Broadcom has allegedly hiked VMware costs between 800 and 1,500%
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- ECCO has released its second report on Broadcom, citing no improvement
- Germany’s VOICE has brought VMware pricing to the European Commission’s attention
- Perpetual licenses got terminated, with many customers forced to pay upfront for three years
Broadcom has allegedly increased VMware licensing costs by eight to 15 times for many customers after eliminating perpetual and pay-as-you-go licenses, replacing them with bundled subscriptions that require a three-year minimum contract.
The European Cloud Competition Observatory (ECCO) has likened the new pricing to paying for full, continuous usage regardless of actual consumption.
It was revealed that many CISPE members have signed new contracts under pressure to keep services connected while lacking viable alternatives, with some old contracts over 10 years abruptly terminated.
“ECCO’s role includes highlighting ongoing or new unfair software licensing practices from any software vendors in the cloud sector. As such, it has already published one report critical of Broadcom’s changes to licensing practices following its acquisition of VMware in November 2023,” ECCO wrote.
ECCO said that Broadcom continues to enact a “increasingly litigious approach to its partners and customers,” accusing the company of partaking in anticompetitive actions. Europe’s Observatory stressed that it has only had one meeting with Broadcom since its VMware acquisition, but no progress was made.
“This second report finds that Broadcom’s wide ranging and brutal imposition of unfair contract terms for cloud infrastructure service provides continue unabated,” the body added.
In May 2024, CISPE criticized the company for requiring up-front payment for its three-year contracts, stating that “Broadcom must do more.”
Since then, Germany’s VOICE, an association of IT users, has sought to file a formal complaint against Broadcom with the European Commission.
CISPE Secretary General Francisco Mignorance commented: “Unlike Microsoft, Broadcom shows no interest in finding solutions, or even of working with European cloud infrastructure providers. Broadcom can report that most have signed new contracts, but we know that these are punitive and threaten the viability of service providers locked-in to the VMware ecosystem. Urgent action is needed.”
TechRadar Pro has asked Broadcom to comment on the ongoing matter, but we did not receive an immediate response.
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