This seems a strategic exit by VMWare to cede all desktop-hosted virtualization markets to competitors. Probably because that category didn't meet an arbitrary profitability criteria, instead of a customer-focused analysis of what value propositions the product line brought to the table when looked at as a part of an entire picture of all other products offered.
Another possibility is VMWare might be defocusing their traditional virtualization and this is the first of an all-in shift to containers because that's a growth market at the moment.
Not a few enterprise customers value these "low profitability" product lines, because they promise to lower the complexity of dealing with a wide-area problem space. After IBM ditched their "low-profit" servers, for example, you can find a CIO going on record here and there saying they abandoned their all-IBM-servers policy in their shops. I can assure you there are many more who did not go on record.
Applying a single financial metric across all your products loses focus upon what really matters to your customers. It looks great to boost relative margins, though. By jettisoning certain product lines that complemented and completed a market message to your customers, you open up high-margin products to much more effective competitive attacks. It will be interesting to see what VMWare's competitors come up with.