The recent lawsuit between AT&T and Broadcom brings to light the growing discontent over VMware’s transition from perpetual licenses to a subscription-only model. Broadcom, which acquired VMware for $69 billion in 2023, is pushing this shift, and the accelerated timeline has frustrated long-standing VMware customers. AT&T, in particular, claims that Broadcom is unfairly leveraging the transition to force customers into buying services they neither want nor need.
In its defense, Broadcom argues that the contract terms allow VMware to retire products and services, and it maintains that the move to a subscription model aligns with broader software industry trends. The company emphasizes that this strategy was already underway before the acquisition, although many customers have noted the acceleration post-acquisition. Critics argue that the change is a blatant effort to maximize revenue, regardless of customer impact.
AT&T’s legal challenge reflects broader concerns among VMware users who see the shift as a departure from flexibility. A recent survey by cloud provider Civo found that more than half of VMware customers are considering alternative solutions. This unease is compounded by Broadcom’s decision to discontinue support for perpetual licenses unless customers adopt subscription bundles, prompting some to question the long-term viability of their VMware investments.
As the legal proceedings unfold, the dispute could have significant implications for the virtualization landscape. The outcome may not only affect AT&T but also influence other companies’ decisions regarding VMware’s software. If the tide turns against Broadcom, it could pressure the company to reconsider its licensing strategy or risk losing a substantial portion of VMware’s customer base.
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