port money and startups, and if they made it to an IPO, that was the exception, generally speaking, they got acquired and rolled up and put into some other incumbent vendor. However, when I talk to the incumbent vendors in this space, they're all pretty far along on their own development efforts.

And I have to wonder if a lot of these startups are gonna have the wherewithal to make it long term or even get acquired because the incumbents are moving faster in the age of AI than they have historically. And I think they're not suffering as much of that innovative dilemma. But guy, what's your take?

Well, I'm glad you turned to me because I wanna compliment Mitch on another thing before I attack him. I'll attack him in a minute. Um, the, the listen, um, you have provided, um, a really helpful framework for AI adoption and coding, which is, uh, or in the applications really, which is the AI enhanced app, the, uh, AI driven app and the AI native app.

And when we are talking about development platforms, there are some that are being enhanced. There are some that are agentic relatively new, that's AI driven. That's, that would be maybe the vibe coding concept.

Correct me if I'm wrong. And then lastly, this, uh, this AI native. Um, so Mike, to answer your question, um, to what degree do these incumbents, um, intend to essentially recode all the way down to to, to the silicon actually, um, in order to create something that's AI native, the AI enhanced stuff has, has serious limitations.

They're partially security related, but mostly have to do with scale and volume of data. They run on infrastructure that's not necessarily built for, let alone the size, just the, the data usage patterns that come with ai. Um, so they tend to incorporate services a lot of the times.

These are cloud-based services, which has their, have their own sources of latency or unavailability and all that other sort of thing. Um, my sense is that Microsoft is, is trying to do this with GitHub co copilot, that they're essentially re re both recoding and refactoring that entire platform to turn it into something that's AI native. But my point, Mike, is that not everybody is Microsoft.

There's lots of players here. Maybe Oracle can do it, Microsoft is doing. Um, but otherwise, um, there actually is a fair amount of, of space for like the tab nines of the world or whatever, these more recent, um, AI native code platform companies to follow the exact path you are like, like you laid out sort of classic path.

Um, and also in general in this, you know, hyper capitalistic environment that we are in. Um, which by the way is not an insult. I support this.

Um, we have a great deal of difficulty predicting such things as a change in these models because there are so many, you know, there's plenty of VCs out there, you know, willing to invest. And still in these sort of platforms, you put AI on it, they're willing to invest. So I, I think I see your point, but my guess is that we don't know what we don't know there, and there's gonna be plenty of the same model going on.

Right. Mitch, last word, last Mitch, last word on this subject. Uh, you know, I think there is plenty of room for acquisitions, even though the big guys, well, you know, everybody is starting to address it at different paces.

Um, I think part of that is, you know, fomo if you're being left behind also. But there, there's, so, I mean, take open ai, right? Acquiring windsurf, right?

They had their own AKs that they created for developing software, but recognize that, you know, for them to go and, and build a new kind of vibe coding IDE as opposed to a traditional IDE, uh, or a AI native IDE, which is kinda where, where the ides are headed. Um, that would be a big lift. So when just by somebody, just bring them into the fold.

Microsoft has required people along the way. So I don't, I don't know that there's any less opportunity. I, I think this normal thing will happen, Mike, of early people into the market.

People are in the top three, you know, as Alan and, and Lex to quote Brad Feld often. Um, but it's the people that come much later that is, is really questionable. Whether what the opportunity to get acquired or go public then is, you know, the, the third generation of startups that kind of solving the same problem, but unique twist on it in some little weight.

Maybe it's interesting. Maybe it's not. All right, ladies and gentlemen, place your bets.

'cause we're about to find out how well this is gonna play out. We'll be back in a minute. Hey folks, we're moving on to the next block in our little trio and we're talking about a report from our friends over the Futurum group that kind of shows what people are thinking about.

A, the level of spending of on cybersecurity is roughly on average, 11% of the IT budget. And I think that's pretty standard. I hope that's standard.

Um, but it also finds that about half of the folks are trying to some degree to reduce the number of vendors they have a quarter or however, or adding vendors in the s seemed to be just standing pat. Chris, we've been talking a lot about the platformization of cybersecurity and this battle between best of breed tools and the centralized platforms and the arguments that go on back and forth in this thing. It would appear that, um, folks kind of at least prefer some centralization, but it doesn't look to me like it was a massive wave.

But what's your take on what's going on here? Or is this just an argument we have every three or four years? Uh, I fully start with that one.

I think, yes, this is an argument we have every three or four years. Yeah, lemme refer back to what I said in the last segment. You know, this isn't a tooling race, it's a trust race.

And people seek, you know, we like centralized platforms when it can say little confusing because we have turned to one spot. Um, but particularly in this space, as we go on the go, continue on the path of tying, weaving, cybersecurity and and AI together, you know, the, the trust of the human part of it has to be the point. You know, can you, can any of these vendors make the tools?

Yes. In fact, with a $20 a month Chad, TPT license, if you train your engine properly, you know, to to the last segment, you might be able to make the tools. So early movers platform, you know, uh, um, range anxiety.

Sure. Um, but at the end of the day, the, the vendors or the constellation of providers that will hold the ground are the ones who understand, you know, to actually implement the trust. Mitch, what's your take on the trust factor?

Because to me, part of that trust has been, well, there isn't a lot of trust in these platforms. 'cause everybody complains about the number of false positives and the volume of alerts that they get. So, you know, when I talk to a lot of folks, they have like two of everything just to double check one or the other and see which one they believe in.

It's sort of like the money python, holy grail search for the holy grail of single point of truth or single glass of pain, as I like to say. You know, seeking that sort of nirvana of having one thing, that one ring that rules 'em all that will solve, make it easier. And what it's really is, is it's a reflection of the complexity of how difficult it is to bring all those different data sources together.

Um, I was mentioning in the last segment about the development tools of the vendors being much more open to a, a broader ecosystem than just trying to own the customer all on their own platform and their own tools. Even saw this, uh, similar kind of announcement at RSAC with, uh, Splunk talking about, you know, we realized we can't put all all the data in in our product as much as we, this is my words, like to do that and charge you for it. Um, where they're adding capabilities to go access data, where it is and how it's located.

You can see that in MCP servers and software development. So I think it's all about trying to, first stage is just getting the information you need to understand to triage what's happening, understanding what the problem is and how to, how to start addressing it. If, if AI is gonna be a part of this role, I think it's, it's gotta take us out of the giving us better and, uh, more, more accurate information to actually helping us do it, do the work.

And, uh, that's I think probably more than the benefit we wanna seek next than just trying to have one thing that's gonna tell us all the, the right answers about everything. I kind of felt like the, um, the, the, the research on both revealed and hid what's going or revealed the hidden nature of what's going on. That there is investment spending, let's say spending in time.

Uh, people's time is ultimately money. Um, that's that whole, you know, DevSecOps side of things. Take, take, take the software bill of materials.

Um, I, I, I applaud, um, the, you know, return of the SBO m and uh, the ability right now of AI to help build SBOs, um, human validated, but to help build them, that's a real step forward. But would you call that a cyber, uh, investment? Not normally.

Yeah. I think part of that is, yeah, or compliance, maybe investment. I don't know.

So it kind of goes both ways. But Chris, I want to get at something. We had, um, Keith Townsend on the show yesterday talking about cybersecurity as it related to a tech field day event.

And one of the things that was posited was, is the future of security. Maybe this whole conversation might be rendered moot because AI is gonna create this kind of chat interface in front of all these cybersecurity engines. So I'm not really gonna care about the centralized platform as much as I'm just gonna have kind of a single interface that plugs and plays with different engines as I see fit.

It may be a little oversimplified to put up that way, but I think that's kind of effectively, right. You know, what you said is that, you know, we're not gonna have to dig around at all the details anymore, so much as have this single, you know, AI interface that's gonna tell us how it all works. Um, I think on an individual level, as you're a stakeholder, a a technologist, an engineer, a decision maker, that may kind of be effectively true, but we're still early in figuring this out, right?

And I think we look at the size and scope of the infrastructures that we're responsible for, whether it's a single server and you have all, all day to do it, you know, we're physically past a point where a human being can read it all and know all anyways. And we haven't yet come to the trust layer where we trust our tools, AI or not to represent it to us. And if we are in the path that we are on of increasing complexity, and we are, then we have to get to that trust layer so that, you know, while it may sound a little silly in 2025, you know, at the beginning of June, just to say that executives and operators will be literally making decisions and, and, and taking actions based on what some AI told them, um, in the right context.

I think that's essentially exactly right. Mm-hmm. So guy, going back to the previous block, I'm gonna ask you the same question.

What is the level of disruption where we should expect to see among the cybersecurity vendors per se? Will there be a wave of consolidation in the age of ai? And is this gonna be kind of a recurring theme?

That's a really good question. Um, I find cybersecurity, um, and let's put compliance, you know, compliance risk into it, um, to be one of the, the, the most resistant areas of the market to consolidation. Um, the single platform idea, single pane of single, single glass of pane, which I love, is that what it was Mitch, um, is, you know, I mean, it it remains a unicorn, or not a unicorn, sorry, a, uh, an unreachable a a a windmill to tilt that.

Um, I, I do think though that AI has the opportunity here brings the opportunity for, um, consolidation from a vendor standpoint. Um, there's a lot being done like an observe observability platforms, um, and, uh, certain, you know, um, partnerships like, like, like the one Mitch mentioned at our sac, um, that, you know, help the operators, um, manage this, you know, crazy spaghetti diagram of, um, interdependent, uh, monitors and agents and so forth. It's just that security does not keep pace with, or doesn't go in lockstep with technological development.

So we were just talking about how, you know, in one sense, we are still at early days with AI and AI based development very early days. Mitch was very eloquent on that point. Um, as that, that tends to advance first, there is not a security centric development because security is always the punch bowl taker, you know, cup away or whatever.

You know, it's always the one that has to come and say, now, hang on just a second. And it always has to do that in reaction. It, it, it should not be, it should be a driver of innovation, but it does not tend to be looked at that way.

Um, nonetheless, the simpl the, the simplification that properly used AI can provide in taking very huge, uh, messes, spaghetti diagrams and providing clarity into them could be the opportunity you're talking about. Yeah, I gotta jump into that one because the, the, the, that term, I love that I hadn't heard that before this. I'm surprised it took that long, you know, a class of pain, but this pane of glass, you know, this platform, you we're gonna have to finally solve our, our thing.

I think it's a different way to look at it. And this might be a good context to help us think about it because we're talking about ais, we're talking about large language models that are for our purposes, effectively holo graphic storage systems a narrative, right? So it's not so much a pane of glass that a company's gonna use, but each stakeholder in different roles has different facets to look into it, right?

And to your point guy, you know, like when you're a security person looking into this, into this, this data space and you're looking at it from a security perspective, you should be able to see that interwoven and everything else that's going on, not as a separate box that's bolted onto by wires and a conduit process to some other Box called engineering. It also, I think will enable the, the, you know, really correct approach of two for two, for two of everything, two tools. Um, because now adding things does not actually necessarily change your user experience.

Um, you could have two different agents doing the same thing, two AI interfaces doing the same thing. Um, but the, the, the view of the analyst, the IT analyst expands, um, without having to also expand the number of dials to twiddle or any of that other sort of thing. We just always, of course have to remember human supervise.

You know, you still need to be an expert in these sort of things. You can't just, you know, put, you know, a newbie or a novice on a complex system on because AI is there. You can't do that.

Mitch, last word on this, but, you know, I seem to remember talking to lots of IT and cybersecurity people and nothing warms their hearts quite so much as waking up one morning to discover that this tool or platform that they really love just got acquired by some stranger. So, Or they gonna ruin it when they acquire it, right? Yeah.

Well first of all, just a shout out to Krista case. Um, and, uh, Fernando Montenegro, who, who did this research at FU futurum, it, it's a really good, a really good point. I think that's a fair and any, anything that we really enjoy using, right?

Whether it's a great desktop tool or, you know, uh, something on our phones or security, I, I think there's a real possibility we may have. And, uh, something of an inflection point happen in security of, let me overstate it this way. We, we, we essentially kind of passively wait for attacks to happen and either block them or respond to them, or we're, we're waiting for someone to, you know, cross the line and then we're gonna do something about it.

Super, super oversimplification. But it's, it's a defensive and response posture, um, to draw an analog to the software world where software developers, product managers are going, or they're pro, they're gonna be prototyping, they're gonna be using AI to generate new ideas and test concepts without ever deploying it into production as a real app, but maybe deploying it into production as a, you know, as a AB test or something like that. Or maybe I'm just pursuing ideas.

Think of the same thing in the security world. Um, what if I changed my security architecture this way, take the last, um, two years of attacks and analyze that against this approach? And if I add vendor B into it instead of vendor A, how would that change my defense, my response, whatever.

Um, I wanna change the way we structured our identity architecture and now to be able to com accommodate visual voice, natural language, you know, the new, the new modalities of interface. Alright, well let me use AI to investigate and really prototype, maybe even try out some of those ideas. So instead of we're, we're kind of building it and then trying to keep, keep the fences, you know, secure.

So nothing breaks through until we upgrade 'em to the next level for the next product or, or release is really on the proactive end, be able to, to try ideas and test ideas and test new, new options. And I can imagine that's a world where, you know, I think Chris blast head would explode 'cause he'd had so much fun, but because he's that kind of guy. But I can just imagine that would be like your nirvana, Chris, I I'm having exactly that kind of fun right now, right?

And, and just, and this, we'll get into this more over the coming weeks and so forth, but this is what some of us are working out on, out in the world. You know, a civic AI node is a AI and a human being, you know, so that you have a certain form of trust and you build networks of these and, you know, for, for more discourse in the future, in theory, you can build a trust that this reliable enough to do things with. So I think we're, you know, to our point here about individual companies writing codes and so forth, I, I hate to be this cliche, but yeah, I think things are gonna change an awful lot.

I've already changed for some. And the next year is gonna see dramatic changes for many. Well guys, hey, to quote that great American philosopher, the times are a changing.

So stay tuned 'cause it's just gonna be all kinds of fun in the next weeks, months and years ahead. We'll be back in a minute. Discover Techron group, the epicenter of tech innovation.

We are your go-to for reaching IT leaders and practitioners worldwide. Our secret impactful content that sparks awareness, engagement, and top quality leads with us. You'll access editorial websites, streaming videos, virtual events, custom content analyst research and more.

Join our satisfied clients. Let's revolutionize your tech journey. Contact us today and tell your story to the world in the most powerful way with Textron Group.

Hey folks, we're back. And guess what? VMware is back in the news and it seems like this company just cannot get out from underneath this move that they made.

And for better or worse, it's a topic of discussion. Now there's a EU watchdog that is saying, well, basically the VMware changes to their licensing policies have resulted in 800 to 1500% hikes. And, um, you know, they're basically not saying it's illegal, but they're questioning the morality of this guy.

Um, at some point, do we just kind of have to sit back and go, look, Broadcom made a decision, it's their decision to make and everybody else has to make their own decision as a result from that. And maybe it's, I don't know, time to just get on with it. Well, it's definitely time to just get on with it.

When you hear EU and organization, you have a tendency to think that there's something governmental about it or quasi-governmental about it. So I want really be clear here that, um, sis b um, which is the, the governing body, so to speak for this, this, uh, um, echo institution that I hadn't heard of before, uh, that came out with the statement. This is, this is C stands for cloud and for service s sp for service provider and sis b, um, that this is a coalition of European cloud service providers.

Private right there, there's nothing quite, you know, I, I so rarely use baseball metaphors, Mike, but I'm gonna try to use one here. I I know baseball, but I just don't follow it as closely as you do. Um, this is like the players association complaining about the contract negotiation with the owners.

Um, uh, and I just don't know the name of the players association for baseball. It really is, they have, um, banded together. I mean, cspi was created because of a judgment against Microsoft, if I remember right, uh, that Microsoft start.

And so they just, I think it might've been Microsoft that said, look, I don't want, we don't want to deal with, you know, one of you at a time. You're in all different countries, even if you're all in the eu. That's years ago.

Um, now it's Broadcom's turn. And um, my sense is that they are just publicizing a whole lot of plausible numbers, like 600% higher costs, so on and so forth to try to get Broadcom to come to the table. Um, who doesn't like perpetual licenses?

Well, those are essentially dead. They're a thing of the past forever and ever. And the ones that are left are legacy.

And that's not Broadcom, that's the market. Um, Broadcom probably wants all of these cloud companies to remain profitable and to to, to, you know, renew after three years. And yeah, well, okay, maybe Broadcom wants to empty the exit the market and, and make as much money, you know, along the way as it can.

That, that that could be the situation as well. These are cloud providers. These are folks whose core job, unlike your typical enterprise core job, is to build resilient infrastructure and serve it to customers.

They want to keep their costs down, but they need the infrastructure to be performant and to work and do all these things that VMware has been doing for years and years and years. However, Broadcom strategic moves with VMware have made alternatives like Nutanix with, with a DH or with, uh, KVM, OpenStack, um, God help us, maybe even zen real alternatives to virtualized platforms look way more attractive. And, uh, Nutanix in particular is going quite aggressively at existing Broadcom business, doing things like allowing, uh, try before buy experiences and building up a pretty robust, um, migration practice, um, to try to take as much cost as possible out of the switch.

And there's no reason cloud providers can't go in that direction. A HP is based on KDM, it's based on open source. Um, the real question is, uh, I think it comes down to your, your favorite topic, Mike, which is all the personnel, all the people who are actually running all this stuff who have built their reputations and their careers on VMware.

And this, if anything, this news is, uh, about the players. It's about those players. Not the cloud folks, but all the people in Europe who have been running VMware forever and are crying out for relief at, uh, suddenly seeing their whole life work style threatened.

I mean, I will grant you that it has unfortunate consequences, but, uh, you know, when I look over at Broadcom, they're not sitting there going, oh, please don't leave me. Please don't leave me. They're basically saying, you know, pay up or get out.

It's, it's, it's, it's, you know, it is not quite an eviction notice, but it's pretty damn close. So Mitch, is this just, uh, something we need to factor into our thinking? I mean, did we get overly attached to a single vendor in somehow or other thought that they would be with us forever?

And I'll go back and, you know, point to some of the things that Keith Townsend's been writing. It's like pretty clear that VMware is business model is unsustainable, otherwise it wouldn't have been acquired three or four times in the last two decades, right? Well, I think you, I think you nailed it pretty well.

They're business, they're not, they're not an altruistic organization. They're there to serve their stockholders and make money for the company and return on investment. And they've got a captured market with VMware and very, very solid, big market.

And They didn't raise pro prices because it was easy to move off VMware. They raise prices. 'cause it's very hard to move off of that platform and onto another one.

Not impossible can be done, but you don't say, let's schedule, you know, the weekend after Memorial Day to, you know, we'll move off of VMware and move on to the next thing. It's, it's a migration, it's an effort. It's, it's, uh, it know kin to moving to the cloud, but maybe twice as complex in some ways.

'cause you've gotta unwind all the way down to what do you leave behind? What do you take onto the new platform? Uh, the, the new platform doesn't do things the way a really mature product like VMware does, but do you still need it done that way?

So there's a lot of things to, to consider in moving it. You know, it's, there are a lot of options for moving, but you're not gonna do it solely on the pricing of VMware. 'cause there's a lot more cost into it to moving your infrastructure.

Mm-hmm. I do believe it's getting easier to move that infrastructure. And I'm not just talking about the VMs, but the stack that sits above that.

And as time goes on, that may get even easier. So maybe Broadcom might have miscalculated how long or how hard it is to make that migration, but ultimately they still do the math and it comes out with a, this is our new price point and this is what it's gonna be. So, um, I don't know, Chris, you haven't jumped in on this one, but is this just the world we live in?

You know, I'm probably the least qualified to give a, a pointillistic, you know, state of the market one on this one. But I'll tell you what I Yeah, I, in the first segment, Mike, you talked about the big players having a advantages and so forth. There's a flip side of that as well when you look at where VM is in the entire space, and yeah, they're huge, but they're also sort of fossilized, built in, tied in.

And this, this is a good topic, you know, how with the ransom of, so sometimes being big and filling the space isn't an an advantage, you know, and yeah, and again, I'm not commenting on them, you know, their, their activities, you know, they, but they're, we all know lots of folks that work there, great company. However, you know, without knowing the details that, that you guys probably know exactly where they're right now. I think that's a fair risk comment for now.

I think they're, they're not in a, in a spot because they're so huge. They have, they have all the advantages, probably more the opposite, probably need to think more flexibility than, than than legacy. Hey, here's what I wonder is, is how important to Broadcom, uh, is the cloud provider community?

Now, outside hyperscalers, there are tons and tons of, especially in Europe, but you know, it's true around the world. Tons of cloud providers, true cloud providers on demand pay as you go, et cetera, et cetera. But for more traditional, let's say, enterprises applications, this coalition in Europe is a great example of it.

Um, and a lot of them are regionally based, you know, serving their countries or a few countries or, you know, language groups really, really well. Um, and they have relied on VMware, VMware's initial play into the cloud going back like 10, 12 years was to try and be a new hyperscale platform that failed utterly. But that's because it just wasn't the smooth move for something like a VMware, um, a closed, highly performant, highly capable and secure proprietary, you know, resource allocation platform resource pooling and allocation platform.

But for these cloud providers, it has been terrific. And, um, I just wonder, seems to me that Broadcom should be most interested in this customer set and least interested in the enterprise customer set. Strateg speaking strategically, not uninterested, especially for large enterprise, but strategically speaking across the broad, it's when you're gonna try and find the so-called synergies and all that other sort of stuff.

I'm gonna add two words to this guy. Two words to this. One is mainframe and the other one is tariffs.

We still have mainframes around, right? We'll still have VMware running in people's data centers forever. But I'm, I'm gonna draw an a loosely coupled analogy to tariffs.

It's the same problem of do we, do we pass on the price increases as a cloud provider to the underlying cost of the infrastructure software VMware that we run in the cloud so that customers can run their VMware in the cloud instead of their own data center? Or do we eat that cost that they don't wanna eat that cost? So that, that's what's driving this behavior is they're saying, look, our costs are going up.

You have a gun to our head. We don't have a choice. We don't wanna raise prices on our customers.

Maybe we're locked in on price for some period of time, and we weren't as, uh, as, uh, you know, as savvy about our contracts with VMware. I'm just, I'm just surmising that that's Another analogy to tariffs too. Yeah.

Yeah. So it, it is kind of, it's not a tariff, but it's the same effect where those costs go up that aren't in your control and you've gotta pass 'em on to customers. So guess who the next group that's not happy is, is your customers.

I would, I would take this as a public negotiation over licensing. That's just like, as like the sport analogy, you know, the players association negotiating with the owners, and ultimately through maybe a high stakes, you know, or a very mellow dramatic communications war. They will come to an agreement or They could just go to the great mediator area in Mar-a-Lago and he'll help them sort this all out, right?

He'll, he'll fix it in, he'll fix it on, on day one. There You go. On day one, it'll be fixed.

All right, I'm going to, I'm gonna leave this here, but I would just point out one thing. Um, decisions that are made in anger usually don't turn out as well as you hope. So take a minute, take a breath, and think about it long and hard before you decide what you're gonna do.

There's no right answer, but just know that there's cost. Either way you look. Hey, I wanna thank everybody for being on the show today and sharing their insights as always, and I want to thank you all for spending some time with us.

Once again. Please stay tuned. There's some awesome content coming up right behind us on the text drawing TV lineup as always.

Until then, we'll see you tomorrow.