Broadcom accommodates VMware customers with licenses; EU Commission sends questions

[German]The ongoing criticism of VMware by Broadcom's licensing policy by customers may be having an impact. At least VMware by Broadcom has responded to the topic again with a blog post and wants to offer customers with perpetual licenses a "relieve". And EU competition authorities are responding to a formal complaint from CISPE and have sent Broadcom a series of questions around VMware licensing.


EU Commission sends Broadcom questions

The turmoil outlined here in the blog regarding product policy, licenses and dealings with partners (see links at the end of the article) has shattered a lot of porcelain and caused anger. Some customers have seen massive increases in licensing costs this year (see my German blog post Der Fluch der neuen Broadcom/VMware VCF-Lizenzierung in der Praxis). Providers that offer virtual machines and cloud services are seeing their business models disappear. On the one hand, Broadcom wants to bring massive amounts of money into its coffers through the new license subscriptions. On the other hand, the providers are tied to customer contracts and cannot pass on the costs.

The European cloud operator association CISP, a non-profit trade association for infrastructure-as-a-service cloud providers in Europe, recently sent a letter to the EU Commission complaining about the new licensing conditions at VMware. In a press release, CISPE calls on regulators, legislators and courts across Europe to quickly review Broadcom's actions in unilaterally revoking licensing conditions for key virtualization software.

At the beginning of April 2024, the European cloud consortium CISPE sent a letter to high-ranking politicians in the European Commission who are responsible for competition policy. The letter, signed by France's Cigref, Belgium's Beltug, German group Voice and Dutch CIO Connect, makes harsh statements against Broadcom and describes its behavior as "unfair" and anti-competitive.

I wrote in the blog post VMware plans two Cloud Foundation releases, can they do it? CISPE complaint filed as well as in the article Is Broadcom going downhill with its VMware measures? Silent layoffs and CISPE calls for EU measures on this issue. There were also indications that European competition authorities had already contacted Broadcom about its VMware licenses.

Reuters confirmed in this article that the EU antitrust authorities have written to Broadcom about the changes to the licensing conditions at the acquired cloud computing company VMware. An EU Commission spokesperson is quoted by Reuters as saying on Monday, April 15, 2024, that the EU competition authority has requested information from Broadcom to investigate the above matter. "The (European) Commission has received information indicating that Broadcom is changing the terms of software licensing and support for VMware," Reuters quoted a spokesperson for the EU Commission as saying on Monday, April 15, 2024.

Broadcom responds to criticism

As of April 15, 2024, Hock Tan, President of Broadcom, responded to the ongoing criticism of the new licensing models in this blog post. In the somewhat longer article, Hock Tan confirms that they will continue to convert the licensing model to a subscription basis and that they will offer customers a better offer "from the company's perspective".


However, VMware's switch to subscriptions will not affect customers' ability to continue using their existing perpetual licenses. Customers are explicitly acknowledged that they have the right to continue using older versions of vSphere that they have previously licensed. Customers can continue to receive maintenance and support by enrolling in one of VMware's subscription offerings.

However, Broadcom wants to ensure that VMware customers whose maintenance and support contracts have expired and who decide not to take out a subscription offer can continue to safely use the products with perpetual licenses. Therefore, Hock Tan announced free access to zero-day security patches for supported versions of vSphere. VMware by Broadcom plans to add more VMware products to the list over time as they receive free zero-day security patches. The Register states in this article that Gartner predicts VMware by Broadcom will experience a massive loss of market share.

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