Broadcom has upped VMware licensing costs by between eight to 15 times since it took over the organization, and a lack of alternatives in the tech industry means trade and end customers have no choice but to play ball.
This is the according to the European Cloud Competition Observatory (ECCO), an independent body formed by customer organizations, and CISPE – a trade association of 37 cloud providers in the region – to monitor the behavior of software vendors accused of abusing their monopoly position.
The latest report issued today by ECCO on Broadcom-owned VMware says most CISPE members were forced to renew licensing agreements.
“However, these agreements were often signed under significant pressure, influenced by a lack alternatives, abrupt contract terminations, and financial incentives such as rebates for longer-term commitments,” it claims.
Despite putting pen to paper, “these customers continue to face substantial financial burdens and operational disadvantages due to the imposed terms” of the Broadcom’s revamped licensing framework for VMware.
The chips ‘n’ software giant killed the perpetual licenses and monthly “pay-as-you-go” pricing models on VMware products, and rationalized the portfolio into a few large bundles that are only available on subscription with a three-year minimum commitment.
ECCO likens this to an electricity provider deciding to charge you based on the assumption you run your heating full-blast 24×7 rather than on actual usage, and insisting you pay up front a year or more in advance.
Broadcom, ECCO says, “unilaterally and without sufficient notice” terminated existing licensing agreements, some of which had been in place for over 10 years, in order to compel customers holding them to accept the new terms.
As The Register reported last year, it also ditched VMware’s channel program for Cloud Services Providers (CSPs) and only invited the largest such operators to join its own Broadcom partner program.
This latest report highlights that recent actions by Broadcom have, in ECCO’s words, “worsened the situation for European cloud infrastructure providers, their customers, both private and public sector, which depend on VMware virtualization software.”
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Source: VMware price hikes? 800-1,500%, claim Euro customers • The Register
Robin Edgar
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