Since completing its ~$61 billion acquisition of VMware, Broadcom has wasted no time reshaping the virtualization services provider to fit its aggressive enterprise software strategy. Among the first and most controversial moves was the discontinuation of perpetual licenses, forcing customers into pricey bundled subscriptions that make no sense for many organizations.
Not long after, they axed the VMware Cloud Services Provider program, doing away with a crucial channel for third-party service providers and cloud partners.
And now, it seems Broadcom has employed a new tactic to make life difficult for perpetual license holders.
Broadcom is Strong-Arming Enterprises
Source: Ars Technica
Shared with Ars Technica is an audit letter sent to a VMware user in the Netherlands who holds a perpetual license. This notifies the company that it has been selected for a formal review of its VMware software usage and licensing compliance.
The letter, dated June 20, states that the audit will be conducted by Connor Consulting and may involve fieldwork, remote testing, and meetings with their accounting, licensing, and IT departments.
The employee who spoke with Ars Technica regarding this also stated that:
Because we are focusing on saving costs and are on a pretty tight financial budget, this will likely have impact on the salary negotiations or even layoffs of employees. Currently, we have some very stressed IT managers [and] legal department [employees] …
They further added that they aren’t sure if their employer exceeded its license limits, but if they did, the financial consequences could be huge.
So, is Broadcom now in the business of bankrupting others? Maybe, because that’s precisely how their licensing enforcement is starting to look.
There have also been reports of Broadcom sending cease-and-desist letters threatening audits, with some companies being targeted even though they had not used any VMware updates since their support contracts ended.
I must say, it looks bad, and things appear to be getting worse. While there have been growing calls to investigate Broadcom's aggressive and possibly anti-competitive licensing practices, not much has been done so far. For now, companies are left to deal with the consequences on their own.
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