VMware’s end-user compute business unit is set to be acquired by private equity firm KKR, according to a Reuters report that claims the deal will see $3.8 billion change hands.

If the deal is done, it will see VMware’s desktop virtualization and application publishing estate offloaded, per plans Broadcom announced in December 2023. The Register understands revenue from the end-user compute products was around a billion dollars annually.

KKR is already a player in enterprise tech, having acquired Barracuda Networks and Cloudera, as well as BMC.

Whoever buys VMware’s end-user compute (EUC) assets will inherit a client list that features many customers in government and highly-regulated industries. Such buyers have tended to be big users of desktop virtualization as their security and privacy requirements make operating fleets of desktop PCs perilous.

KKR will also inherit a user base perhaps uniquely sensitive to Broadcom’s shift to sales of product bundles and per-core licenses, because the EUC portfolio can comfortably run without VMware’s wider hybrid cloud stack. Yet Broadcom now only sells bundles of software that include much of that stack.

Mark Thaver, CEO of consultancy Founder Licensing Data Solutions, last week opined that Broadcom’s licensing scheme will see the price of VMware licences increase, and that promised cost-neutrality for those moving from perpetual licenses has not eventuated.

He also warned that Broadcom’s strategy “is likely to culminate in the underutilization of software, resulting in resources being expended on unused software.”

Thaver therefore advised VMware customers to prepare for negotiations with Broadcom well ahead of their license renewals, and recommended “a strategic approach akin to that utilized in negotiations with Microsoft or Oracle.”

Many orgs have experience with – and scars from – negotiations with those vendors. Thaver’s advice will therefore be welcome as it offers a starting point for considering talks with Broadcom – and a little scary, as Microsoft and Oracle are renowned for seldom flinching. In the case of Oracle, many customers have learned to fear aggressive license audits.

Negotiations with VMware by Broadcom could get heated: The Register has spotted accounts of licensing costs rising by 67x, and bills rising from $8 million to $100 million.

For VMware’s EUC customers, those price rises could be intolerable – especially as the likes of AWS, Alibaba Cloud, and Microsoft refine their cloud-hosted desktops.