VMware licensing change since acquisition by Broadcom: Difference between revisions
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}}On 22 November 2023, [[Broadcom Inc.]] completed the acquisition of VMware.<ref>{{Cite news |last=Yoo |first=Ji |date=2023-11-23 |title=Broadcom Completes Acquisition of VMware |url=https://investors.broadcom.com/news-releases/news-release-details/broadcom-completes-acquisition-vmware |url-status=live |archive-url=https://web.archive.org/web/20231201233650/https://investors.broadcom.com/news-releases/news-release-details/broadcom-completes-acquisition-vmware |archive-date=2023-12-01 |access-date=2025-09-06 |work=Broadcom Inc.}}</ref> Perpetual licenses for the software were ended | }}On 22 November 2023, [[Broadcom Inc.]] completed the acquisition of VMware.<ref>{{Cite news |last=Yoo |first=Ji |date=2023-11-23 |title=Broadcom Completes Acquisition of VMware |url=https://investors.broadcom.com/news-releases/news-release-details/broadcom-completes-acquisition-vmware |url-status=live |archive-url=https://web.archive.org/web/20231201233650/https://investors.broadcom.com/news-releases/news-release-details/broadcom-completes-acquisition-vmware |archive-date=2023-12-01 |access-date=2025-09-06 |work=Broadcom Inc.}}</ref> Perpetual licenses for the software were ended and changed to a subscription-based model.<ref>{{Cite web |last=Walsworth |first=Rick |date=2024-01-22 |title=VMware End Of Availability of Perpetual Licensing and SaaS Services |url=https://blogs.vmware.com/cloud-foundation/2024/01/22/vmware-end-of-availability-of-perpetual-licensing-and-saas-services/ |url-status=live |archive-url=https://web.archive.org/web/20240124152826/https://blogs.vmware.com/cloud-foundation/2024/01/22/vmware-end-of-availability-of-perpetual-licensing-and-saas-services/ |archive-date=2024-01-24 |access-date=2025-09-06 |website=VMware}}</ref> Customers report that this new model results in higher overall pricing for their use of VMware. Several notable businesses who are customers of VMware have started legal action against Broadcom. | ||
==Background== | ==Background== | ||
{{ | In 2025, Broadcom initiated the second phase of its VMware consolidation.<ref name=":2">{{Cite news |last=Ashare |first=Matt |date=2025-09-05 |title=Broadcom enters ‘second phase’ of VMware consolidation |url=https://www.ciodive.com/news/broadcom-vmware-vcf-adoption-second-phase/759406/ |access-date=2025-09-06 |work=TechTarget Industry Dive: CIODive}}</ref> The CEO stated that "more than 90% of VMware’s largest 10,000 customers have shifted from perpetual licenses to the subscription-based".<ref name=":2" /> | ||
== | Besides the new pricing models since the acquisition, Broadcom increased the minimum amount of cores from 16 to 72 cores in April 2025, which must be paid irrespective of usage of the 72 cores.<ref>{{Cite news |last=Robu |first=Raluca |date=2025-05-06 |title=VMware Price Increase in 2025: What You Need to Know |url=https://www.colocationplus.com/blog/vmware-price-increase-in-2025-what-you-need-to-know |url-status=live |archive-url=https://web.archive.org/web/20250521023945/https://www.colocationplus.com/blog/vmware-price-increase-in-2025-what-you-need-to-know |archive-date=2025-05-21 |access-date=2025-09-07 |work=ColocationPLUS}}</ref><ref name=":3">{{Cite news |last=Sharwood |first=Simon |date=2025-03-28 |title=VMware distributor Arrow says minimum software subs set to jump from 16 to 72 cores |url=https://www.theregister.com/2025/03/28/arrow_vmware_licensing_change/ |url-status=live |archive-url=https://web.archive.org/web/20250802114935/https://www.theregister.com/2025/03/28/arrow_vmware_licensing_change/ |archive-date=2025-08-02 |access-date=2025-09-07 |work=The Register}}</ref> In addition, being late with license renewal causes an additional 20% cost penalty.<ref name=":3" /> | ||
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=== | |||
==End of perpetual licenses== | |||
===Broadcom's response=== | |||
Broadcom argues that they have listened to their customers. They close their response to saying they will complete the transition plan to a subscription model for VMware.<ref>{{Cite news |last=Tan |first=Hock |date=2024-04-15 |title=A changing market landscape requires constant evolution: our mission for VMware customers |url=https://www.broadcom.com/blog/a-changing-market-landscape-requires-constant-evolution-our-mission-for-vmware-customers |access-date=2025-09-06 |work=Broadcom}}</ref><!-- Elaborate on Broadcom's response with a fair and neutral explanation to make the article more balanced. Include quotations if possible --> | |||
==Lawsuits== | ==Lawsuits== | ||
===Dutch Ministry of Infrastructure (Rijkswaterstaat v. Broadcom Inc.)<ref>{{Cite web |date=2025-06-27 |title=ECLI:NL:RBDHA:2025:11349 |url=https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:RBDHA:2025:11349 |access-date=2025-09-06 |website=De Rechtspraak |language=nl}}</ref>=== | ===Dutch Ministry of Infrastructure (Rijkswaterstaat v. Broadcom Inc.)<ref>{{Cite web |date=2025-06-27 |title=ECLI:NL:RBDHA:2025:11349 |url=https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:RBDHA:2025:11349 |access-date=2025-09-06 |website=De Rechtspraak |language=nl}}</ref>=== | ||
On Friday, June 27, 2025, the summary proceedings judge granted Rijkswaterstaats request. Broadcom must continue to provide | On Friday, June 27, 2025, the summary proceedings judge granted Rijkswaterstaats (RWS) request. Broadcom must continue to provide RWS with support for a period of 2 years under the existing conditions and price.<ref name=":0">{{Cite web |date=2025-07-03 |title=Rijkswaterstaat wins summary proceedings against Broadcom over continuation of support |url=https://openrijk.nl/en/rijksinstellingen/rijkswaterstaat/artikel/rijkswaterstaat-wint-kort-geding-tegen-broadcom-over-voortzetting-van-support/rijkswaterstaat-wins-summary-proceedings-against-broadcom-over-continuation-of-support |url-status=live |archive-url=https://web.archive.org/web/20250906145425/https://openrijk.nl/en/rijksinstellingen/rijkswaterstaat/artikel/rijkswaterstaat-wint-kort-geding-tegen-broadcom-over-voortzetting-van-support/rijkswaterstaat-wins-summary-proceedings-against-broadcom-over-continuation-of-support |archive-date=2025-09-06 |access-date=2025-09-06 |website=Openrijk}}</ref> | ||
The judge ruled: | The judge ruled: "Unlike Broadcom et al. have stated, there was [thus] no question of free commercial negotiations between two large professional parties; one could say that RWS was in a bind. The judge ruled that RWS must be allowed to part ways with VMware/Broadcom and still receive support during that process. By failing to do so, Broadcom acts in violation of the care that is owed to RWS in social traffic."<ref name=":0" /> | ||
=== | The ruling includes statements about earlier investigations. For instance, on July 22nd 2024, the European Commission stated that they would initiate investigations. They received complaints of the licensing model after Broadcom acquired VMware.<ref>{{Cite news |date=2024-07-22 |title=Case AT.40924 - VMware software licensing - Request for information pursuant to Article 18(2) of Council Regulation (EC) No 1/2003 |url=https://dutchcloudcommunity.nl/wp-content/uploads/2024/08/Art-182-RFI-CISPE-Broadcom-VMware-22-07-24-esigned.pdf |access-date=2025-09-06 |work=European Commission}}</ref><ref>{{Cite news |last=Yun Chee |first=Foo |date=2024-04-25 |title=Broadcom questioned by EU over VMware licensing changes |url=https://www.reuters.com/technology/broadcom-questioned-by-eu-over-vmware-licensing-changes-2024-04-15/ |url-status=live |access-date=2025-09-06 |work=Reuters}}</ref> | ||
=== | ===European Cloud Providers=== | ||
On Wednesday 30, July 30, 2025, the trade body for European Cloud providers CISPE started legal action against the European Commission.<ref name=":1">{{Cite news |last=Cojocaru |first=Alex |date=2025-07-30 |title=European Cloud Providers Drag Broadcom’s VMware Deal into Court |url=https://licenseware.io/european-cloud-providers-drag-broadcoms-vmware-deal-into-court/ |url-status=live |archive-url=https://web.archive.org/web/20250809000200/https://licenseware.io/european-cloud-providers-drag-broadcoms-vmware-deal-into-court/ |archive-date=2025-08-09 |access-date=2025-09-06 |work=Licenseware}}</ref> The legal action focuses on the acquisition approval by the EU Commission; arguing the remedies taken were "irrelevant to the real threat".<ref name=":1" /><ref>{{Cite news |date=2023-07-12 |title=Mergers: Commission clears acquisition of VMware by Broadcom, subject to conditions |url=https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3777 |url-status=live |access-date=2025-09-06 |work=European Commission}}</ref> | |||
=== Siemens === | ===AT&T=== | ||
On November 21 2024, AT&T reached a settlement-in-principle with Broadcom over the alleged annual increase of 1,050% in costs for VMware.<ref name=":4">{{Cite news |last=Ashare |first=Matt |date=2024-11-22 |title=Broadcom, AT&T reach settlement in VMware legal dispute |url=https://www.ciodive.com/news/broadcom-att-vmware-settlement-licensing-support-lawsuit/733763/ |url-status=live |archive-url=https://web.archive.org/web/20241215202230/https://www.ciodive.com/news/broadcom-att-vmware-settlement-licensing-support-lawsuit/733763/ |archive-date=2024-12-15 |access-date=2025-09-07 |work=TechTarget Industry Dive: CIODive}}</ref> The terms of the settlement were not disclosed, but it is clear that AT&T is moving away from doing business with Broadcom.<ref name=":4" /> In the case, Broadcom argued to the court that they did not have to give support as AT&T did not renew their license. | |||
US law recognizes the concept of transition assistance where the incumbent contractor remains legally responsible for maintaining service continuity and ensuring a smooth handover of responsibilities for government contracts: this is governed by Federal Acquisition Regulation (FAR), part 37.<ref>{{Cite web |date=2025-08-07 |title=Part 37 - Service Contracting |url=https://www.acquisition.gov/far/part-37 |url-status=live |access-date=2025-09-07 |website=ACQUISITION.GOV}}</ref> For business to business contracts, this is usually found in the contract transition clauses. | |||
===Tesco=== | |||
===Siemens=== | |||
==Consumer response== | ==Consumer response== | ||
This section will highlight the cost hikes as those are often also reported by the contracted parties. | |||
*CISPE's ECCO found that their members costs for VMware increased 8 to 15 times compared to the previous pricing model.<ref>{{Cite news |last=Hale |first=Craig |date=2025-05-23 |title=Broadcom has allegedly hiked VMware costs between 800 and 1,500% |url=https://www.techradar.com/pro/broadcom-has-allegedly-hiked-vmware-costs-between-800-and-1-500-percent |url-status=live |archive-url=https://web.archive.org/web/20250726024605/https://www.techradar.com/pro/broadcom-has-allegedly-hiked-vmware-costs-between-800-and-1-500-percent |archive-date=2025-07-26 |access-date=2025-09-06 |work=TechRadar}}</ref> | |||
*The reliance on VMware is high across many different sectors and is not something that can easily be replaced by other software.<ref>{{Cite news |last=Jacobs |first=Skye |date=2025-01-29 |title="We loved VMware. Now we hate it": Customers react to Broadcom's changes |url=https://www.techspot.com/news/106547-loved-vmware-now-hate-customers-react-broadcom-changes.html |access-date=2025-09-06 |work=TechSpot}}</ref> | |||
==References== | ==References== | ||
{{reflist}} | {{reflist}} | ||
[[Category:VMWare]] | [[Category:VMWare]] | ||