Broadcom Inc. (AVGO) is going all-in on private cloud infrastructure, expanding its partnership with NEC Corporation to get more enterprises using VMware Cloud Foundation. The pitch? You can have your cloud cake and eat it too—the speed and flexibility of public cloud, but on your own infrastructure where you control security and costs.
The partnership expansion means NEC will start using VMware Cloud Foundation (VCF) in its own IT systems first, following what the company calls its "Client Zero" strategy. The idea is pretty straightforward: if you're going to sell something to customers, you should probably use it yourself and figure out all the quirks before anyone else has to deal with them. This hands-on experience will supposedly help NEC deliver better VCF-based solutions when customers come knocking.
Private Cloud Gets a Public Cloud Makeover
VMware Cloud Foundation is Broadcom's answer to a problem a lot of big companies have: they want the agility of public cloud environments, but they're not thrilled about moving everything to Amazon or Microsoft's data centers. VCF is an integrated platform that brings public cloud-style flexibility to private cloud deployments while keeping security tight, performance high, and total cost of ownership lower than the alternatives.
The platform lets organizations run traditional workloads, modern applications, and AI systems all on the same infrastructure without having to juggle multiple platforms. It's apparently working pretty well—nine of the top 10 Fortune 500 companies are already using VCF in their environments.
With this expanded partnership, NEC will be better positioned to help customers build secure hybrid cloud environments and speed up their digital transformation efforts. NEC already offers VCF-based solutions through its BluStellar Scenario value-creation model, and starting in October 2025, the company will deliver VCF as a managed service called NEC Private Cloud Infrastructure powered by VMware. Think of it as private cloud infrastructure with a concierge service attached.
Riding the AI Infrastructure Wave
Broadcom has been on a tear lately, with its stock up 47% year-to-date. The company is now valued at roughly $1.6 trillion, thanks largely to surging demand for its custom silicon and networking equipment as the AI boom rolls on. When everyone's building massive AI infrastructure, the company making the chips and networking gear to connect it all tends to do pretty well.
Last week, Broadcom unveiled an open, extensible ecosystem for VMware Cloud Foundation designed to help customers build, connect, protect, and scale modern private cloud environments across different types of infrastructure. The strategy seems clear: as AI workloads grow, companies need infrastructure that can handle traditional apps and cutting-edge AI systems without requiring a complete platform overhaul every few months.
Price Action: AVGO stock was trading higher by 0.53% to $342.30 premarket at last check Wednesday.
