AT&T sues Broadcom for breaching VMware support extension contract
(2024/09/05)
- Reference: 1725517506
- News link: https://www.theregister.co.uk/2024/09/05/att_sues_broadcom_vmware_support/
- Source link:
US telecoms giant AT&T has alleged Broadcom has reneged on an extended support deal it struck with VMware, and warned the consequences could be massive outages for customer support operations – and even the US president's office.
A [1]complaint [PDF] filed last week in the Supreme Court of New York State explains that AT&T holds perpetual licenses for VMware software and paid for support services under a contract that ends on September 8. The complaint also alleges that AT&T has an option to extend that support deal for two years – provided it activates the option before the end of the current deal.
AT&T's filing claims it exercised that option, but that Broadcom "is refusing to honor" the contract.
[2]
Broadcom has apparently told AT&T it will continue to provide support if the comms giant "agrees to purchase scores of subscription services and software."
[3]
[4]
AT&T counters that it "does not want or need" those subscriptions, because they:
Would impose significant additional contractual and technological obligations on AT&T;
Would require AT&T to invest potentially millions to develop its network to accommodate the new software;
May violate certain rights of first refusal that AT&T has granted to third parties;
Would cost AT&T tens of millions more than the price of the support services alone.
The references to "new software" almost certainly allude to VMware Cloud Foundation – Broadcom's integrated bundle of VMware's compute, storage, and network virtualization products, plus associated management tools. Broadcom has stopped selling individual VMware products and now sells only bundles that include several software products and support.
Legal filings are often dense and dull, but AT&T's lawyers have flouted that style convention. They accuse Broadcom of making an "attempt to bully AT&T into paying a king's ransom for subscriptions AT&T does not want or need" and write that this lawsuit represents the telecoms mega-corp "refusing to be extorted."
The complaint also suggests Broadcom's refusal to extend support creates enormous risk for US national security – some of the ~8,600 servers that host AT&T's ~75,000 VMs "are dedicated to various national security and public safety agencies within the federal government as well as the Office of the President." Other VMs are relied upon by emergency responders, and still more "deliver services to millions of AT&T customers worldwide" according to the suit.
[5]
Without support from Broadcom, AT&T claims it fears "widespread network outages that could cripple the operations of millions of AT&T customers worldwide" because it may not be able to fix VMware's software.
[6]Warren Buffett’s favorite insurer GEICO drops VMware for OpenStack
[7]Broadcom boss Hock Tan says public cloud gave IT departments PTSD
[8]VMware reveals how it will deliver Broadcom's unified hybrid cloud … sometime soon
[9]Veeam debuts its Proxmox backup tool – and reveals outfit using it to quit VMware
An AT&T spokesperson told The Register "We have filed this complaint to preserve continuity in the services we provide and protect the interests of our customers."
A VMware spokesperson sent us the following statement:
"Broadcom strongly disagrees with the allegations and is confident we will prevail in the legal process. VMware has been moving to a subscription model, the standard for the software industry, for several years – beginning before the acquisition by Broadcom. Our focus will continue to be providing our customers choice and flexibility while helping them address their most complex technology challenges."
Ouch
AT&T's suit will sting, because the comms concern is precisely the sort of outfit Broadcom has targeted as a user of Cloud Foundation.
Customers that go all-in on Cloud Foundation, Broadcom has insisted, will emerge with reduced costs and agile private clouds that represent competitive advantage.
AT&T appears not to have bought in to that vision.
That it's not done so is perhaps more significant than the accusation of Broadcom playing hardball on support licenses – because VMware's new owner likes to prioritize the needs of the very largest users of its software products.
[10]
AT&T is [11]ranked at number 74 on the Fortune 500.
The unusually vivid language in its complaint suggests the telco is angry. On Thursday, we may all learn if AT&T alone in its anger. That's when Broadcom announces its quarterly results, after previously offering [12]guidance that VMware revenue will rise every quarter.
The Register has the popcorn ready. ®
Get our [13]Tech Resources
[1] https://regmedia.co.uk/2024/09/05/pacer_att_broadcom_complaint.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/08/28/geico_vmware_openstack_migration/
[7] https://www.theregister.com/2024/08/27/vmware_explore_hock_tan_keynote/
[8] https://www.theregister.com/2024/08/27/vmware_cloud_foundation_nine_preview/
[9] https://www.theregister.com/2024/09/02/veeam_proxmox_support_arrives/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://fortune.com/ranking/global500/search/?sector=Telecommunications
[12] https://www.theregister.com/2024/03/08/broadcom_q1_2024/
[13] https://whitepapers.theregister.com/
A [1]complaint [PDF] filed last week in the Supreme Court of New York State explains that AT&T holds perpetual licenses for VMware software and paid for support services under a contract that ends on September 8. The complaint also alleges that AT&T has an option to extend that support deal for two years – provided it activates the option before the end of the current deal.
AT&T's filing claims it exercised that option, but that Broadcom "is refusing to honor" the contract.
[2]
Broadcom has apparently told AT&T it will continue to provide support if the comms giant "agrees to purchase scores of subscription services and software."
[3]
[4]
AT&T counters that it "does not want or need" those subscriptions, because they:
Would impose significant additional contractual and technological obligations on AT&T;
Would require AT&T to invest potentially millions to develop its network to accommodate the new software;
May violate certain rights of first refusal that AT&T has granted to third parties;
Would cost AT&T tens of millions more than the price of the support services alone.
The references to "new software" almost certainly allude to VMware Cloud Foundation – Broadcom's integrated bundle of VMware's compute, storage, and network virtualization products, plus associated management tools. Broadcom has stopped selling individual VMware products and now sells only bundles that include several software products and support.
Legal filings are often dense and dull, but AT&T's lawyers have flouted that style convention. They accuse Broadcom of making an "attempt to bully AT&T into paying a king's ransom for subscriptions AT&T does not want or need" and write that this lawsuit represents the telecoms mega-corp "refusing to be extorted."
The complaint also suggests Broadcom's refusal to extend support creates enormous risk for US national security – some of the ~8,600 servers that host AT&T's ~75,000 VMs "are dedicated to various national security and public safety agencies within the federal government as well as the Office of the President." Other VMs are relied upon by emergency responders, and still more "deliver services to millions of AT&T customers worldwide" according to the suit.
[5]
Without support from Broadcom, AT&T claims it fears "widespread network outages that could cripple the operations of millions of AT&T customers worldwide" because it may not be able to fix VMware's software.
[6]Warren Buffett’s favorite insurer GEICO drops VMware for OpenStack
[7]Broadcom boss Hock Tan says public cloud gave IT departments PTSD
[8]VMware reveals how it will deliver Broadcom's unified hybrid cloud … sometime soon
[9]Veeam debuts its Proxmox backup tool – and reveals outfit using it to quit VMware
An AT&T spokesperson told The Register "We have filed this complaint to preserve continuity in the services we provide and protect the interests of our customers."
A VMware spokesperson sent us the following statement:
"Broadcom strongly disagrees with the allegations and is confident we will prevail in the legal process. VMware has been moving to a subscription model, the standard for the software industry, for several years – beginning before the acquisition by Broadcom. Our focus will continue to be providing our customers choice and flexibility while helping them address their most complex technology challenges."
Ouch
AT&T's suit will sting, because the comms concern is precisely the sort of outfit Broadcom has targeted as a user of Cloud Foundation.
Customers that go all-in on Cloud Foundation, Broadcom has insisted, will emerge with reduced costs and agile private clouds that represent competitive advantage.
AT&T appears not to have bought in to that vision.
That it's not done so is perhaps more significant than the accusation of Broadcom playing hardball on support licenses – because VMware's new owner likes to prioritize the needs of the very largest users of its software products.
[10]
AT&T is [11]ranked at number 74 on the Fortune 500.
The unusually vivid language in its complaint suggests the telco is angry. On Thursday, we may all learn if AT&T alone in its anger. That's when Broadcom announces its quarterly results, after previously offering [12]guidance that VMware revenue will rise every quarter.
The Register has the popcorn ready. ®
Get our [13]Tech Resources
[1] https://regmedia.co.uk/2024/09/05/pacer_att_broadcom_complaint.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/08/28/geico_vmware_openstack_migration/
[7] https://www.theregister.com/2024/08/27/vmware_explore_hock_tan_keynote/
[8] https://www.theregister.com/2024/08/27/vmware_cloud_foundation_nine_preview/
[9] https://www.theregister.com/2024/09/02/veeam_proxmox_support_arrives/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZtmBSSonb2P5fVKwFPcSNgAAAcM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://fortune.com/ranking/global500/search/?sector=Telecommunications
[12] https://www.theregister.com/2024/03/08/broadcom_q1_2024/
[13] https://whitepapers.theregister.com/
Groo The Wanderer
I spent two hours trying to find and download the latest VMware Workstation 17.6 installer after 17.5.5 refused to run my VMs, but you have to be a "member" to download it.
So I reinstalled 17.5.0, booted my VMs, extracted their data, and now Broadcom is invited to insert an unlubricated pineapple up the collective rectal sphincters of the CEO, CFO, board members, and top level management.
And they should be sure to use a fresh pineapple for each insertion; it wouldn't be sanitary otherwise. Wouldn't want management to get any more itches or brain-farts...
the_bunse
I work in a blue chip FTSE100 company and we like many others we talk to have chosen an alternative and will be working over the next year to leave VMware behind. We were left with no choice as we were given the same treatment as AT&T. I am not aware of any large company we talk with keeping VMware beyond the next 18 months. So Broadcom might see some Perpetual license owners renew at the greatly inreased prices in the short term. In the next 6-18 months VMware will be in trouble with a small percentage of the pie. Other companies seem to want the busines and are falling over themselves to help customers move and stay with them.
We saw a similar pricing change with Veeam a few years ago but they were smart enough to back tracked behind the scenes and kept the Bluechips as customers. A very smart move as they know others were waiting to pounce. Broadcom does not seem to understand that VMware has competitors and customers have options....
Properly constructed VM's
Anonymous Coward
Can be migrated between hyperviser systems. Hypervisors are commodities.
A perpetual license, eh ?
Well, now we know just how far Broadcom is willing to go to honor the obligations of the company it bought . . . aka no farther than you can throw it.
This is indeed going to be interesting. A Board who thinks it has all the rights vs a Fortune 500 company that holds part of the security interests of the nation at stake. And all of this based on legal contract.
Methinks Broadcom is going to be eating humble pie pretty soon . . .