So, how are things going over at Broadcom? Well….
AT&T is suing Broadcom, claiming the chipmaker is attempting to breach VMware contracts by withholding essential support services unless AT&T agrees to purchase bundled subscription software, which it does not want. AT&T argues that this could jeopardize critical services for first responders and national security. The lawsuit seeks to enforce AT&T’s rights to renew support services under a prior agreement. Broadcom has 20 days to respond to the complaint, asserting that it disagrees with AT&T’s claims and maintains that the shift to a subscription model is standard in the industry.
The New Stack catches up on VMware’s transition to a subscription licensing model after Broadcom’s acquisition, which has led to mixed reactions among users, with a significant portion considering abandoning the platform due to cost concerns. A survey indicated that while many users are dissatisfied, most still plan to remain with VMware, citing the need for infrastructure changes as a positive outcome. VMware encourages users to optimize their resources to mitigate cost increases while competitors position themselves as alternatives. Broadcom defends the subscription model as a necessary industry standard to simplify pricing and support.
I love how VMWare’s answer is “don’t be wasteful” as the answer to price increases.
For businesses relying on VMware infrastructure, this situation highlights the importance of closely reviewing contracts and negotiating for terms that protect access to critical support services, especially in scenarios like AT&T’s.
IT leaders should recognize that subscription models are becoming standard across the industry. However, this also means enterprises must proactively negotiate terms that align with their operational and financial needs, ensuring they don’t get locked into rigid pricing structures. I’ve been talking about cost management a lot lately. This is a component of that, and another element to a valuable service.