Channel markets, Cloud migration

Trade Group Pushes Back on Broadcom Licensing Changes

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Broadcom's attempts to quell complaints about VMware licensing and pricing seem to be falling flat. Critics of the U.S. chipmaker, which acquired VMware for $61 billion last year, rejected changes to its cloud licensing practices, Reuters reported, saying the adjustments did not address their complaints about alleged price hikes, unfair software licensing terms, and tying products together.

The complaints come from Beltug, a Belgian association of business users, and its counterparts, France's Cigref, CIO platform Nederland, and VOICE Germany, according to Reuters. Last month, these groups, along with trade body CISPE, whose members include Amazon and 26 small EU cloud providers, also complained about Broadcom allegedly unilaterally cancelling license terms for essential virtualization software, Reuters reported. The groups took their grievances to EU antitrust chief Margrethe Vestager, EU industry chief Thierry Breton and Commission President Ursula von der Leyen.

While some of VMware's changes were already in the pipeline even before its acquisition by Broadcom, CEO Hock Tan announced in a blog post last week that the company was also making several changes that seem aimed at deflecting the criticism and addressing the complaints.

Cloud Trade Group Decries Price Hikes, Re-bundling

But CISPE said the issue was not about Broadcom's subscription license model. "What threatens the economic viability of many cloud services used by customers in Europe are the massive and unjustifiable hikes in prices, the re-bundling of products, altered basis of billing and the imposition of unfair software licensing terms that restrict choice and lock-in customers and partners," the members said in a joint statement.

Broadcom said it was creating more choice for customers and partners.

"Our simplified offering at a significantly reduced price responds to customer feedback, and is focused on facilitating seamless workload management," Broadcom said in a statement.

The trade groups, including CISPE, urged EU antitrust regulators to open an investigation into the issue. EU antitrust regulators had asked rivals and customers for their views.

We'll keep following the story here at ChannelE2E.