A Dutch court has ordered Broadcom to continue providing support for VMware so that a government agency can safely migrate, even without renewing the licenses.
The Dutch Rijkswaterstaat (RWS) has won a significant victory in court. The court ruled that Broadcom cannot simply stop supporting the VMware products of the government agency, even though Rijkswaterstaat does not want to renew the support license under the new terms. Broadcom must provide exit support at a fair price. The ruling could set a precedent.
85 Percent more Expensive
RWS has been using VMware products for over fifteen years through a perpetual license. This was combined with a support agreement through a reseller, each time for three years. However, Broadcom has used the acquisition of VMware as an opportunity to overhaul the entire licensing model and drastically increase prices. There is no longer any mention of perpetual licenses, products are artificially grouped into new bundles, and even the partner network was affected.
read also
No Progress: Broadcom’s Licensing Practices Still ‘Anti-Competitive, Unfair, and Unethical’
Under these circumstances, RWS did not want to renew. Like other customers, Rijkswaterstaat is in a difficult position: migrating from VMware takes time and Broadcom does not want to provide support and patches in the meantime without a new expensive support and license agreement. RWS itself determined that the cost of using VMware under the new terms would increase by 85 percent from 2.14 million euros per year to nearly four million euros.
Careless Practices
The court in the Netherlands takes a dim view of Broadcom’s practices. It calls the practice of suddenly raising prices without providing a safe way for users to transition away, careless.
The judge believes that Broadcom must enable RWS to safely migrate away from the VMware products given the circumstances. Therefore, Broadcom must continue to provide sufficient support after the last renewal to ensure the proper functioning of the products.
Penalty
RWS will pay 1.76 million euros per year through the reseller for a maximum of two years, during which it must receive the necessary support while phasing out VMware. If Broadcom does not meet this support obligation, a penalty of 250,000 euros per day will follow, with a maximum of 25 million euros, payable to Rijkswaterstaat.
The ruling in summary proceedings could have far-reaching consequences. The court’s arguments for mandatory exit support are based on the behavior of Broadcom and VMware. The fact that RWS is a critical government institution does not play a role in the reasoning. It is conceivable that this could set a precedent, offering other affected customers a way out.