Users of VMware software with perpetual licenses without active support receive warning letters from Broadcom. The company threatens audits and legal action.
Since the acquisition of VMware in November 2023, Broadcom has completely revised the company’s sales model. Perpetual licenses have been discontinued and customers are now required to switch to subscription models. Support for existing licenses is only available if there is an ongoing contract.
Many customers choose to continue using their VMware installations without support while exploring alternatives. At the same time, Broadcom also terminated many VMware resellers.
Updating Means Breach of Contract
Recently, several users of expired licenses have received a so-called cease-and-desist letter from Broadcom. This letter states that using updates, patches, or extensions after the maintenance contract has expired constitutes a breach of contract.
Broadcom demands that such software be removed immediately. Only zero-day patches are still allowed. The letter is signed by Broadcom’s managing director Michael Brown and states that there is a violation of intellectual property rights, potentially resulting in claims.
According to ArsTechnica, customers of the Canadian Members IT Group also received these letters, even if they were no longer using updates. One customer received the letter six days after the maintenance contract expired. Online, users share similar stories. In some cases, companies received a letter even after they had already switched to another platform such as Proxmox.
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Possible Audits and Legal Actions
In addition to prohibiting the use of updates, Broadcom also mentions in the letters that the company can conduct audits. According to Broadcom, not reporting updates after contract expiration may constitute an additional breach of contract. This allows Broadcom to reserve the right to take legal action against customers or have them audited.
Dean Colpitts, CTO at Members IT Group, criticized this approach to ArsTechnica. He calls the audit policy unrealistic, as customers can easily hide what they are using, according to him. Broadcom did not respond to a request for comment.
Since Broadcom’s change of course, many smaller companies and service providers have ceased or reduced their collaboration with VMware. For service providers like Members IT Group, it’s now crucial to ensure that employees do not apply unauthorized updates to customers.
Broadcom has previously asserted itself legally against parties such as AT&T and Siemens in disputes over VMware usage. The company’s new direction continues to spark controversy, even though Broadcom’s financial performance shows that the strategy is paying off for now. Recently, Broadcom increased its prices for smaller customers. The largest customers receive preferential treatment.