Rethinking Vendor Trust – Broadcom’s Blow to Fair Trade and IT Stability

Imagine purchasing a product with the understanding that you can maintain and service it for years to come. Now imagine that the company that sold you the product changes the rules, telling you that you can only keep using it if you pay for a more expensive and ongoing service you didn’t agree to when you bought it. This is what Broadcom has done to businesses using VMware software.

This issue isn’t just about IT—it’s about fairness, trust, and the precedent it sets. If Broadcom can retroactively change the rules for its software, what’s stopping similar tactics for consumer products, apps, or even services we use every day? The possible impact can be far and wide, as it opens the door for companies to devalue what you’ve already paid for and force you into costlier arrangements.

This move is more than a cost shift—it’s a disruption to trust in enterprise agreements, operational stability, and future IT investments, and fundamentally alters the value proposition upon which many organizations based their purchasing decisions.

Broadcom’s decision to discontinue Support and Subscription Services (SNS) for VMware perpetual licenses is a clear example of unfair trade practices. If companies can retroactively alter licensing agreements, customers are left vulnerable to coercive practices that devalue their investments, creating financial uncertainty and operational risk.

For years, perpetual licensing offered businesses a predictable, stable investment in critical IT infrastructure. Businesses purchased these licenses with the understanding that SNS would remain available to maintain functionality and security. Broadcom has now retroactively devalued this model, forcing companies to subscribe to services that may not align with their budgets or operational needs.

The termination of perpetual license support by Broadcom is a wake-up call for businesses financial planning and raises serious concerns about the honorability of this posture.

We must hold vendors accountable to honor their commitments and preserve the integrity of investments, and Broadcom’s actions deserve scrutiny, not just for the IT industry but also for what this could mean for consumer rights in the future.

For organizations relying on VMware products, this change leads to unexpected costs, compliance issues, and potential disruptions. It also raises a more profound question: how do we ensure that our vendors remain trustworthy and honor long-term commitments?

Potential Legal Venues and Claims

  • Breach of Trust and Contractual Expectations
  • Potential Legal and Ethical Violations
  • Breach of Implied Covenant of Good Faith and Fair Dealing
  • Misrepresentation or Fraudulent Inducement
  • Unfair Trade Practices and Customer Coercion
  • Operational Risks to Critical Systems
  • Class Action Lawsuits
  • Breach of Warranty
  • Antitrust Claims

AT&T Services, Inc. v. Broadcom Inc.

AT&T Services, Inc. v. Broadcom Inc. (as successor to VMware, Inc.) and VMware, Inc.
654490/2024 – New York County Supreme Court

Verified Complaint filed in the New York Supreme Court. The complaint alleges breach of contract, breach of the implied covenant of good faith and fair dealing, and seeks declaratory and injunctive relief.

654490_2024_AT_T_SERVICES_INC_v_BROADCOM_INC_et_al_COMPLAINT_2Download

Broadcom’s decision has led to a notable case involveing AT&T, which filed a lawsuit against Broadcom in August 2024. AT&T alleged that Broadcom breached their contract by refusing to renew support services for previously purchased perpetual VMware software licenses unless AT&T agreed to purchase additional bundled subscription services.

AT&T’s lawsuit emphasized the critical role of VMware’s software in its operations, supporting approximately 75,000 virtual machines across 8,600 servers. The telecommunications giant argued that losing support could lead to operational disruptions, potentially affecting services provided to millions of customers, including first responders and national security communications.

In response, Broadcom contended that AT&T was not entitled to renew support services, citing an “End of Availability” provision that allows VMware to retire products and services upon notice. Broadcom also argued that AT&T had been aware of VMware’s transition to a subscription model and had sufficient time to adapt accordingly.

The dispute was closely monitored by the industry, as it highlighted the challenges and customer dissatisfaction arising from Broadcom’s shift in licensing strategy.

In October 2024, Broadcom and AT&T reached a settlement, the terms of which were not publicly disclosed.

Broadcom’s move away from perpetual licenses has prompted scrutiny from other customers and industry observers, raising questions about the company’s commitment to honoring existing agreements and the impact on customer relationships.

While the AT&T lawsuit is a prominent example, it reflects broader concerns within the IT ecosystem.

A Call to Action

This issue extends beyond a single vendor or product—it challenges the foundational trust between technology providers and their customers. Broadcom’s actions warrant scrutiny not only for their immediate impact but for the precedent they set in devaluing perpetual license models.

Organizations, regulators, and policymakers must evaluate this shift carefully to ensure fair treatment, protect operational continuity, and maintain competition in the enterprise IT market.

We must act to prevent a dangerous precedent that places businesses at the mercy of vendor-driven licensing changes, protecting the long-term integrity of enterprise technology investments.

Take Action: Sign the Petition Now!

We’re calling on Broadcom to reinstate SNS for perpetual licenses and honor their original agreements. Together, we can send a clear message that businesses and professionals will not tolerate unfair practices.

Your voice matters. By signing this petition, you’ll help bring attention to this issue and push for accountability from one of the industry’s largest players. With enough support, we can ensure this critical issue reaches the desks of industry leaders, regulators, and policymakers.

📢 Sign the Petition on Change.org Now!

Every signature counts. Share the petition with your network and join us in the fight for fairness in IT licensing!

Regulatory Complaints Options

Letter to Regulatory Agencies

Subject: Urgent Concern regarding Broadcom’s Discontinuation of Perpetual License Support and Its Implications for Fair Trade Practices

[Date]

[Recipient Name/Title]
[Agency/Committee/Organization Name]
[Address]
[City, State, ZIP]

Dear [Recipient Name/To Whom It May Concern],

I am writing to formally raise concerns regarding Broadcom’s decision to discontinue Support and Subscription Services (SNS) for VMware perpetual license holders, which has forced customers to transition to a subscription-based model. This decision, in my view, raises serious questions about the fairness, legality, and ethical implications of such a fundamental shift in licensing practices.

Background

For many years, VMware’s perpetual licensing model has been a cornerstone of IT infrastructure, allowing organizations to make substantial upfront investments with the assurance of renewable SNS to maintain security, compliance, and operational stability. With Broadcom’s acquisition of VMware, perpetual SNS has been terminated, effectively retroactively devaluing these licenses and creating significant operational and financial risks for customers.

Concerns

  1. Breach of Trust and Contractual Expectations
    VMware perpetual licenses were marketed with the understanding that SNS would remain available to maintain functionality and security. Broadcom’s decision to unilaterally discontinue SNS fundamentally changes the value proposition of these licenses, impacting organizations that rely on them for critical operations.
  2. Unfair Trade Practices and Coercive Behavior
    The elimination of SNS leaves customers with no choice but to adopt subscription models that may not align with their needs or budgets. This shift raises questions about anti-competitive practices, particularly tying arrangements and forced transitions to services that customers did not initially agree to purchase.
  3. Impact on Critical Infrastructure
    Many organizations depend on VMware products for mission-critical operations. Broadcom’s decision jeopardizes the stability and security of these systems, increasing the risk of disruptions, compliance violations, and financial losses.
  4. Potential Legal Violations
    Broadcom’s actions may violate federal and state laws, including:
    • Antitrust laws: Forcing customers into subscription limits and imposing undue financial burdens.
    • Consumer protection laws: Perpetual licenses sold with the implied promise of ongoing SNS are now rendered less functional without proper financial accommodation or transitional options.

Request for Action

I respectfully urge your office to investigate the following:

  • Whether Broadcom’s actions constitute anti-competitive behavior or violate unfair trade practices laws.
  • The legal and ethical implications of retroactively devaluing perpetual licenses without providing viable alternatives for SNS.
  • The broader impact on organizations relying on VMware products, particularly in critical sectors like healthcare, telecommunications, and public safety.

Additionally, I request that Broadcom be required to:

  • Offer transitional support options for perpetual license holders.
  • Provide transparency regarding the financial and operational impact of this policy change on its customers.

Conclusion

Broadcom’s decision sets a dangerous precedent in the IT industry, undermining trust in perpetual licensing models and threatening operational stability for organizations worldwide. I urge your office to take swift and decisive action to address these concerns and ensure fair treatment of affected customers.

Please do not hesitate to contact me if further information or documentation is needed. I am available to discuss this matter at your earliest convenience.

Thank you for your attention to this important issue.

Sincerely,
[Your Full Name]
[Your Title]
[Your Organization]
[Contact Information]

Key Contacts to Consider

To effectively address our concerns, we can engage with specific congressional committees and representatives who oversee consumer protection matters.

Here are key contacts to consider:

Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights

Senator Amy Klobuchar (D-MN)

As Chair, Senator Klobuchar leads the subcommittee responsible for overseeing antitrust enforcement and competition policy.

Senator Mike Lee (R-UT)

Senator Lee is the Ranking Member and leading Republican on the subcommittee, focusing on antitrust issues.

House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust

Representative Thomas Massie (R-KY)

Rep. Massie leads the subcommittee overseeing antitrust matters and regulatory reforms.

Representative David Cicilline (D-RI)

Rep. Cicilline serves as the senior Democrat on the subcommittee, with a focus on antitrust issues.

House Energy and Commerce Subcommittee on Innovation, Data, and Commerce

Representative Gus Bilirakis (R-FL)

Rep. Bilirakis leads the subcommittee overseeing consumer protection and commerce issues.

Representative Jan Schakowsky (D-IL)

Rep. Schakowsky serves as the senior Democrat on the subcommittee, focusing on consumer protection.

Federal Trade Commission (FTC) – Office of Congressional Relations

The FTC enforces federal antitrust and consumer protection laws and monitors unfair business practices, including tying arrangements, anti-competitive behavior, and customer coercion.

U.S. Department of Justice (DOJ) – Antitrust Division

The DOJ investigates potential violations of antitrust laws, including anti-competitive mergers and business practices.

Advocacy and Other Industry Groups

Public Knowledge
  • Why: Public Knowledge is a consumer advocacy group that focuses on promoting competition and fair digital markets.
  • Website: Public Knowledge Contact Page
Electronic Frontier Foundation (EFF)
  • Why: EFF advocates for digital rights, fair technology policies, and corporate accountability.
Information Technology Industry Council (ITI):
  • Why: ITI advocates for fair trade practices and policies that promote innovation and competition.
  • Contact: ITI Contact Page
CompTIA Public Advocacy

Engagement Steps

  1. Compile detailed information about how Broadcom’s policy change adversely affects your organization and the broader market.
  2. Write a concise letter outlining your concerns, referencing potential antitrust and consumer protection issues; use the letter above as a template.
  3. Contact the above-listed officials and agencies, providing your documentation and requesting an investigation or policy review.
  4. Maintain communication to track the progress of your concerns and offer additional information if needed.

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