Broadcom’s attempts to quell VMware unrest aren’t cutting it as the war of words escalates

Signage with logo at the Silicon Valley headquarters of semiconductor company Broadcom, Santa Clara, California, August 17, 2017
(Image credit: Getty Images)

Broadcom’s attempts to quell concerns over VMware subscription changes have fallen flat and prompted a further backlash from industry stakeholders. 

Cloud Infrastructure Providers in Europe (CISPE) recently stated that Broadcom’s change to a subscription-based pricing model was “anti-cloud” in nature, following on from other criticisms the trade body has made about Broadcom.

The comments follow an announcement earlier this month in which CEO Hock Tan made an effort to ease concerns over changes to VMware, which the company acquired in 2023, describing the original strategy as overly costly for customers. 

“It demonstrated that all too often, as innovative companies expand, decisions are made incrementally, not holistically as part of a larger, comprehensive strategy,” Tan said. 

Claiming to be responding to customer concerns, Tan then said that Broadcom would commit to increased levels of research and development, as well as significant price reductions in VMware Cloud Foundation (VCF).

“We have dramatically reduced the price of VCF to promote customer adoption,” Tan said.

Tan gestured to the creation of a simplified portfolio built on two core solutions, VCF and VMware vSphere Foundation (VVF), which come at “half the list price compared to past pricing.”

“Broadcom will continue to create value within the VMware partner ecosystem, because partners are critical to our customers' success and our own success,” Tan said. 

The firm’s CEO was careful to mention, however, that an incorporation of the VMware partner ecosystem in the Broadcom partner ecosystem would “require some adjustments.”

Tan described some of these adjustments, such as the standardization of both pricing metrics and technology stacks across cloud providers, as well as the transition to a subscription-based pricing model.

It is within the terms of this subscription-based model, though, that CISPE takes issue with Broadcom, citing unfair and restrictive licensing practices that undermine choice and prompt vendor lock-in. 

While subscription licensing in its ideal form should allow for flexibility in cost as users scale resources according to demand, CISPE said Broadcom’s new terms act in a different way. 

“Broadcom’s new terms are the opposite and are in essence anti-cloud, forcing partners to commit and pay in advance for virtualization capacity that they may never need,” CISPE said.

By focusing so heavily on the subscription-based pricing model and positioning the move as one likely to “fuel continuous innovation”, CISPE claimed that Broadcom was attempting to “obfuscate” the key issues in the dispute. 

“What threatens the economic viability of many cloud services used by customers in Europe, are the massive and unjustifiable hikes in prices, the re-bundling of products, altered basis of billing and the imposition of unfair software licensing terms that restrict choice and lock-in customers and partners,” CISPE said. 

Others in the industry have also expressed criticism, such as the CEO of Civo, Mark Boost. He told ITPro that Broadcom’s statement offered nothing in the way of remedying rising tensions in the cloud community. 

“The CISPE is absolutely right to reject Broadcom’s changes. They are empty words and confirm what many VMware customers have known for a while,” Boost said.  

“Alongside licensing costs, there’s growing concern Broadcom’s decisions will stifle innovation and harm cloud competition,” he added. 

Broadcom moves “adding insult to injury” 

Not satisfied in calling out the unfair terms of Broadcom’s licensing strategy, CISPE also made note of Broadcom’s more superficial failings.

Tan, for example, announced free access to zero-day security patches for users not wishing to continue using VMware under its updated licensing structure, a move CISPE described as “insulting in its limitations” and tantamount to criminal. 

“Effectively promising no more than to fix critical software flaws that emerge in the product unless the customer decides to move to the new subscription license verges on racketeering,” CISPE said.

Similarly, CISPE called out the tone taken by Broadcom in its “lecturing” of customers and its claims of lowered prices which, according to CISPE, go against “real-world evidence to the contrary.” 

George Fitzmaurice
Staff Writer

George Fitzmaurice is a staff writer at ITPro, ChannelPro, and CloudPro, with a particular interest in AI regulation, data legislation, and market development. After graduating from the University of Oxford with a degree in English Language and Literature, he undertook an internship at the New Statesman before starting at ITPro. Outside of the office, George is both an aspiring musician and an avid reader.