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AT&T Sues Broadcom Over VMware Licensing Terms Dispute

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AT&T Sues Broadcom Over VMware Licensing Terms Dispute

AT&T Sues Broadcom Over VMware Licensing Terms Dispute

Telecom giant AT&T has filed a lawsuit against Broadcom, claiming the company is trying to change its VMware licensing terms retroactively. The dispute started when Broadcom refused to allow AT&T to renew support for previously purchased VMware perpetual licenses unless the company agreed to new terms.

Broadcom’s Acquisition of VMware

After acquiring VMware last year, Broadcom made significant changes, including layoffs, dismantling the entire EUC line, and discontinuing the sale of perpetual enterprise licensing. The company switched to a subscription model, which was met with resistance from customers due to increased costs.

AT&T’s Concerns

AT&T operates around 75,000 virtual machines and relies on VMware for customer service and operations management. The company claims Broadcom must provide two more years of service on its previous three-year service agreement. Without support, AT&T risks a critical failure caused by a bug or security issue.

AT&T Seeks Injunction

AT&T has asked the State of New York Supreme Court to impose an injunction to stop Broadcom from shutting down its support. The company seeks “further relief” to remediate the contractual dispute. An AT&T spokesperson stated that the company has filed this complaint to preserve continuity in services and protect customers’ interests.

AT&T claims Broadcom’s demands include purchasing hundreds of millions of dollars’ worth of bundled subscription software and services, which it does not want. The telecom company views this as “bullying tactics” and expects as much given Broadcom’s post-acquisition behavior.

My Thoughts

AT&T-Broadcom Licensing Dispute: A Heavy-Handed Approach to Software Subscriptions

A brewing lawsuit between AT&T and Broadcom over VMware licensing terms has brought to light the reality of software subscriptions and the potential risks they pose for crucial services. Broadcom’s aggressive attempt to retroactively modify VMware licensing terms has put AT&T in a difficult position, and a prolonged dispute could have far-reaching consequences.

The Terms of the Dispute

According to AT&T’s filing, Broadcom is refusing to allow the company to renew support for previously purchased VMware perpetual licenses unless it agrees to new terms. These conditions, characterized by Broadcom as “unfair,” would force AT&T to spend tens of millions more than its current service contract.

AT&T operates around 75,000 virtual machines on nearly 8,600 servers, and failing to secure continued support risks a critical failure. AT&T seeks an injunction from the State of New York Supreme Court to prevent Broadcom from shutting it down.

AT&T views Broadcom’s demands as “bullying tactics,” reflecting on the company’s history of imposing unfavorable subscription models on its clients. As this matter unfolds, we must consider the broader implications of subscription-based software models on businesses and, ultimately, the consumers they serve.

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