CISPE says: VMware has increased prices by 800 to 1500%

VMware [German]The Association of European Cloud Providers, CISPE, complains that VMware by Broadcom has increased the prices of its products for customers by a factor of 800 to 1500 percent following the takeover by Broadcom. Broadcom is accused of abusing its dominant market position and welcomes the EU competition complaint from the German IT user association VOICE.

Since Broadcom took over the virtualization provider VMware, the trouble for customers has been piling up. Products have been discontinued (see Broadcom ends perpetual licenses for VMware products – End of the free ESXi server?) and there are constant problems with licensing. But what infuriates many customers is the fact that VMware by Broadcom has massively increased its prices for products.

CISPE comments on the VMware situation

CISPE (Cloud Infrastructure Services Providers in Europe) has now spoken out on this topic. It is based on the latest ECCO report on competition in the virtualization sector. ECCO stands for European Cloud Competition Observatory (ECCO). The body was set up as part of CISPE's agreement with Microsoft to settle the competition complaints against this provider. As an independent monitoring body, made up of CISPE members but operating independently under the auspices of CISPE, it is intended to monitor the market and competition.

CISPE complains about unfair practices by VMware

In the ECCO Reports No Progress with Broadcom published on May 22, 2025 (recognized here and here), CISPE complains that Broadcom's far-reaching and brutal imposition of unfair contract terms on cloud infrastructure service providers continues unabated.

The basis for the allegations is the ECCO Second Report on Broadcom from May 2025. Since the publication of the first ECCO report in February 2025, the majority of CISPE members have concluded new license agreements with Broadcom, it is said. However, these agreements often had to be signed under considerable pressure from VMware by Broadcom (there were no alternatives). Complaints include a lack of alternatives, abrupt contract terminations and financial incentives such as discounts for longer-term commitments that tie customers into expensive successor contracts.

According to CISPE, the latest developments indicate that Broadcom is increasingly taking legal action against its partners and customers and further expanding its anti-competitive measures. Among other things, the lawsuit against Siemens is mentioned in the ECCO report, which I mentioned in the blog post VMware sues Siemens for lack of licenses. The ECCO reporters may also be alluding to the facts that I mentioned in the blog post Broadcom sends cease-and-desist letters to users of VMware perpetual licenses without a maintenance contract.

Normally, the vendor and the customersresolve such disagreements quietly and amicably. This does not appear to be the case with Broadcom and CISPE has also been rebuffed. A single meeting was held between CISPE and Broadcom, but no progress was made, according to the CISPE press release. Francisco Mingorance, Secretary General of CISPE, comments:

"Unlike Microsoft, Broadcom shows no interest in finding solutions or even working with European cloud infrastructure providers. Broadcom can report that most of them have signed new contracts, but we know that these are punitive and threaten the viability of service providers tied to the VMware ecosystem. There is an urgent need for action."

CISPE complains about exorbitant price increases

The appendix of the Broadcom report then goes into more detail. The discontinuation of certain products (see my blog post Broadcom ends perpetual licenses for VMware products – End of the free ESXi server?) in favor of bundle offers (VMware Cloud Foundation licenses, VCF) without introducing new technical features or improvements is lamented. Customers will no longer be able to buy only the software they need and will be forced to pay for software they don't need, it says.

The appendix lists the end of perpetual licenses and the monthly "pay-as-you-go" pricing model for VMware software. These options have been replaced by three-year (VCF) annual subscriptions with a predetermined base price. Billing is no longer based on actual usage, which contradicts the basic operating principle of cloud computing, say CISPE and ECCO.

In addition, Broadcom had terminated existing license agreements, some of which had been in place for over 10 years, without sufficient notice. The aim was to force customers to accept new contractual conditions unilaterally dictated by Broadcom.

At the end of the day, this led to customers having to sign contracts under considerable pressure when renewing licenses, which they would never have entered into had alternatives been available. This led to considerable financial burdens and operational disadvantages for customers due to the conditions imposed.

The bottom line is that, according to CISPE, these changed contractual conditions have led to an exponential and unjustified increase in license costs affecting thousands of European companies, including hospitals and public services. The ECCO Appendix cites the following examples:

In the United States, for example, AT&T had reported price increases of
approximately 1,050%.
The CISPE members reported price increases to the ECCO Commission of between
800% to 1,500%. Prices have often increased tenfold.
When companies sign three-year fixed contracts, Broadcom usually offers a 30% to 50% discount on the price increase.

These price increases threaten the viability of certain companies and cloud service providers that are highly dependent on virtualization infrastructure. At the same time, these price increases are likely to be passed on to end customers. To minimize the financial impact of this abuse, some CISPE members have been forced to massively restructure their infrastructures and purchase new hardware, according to reports.

Migration and competition complaint

With one exception, all CISPE members were forced to accept Broadcom's new license conditions, as the notice periods for license renewals, including the changes, were extremely short.

Most CISE members had made significant changes and adjustments to their software and hardware software and hardware environment in order to reduce their dependency on the
VMware software and reduce the price of the required licenses, according to the appendix of the ECCO report.

Reading between the lines, it seems that companies are migrating, but the time to migrate to alternatives is too short and in some scenarios there are probably no real alternatives.

Looking back at the statements and conclusions of the ECCO report and its appendix, I believe that VMware by Broadcom is abusing its dominant market position. This almost cries out for competition proceedings by the EU Commission – and Broadcom is probably willing to provide fodder for such an investigation.

On May 7, 2025, VOICE – the German Association of IT Users – filed a complaint with the EU Commission against Broadcom/VMware for antitrust violations. According to the user association, Broadcom/VMware is abusing its dominant market position in the field of virtualization software (details can be found in my German blog post VOICE reicht Beschwerde bei der EU-Kommission gegen Broadcom ein).

ECCO welcomes the decision of the German IT customer association VOICE to file a formal competition complaint against Broadcom with the European Commission. Looks like the never-ending story will go on for a while and provide material for further articles. I think the EU Commission will certainly take action – but it could take a long time and be very late for many customers.

CISPE says: VMware has increased prices by 800 to 1500%

CISPE comments on the VMware situation

CISPE complains about unfair practices by VMware

CISPE complains about exorbitant price increases

Migration and competition complaint

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