Part 6 of a sourced series. Every fact links to its source — the company's own filings, court reporting, regulator-facing complaints, and reputable journalism. Accusations are labeled as allegations and attributed to who made them. Nothing here says Broadcom broke the law; no court or regulator has found that. My opinions are marked. Corrections policy at the bottom; an evidence explorer lets you check every claim.
The day the perpetual license died
For decades, enterprise software came with a deal you understood: pay once, own it forever, pay a smaller fee if you want ongoing support. Then one of the most important pieces of infrastructure software on earth changed owners.
On November 22, 2023, Broadcom completed its acquisition of VMware — a deal valued at roughly $69 billion (about $61 billion in cash and stock, plus around $8 billion of assumed VMware debt) (Broadcom IR; Help Net Security).
What happened next reshaped a lot of IT budgets — and lit a fuse that is still burning.
Subscription, or nothing
After the close, Broadcom stopped selling new perpetual VMware licenses and moved customers to subscription-only licensing, collapsing a sprawling product catalog into a handful of bundles led by VMware Cloud Foundation (VCF) and vSphere Foundation (The Register).
Broadcom doesn't hide from this. It defends it. The company's framing, via CEO Hock Tan, is that subscription pricing is simply where the whole industry already was: "VMware has been moving to a subscription model, the standard for the software industry, for several years — beginning before the acquisition by Broadcom" (The Register).
So the model change isn't really in dispute. What's contested is the price and the enforcement — and that's where the lawyers showed up.
AT&T takes it to court
On or about August 29, 2024, AT&T filed suit against Broadcom in the Supreme Court of the State of New York, alleging breach of contract. AT&T's claim: it had a contractual option to renew support on its existing, pre-acquisition VMware agreement for two more years, and Broadcom "is refusing to honor" that extension unless AT&T buys new subscription bundles (The Register; Network World).
The language in the filing is not subtle. AT&T alleged Broadcom's conduct was "an attempt to bully AT&T into paying a king's ransom for subscriptions AT&T does not want or need," and said the affected systems run on about 8,600 servers hosting roughly 75,000 virtual machines — some serving national security and public-safety agencies, and the Office of the President (The Register).
Read that carefully: those are AT&T's words, from AT&T's complaint. "Bully," "king's ransom," and the server counts are allegations a litigant put on the record — not findings, and not mine. Broadcom said at the time it "strongly disagrees."
The number everyone quoted
Here's the figure that traveled fastest: AT&T claimed in its filing that its VMware costs would jump by about 1,050% under Broadcom's terms (CIO Dive).
That number is doing a lot of work in a lot of headlines, so it's worth being precise: 1,050% is AT&T's own assertion from its complaint — not an independently audited or court-established price increase. Tellingly, other coverage of the same filing carried no percentage at all, which is exactly what you'd expect from a figure that lives in a pleading rather than in a verified invoice (Network World).
And then the case ended without anyone proving it.
It settled — with no verdict
On November 22, 2024, AT&T and Broadcom told the court they had reached a settlement. The terms were not disclosed (CIO Dive).
This matters for how you read the whole episode: a settlement is the existence of a deal to stop fighting. No court ruled that Broadcom acted unlawfully. The 1,050% claim was never adjudicated. Whatever each side believed, the dispute resolved privately, with no admission and no finding.
Europe's cloud providers escalate
The friction wasn't only one big customer in the United States. In Europe, the trade group CISPE — Cloud Infrastructure Services Providers in Europe — opened two distinct fronts.
First, the merger itself. On July 24, 2025, CISPE filed an action at the EU General Court seeking to annul the European Commission's decision approving Broadcom's acquisition of VMware, arguing the Commission had cleared the deal without imposing remedies. (The EC had approved the merger on July 12, 2023; its decision summary was published May 13, 2025.) CISPE's framing: "unfair new licensing terms enforced by Broadcom affect almost every European organisation using cloud technology" (CISPE; The Register).
Second, a competition complaint. On March 19, 2026, CISPE filed a complaint against Broadcom with the European Commission's competition directorate over the January 2026 termination of the VMware Cloud Service Provider (VCSP) program in Europe, and requested interim measures. In it, CISPE alleged that price hikes, bundling, and demands for up-front payments had "cumulatively … increased costs by more than 1,000 percent" — a tenfold rise since the acquisition (CISPE; The Register).
Same caution as before: the "more than 1,000 percent" / tenfold figure is CISPE's allegation — a complainant's number, not an audited or adjudicated one. The filing is a fact; the magnitude is a claim.
Broadcom's answer
Broadcom rejected the complaint, and not gently. It said it "strongly disagrees with the allegations by CISPE, an organisation funded by hyperscalers" that, in Broadcom's telling, "misrepresent[s] the realities of the market." The European Commission, for its part, confirmed only that it received the complaint and is "currently assessing this complaint in line with our standard procedures" — careful, neutral language that is not a finding of any infringement (The Register).
Broadcom's broader defense, from Hock Tan back in April 2024, leans on continuity and concessions: subscription licensing is the industry standard; existing perpetual licenses remain usable; support extensions were granted to many renewing customers; and free zero-day security patches were offered for supported vSphere versions — "free access to zero-day security patches for supported versions of vSphere" (Constellation Research). That's the company's side, and it deserves to be heard alongside the complaints.
My read
Opinion — Michael. I won't tell you Broadcom did anything illegal — no court found that, the AT&T case settled with no admission, and the EU is still only "assessing." So set the crime question aside, because it isn't the point. The point is the mechanism. When you buy the thing millions of businesses already depend on and can't easily leave, you inherit enormous pricing power overnight — and the rational move, the one the scoreboard rewards, is to use it. End the perpetual license, bundle everything, and the customer's choice narrows to "renew on the new terms" or "rip out the foundation of your data center." That's not villainy; that's leverage doing what leverage does. The disputed percentages may be litigants' numbers, but the direction of the squeeze isn't really in question — even Broadcom's own defense is about softening it, not denying it happened. Bad systems, not bad people — and a system that turns "we own the platform you can't escape" into a revenue event.
You don't have to take my read. The court reporting, CISPE's filings, and Broadcom's own statements are linked above — judge them yourself.
Sourcing & corrections
The acquisition close and value are from Broadcom's own IR release and Help Net Security; the subscription shift and AT&T's allegations from The Register and Network World; the 1,050% figure and the settlement from CIO Dive; CISPE's annulment action and competition complaint from CISPE's own releases and The Register; Broadcom's rebuttal and Hock Tan's defense from The Register and Constellation Research — each linked inline and matched in the explorer. The AT&T complaint's quotes are sourced to reporting that cites the filing verbatim; the 1,050% and "more than 1,000 percent" figures are litigants' allegations, not audited facts. Spot an error or something unfair? Email mpolzin@zimzap.com or message me on LinkedIn — I'll review and correct.
Next — Part 7: "The WordPress War."
🔎 Check it yourself: explore every claim →
Top comments (0)