VMware’s management used couched words like “solid” and “pleased” to describe its second fiscal quarter operating results, seeming to stay in step with the notion the vendor needs saving by Broadcom’s pending acquisition.

From a numbers perspective, VMware reported a 2% increase in revenues for its most recent quarter, with mid-year revenues up a more substantial 4% compared to the same period for its last fiscal year.

“We are pleased with our Q2 performance, which reflects the continued strength of our subscription and SaaS [software-as-a-service] portfolio and execution of our business model transition,” CFO Karen Dykstra noted in a statement. (VMware stopped conducting earnings calls following Broadcom’s initial bid last year.)

That transition has been toward an as-a-service model for VMware's cloud and multicloud-focused services that exchanges an initial one-time, high price for a service for an ongoing revenue stream that can also maintain a longer relationship with a customer. VMware introduced a handful of new cloud-as-a-service offerings at its recent Explore event.

VMware also reported a 37% year-over-year increase in net income to $477 million for its latest quarter, with midyear net income surging 19% to $701 million.

“We delivered solid Q2 results,” CEO Raghu Raghuram said. “Our customers continue to invest in our multicloud offerings as they modernize their infrastructure to run enterprise, cloud-native and new AI [artificial intelligence] workloads.”

VMware’s solid growth is not solid enough

Despite the cloud growth, Broadcom continues to undercut the density of VMware’s operations.

As part of gaining approval from United Kingdom regulators for the pending acquisition of VMware, Broadcom supplied redacted documents that painted a dire operating picture for VMware that Broadcom claims it will be able to alleviate with the purchase.

“VMware has a strong core technology and operates in a proven and growing market for enterprise workloads,” the documents note. “But VMware’s own internal documents describe its market position as a [redacted]. Broadcom believes it can provide VMware with the scale and capabilities to reverse this trend.”

It later provided notes on VMware’s growth plans, adding that “VMware has failed to do and is unable to achieve alone.”

Analysts have indeed questioned VMware’s ongoing ability to compete in the market barring a new operating direction.

“[VMware is] never going to go away. There’s always going to be a role for VMware virtualization technology,” Tracy Woo, senior analyst at Forrester Research, said in an interview with SDxCentral. “But it’s not going to be necessarily playing this outsized revenue engine for VMware that it has before.

“The moves that VMware has tried to establish themselves into the world, where public cloud is the predominant player, haven’t been incredibly meaningful. They have been able to carve out small niche roles for themselves, but they haven’t necessarily been able to be factored in as a huge player there.”

However, there are also concerns about Broadcom's ability to unlock VMware’s full potential.

Alex Demeule, an analyst at Technology Business Research, told SDxCentral in an interview that the overarching area of concern is that Broadcom will act as it has acted in the past when it comes to its acquisitions.

“I think so much of the conversation around the Broadcom acquisition really revolves around how those businesses are treated after the acquisition gets closed,” Demeule said, noting VMware has a “sticky installed base in the virtualization market. I think that’s really what Broadcom is after. Broadcom to me looks like a private-equity company as much as a technology company. They are just really good at buying sticky installed bases and generating free cash flow off of them.”

That free-cash-flow push could result in Broadcom unloading some of VMware’s businesses, with both Woo and Demeule pointing toward its Carbon Black security business as vulnerable.

VMware’s management maintained a cautious tone during the recent Explore event.

“Firstly, the acquisition has not closed,” Raghuram said during a question-and-answer session with analysts and reporters following his opening keynote speech. “The combined company will start functioning after the close of the acquisition. So that would be a better time to address how things are different.”

Raghuram did add a bit more flavor later during the session, but mostly deferred to what Broadcom CEO Hock Tan has publicly stated, which includes plans to invest $2 billion per year into VMware should the deal close.

“I would refer you to Broadcom and their stated plans, and what Hock Tan has written in public blogs, and you heard a little bit in the video as well,” Raghuram added. “They intend to continue to invest and operate in VMware as a continuation of our current business, reinforcing the multicloud strategy and building upon the multicloud strategy as a singular division within Broadcom, so that’s what they’ve announced.”

The pending deal has surmounted significant regulatory hurdles over the past several months, with Broadcom maintaining its stance that it will close the deal by the end of its current fiscal year, which is at the end of October.