Broadcom Mainframe Software Licensing (CA Technologies): Negotiation Strategies for IBM Z Environments

Broadcom Mainframe Software Licensing (CA Technologies)

Introduction – Broadcom’s Mainframe Playbook

In 2018, Broadcom stunned the IT world by acquiring CA Technologies – a powerhouse of mainframe software. This move put Broadcom in control of critical IBM Z tools that many large enterprises rely on for daily operations.

CA’s mainframe portfolio includes solutions for job scheduling (CA 7), database management for DB2, security management (CA Top Secret and ACF2), DevOps and source control (CA Endevor), system automation (CA OPS/MVS), and more.

These tools run mission-critical workloads on IBM Z systems, meaning customers are effectively locked in once the software is deeply embedded in their processes.

Broadcom’s strategy since the CA acquisition has been to treat these mainframe products as a “cash cow.” Mainframe software is a mature market with high reliability requirements and few alternative providers.

Broadcom knows that large enterprises (banks, insurers, government agencies, etc.) cannot easily rip out and replace CA tools without enormous effort and risk.

As a result, Broadcom has adopted a hard-nosed licensing playbook: pushing for higher fees, multi-year commitments, and strict terms that maximize its revenue. IT procurement leaders and license managers must be prepared to counter this playbook with savvy negotiation and proactive contract management.

This guide explains Broadcom’s mainframe licensing models, the risks associated with Broadcom’s default pricing tactics, and strategies for negotiating better deals for CA software on IBM Z.

Why does this matter? If you manage mainframe software contracts, renewals with Broadcom can bring nasty surprises – like double-digit percentage fee increases or bundled “solutions” you didn’t ask for.

With careful planning, however, you can mitigate cost escalation and avoid being trapped in an unfavorable agreement.

Let’s break down the key aspects: how Broadcom licenses CA mainframe software, what behaviors to expect at renewal, and how to negotiate from a position of strength.

Mainframe Licensing Models

Mainframe software is typically licensed based on the size and usage of your IBM Z environment. Broadcom’s CA products generally follow traditional capacity-based licensing models, though newer alternatives are emerging.

It’s critical to understand these models so you know what you’re paying for and how to optimize it:

• Capacity-Based Licensing (MIPS/MSUs): Most CA mainframe tools are sold according to the processing capacity of your mainframe. This is often measured in MIPS (Millions of Instructions Per Second) or MSUs (Million Service Units). In practice, Broadcom will tie license fees to your peak usage or installed capacity on the mainframe. For example, if your mainframe has 1,000 MSUs of capacity, a CA product license may be priced for that full capacity or a subset of it. This model effectively charges a fixed fee for the right to use the software up to a certain performance threshold. The catch: if you upgrade hardware or increase capacity, you are expected to inform Broadcom and pay more for the increased MSUs. Capacity-based licensing has been the norm for decades, but it can lead to overpaying if your usage is much lower than your theoretical capacity.
• Sub-Capacity and Peak Usage Measures: IBM mainframe environments often utilize a rolling 4-hour average (R4HA) to measure peak usage for software billing purposes. Some Broadcom/CA licenses honor sub-capacity pricing (charging based on your actual peak workload rather than full machine capacity), but the administration can be complex. Customers must diligently track usage with tools (like IBM’s SCRT reports) to ensure they’re not exceeding licensed MSUs. If not carefully managed, a sudden spike in workload could exceed your licensed capacity, resulting in compliance issues or additional charges. Always clarify with Broadcom whether a given product is licensed at full capacity or sub-capacity, and ensure your contract defines how usage is measured.
• Flat-Fee or Enterprise Licenses: In some cases, Broadcom may offer a flat-fee license for specific tools or smaller environments. A flat-fee model means you pay a set annual amount, not directly tied to MIPS/MSU count. This might apply to niche utilities or when negotiating an enterprise license for unlimited use of a product. While simpler, flat fees usually assume a fixed scope – for instance, unlimited use up to a certain hardware size or within a particular region or business unit. Be cautious: “flat” doesn’t always mean “forever.” Many flat-fee deals revert to capacity metrics if you exceed the agreed conditions (e.g., adding a new mainframe LPAR or significantly increasing transactions).
• Portfolio License Agreements (PLAs): A Portfolio License Agreement (also known as an Enterprise License Agreement) is a bundled deal that covers multiple CA products under a single contract. Instead of licensing each tool separately, you pay one combined fee (often annually) for a suite of Broadcom mainframe software. PLAs typically allow use of various tools up to a total capacity limit (e.g., a PLA might cover all CA products for up to 5,000 MSUs of mainframe capacity). The advantage is simplified management – one renewal date, one large capacity allocation – and potentially cost savings if you utilize multiple tools. Broadcom often pitches PLAs to large customers as a way to “get it all” and possibly secure a better rate per MSU across the portfolio. However, the risk is you might pay for shelfware (products in the bundle that you never deploy) or lock yourself into a hefty all-or-nothing deal. Ensure any PLA has clear definitions of included products, the total capacity covered, and what happens if you need to add or remove a product.
• Consumption-Based Licensing (MCL): Recently, Broadcom introduced a Mainframe Consumption Licensing (MCL) program, signaling a potential shift in how customers can pay for mainframe software. Under a consumption model, you would pay for only what you use, measured perhaps in MSU-hours or similar units, rather than paying for peak capacity. For example, if you run workloads at full throttle only during month-end processing, a consumption model might bill you for those hours of use instead of charging as if you ran at peak 24/7. Broadcom’s MCL includes features like rolling over unused capacity to future periods and excluding Dev/Test environments from charges. The goal is to provide more flexibility and predictability, especially for customers with highly variable workloads. However, this model is usually offered as a special program and might require a baseline commitment. Currently, traditional capacity licensing remains the dominant approach in Broadcom’s contracts, and not all customers will qualify or benefit from MCL. If your mainframe usage is relatively flat or declining, a consumption model might not save money compared to a well-negotiated fixed license. However, if you experience wild usage spikes or growth, it’s worth discussing MCL options with Broadcom to see if a pay-as-you-go structure could help cap your costs.

In summary, understand which model your Broadcom/CA software is under. Each has pros and cons for budgeting. If Broadcom offers a new model (like a PLA or consumption licensing), analyze it carefully.

Sometimes, these offers can mask higher costs that are rolled up in a “simplified” price. Do the math on your current versus proposed fees to ensure it’s truly a good deal.

Broadcom’s Renewal Pricing Tactics

Broadcom has developed a reputation for aggressive pricing behavior when it comes to renewing mainframe software contracts. Following the acquisition of CA Technologies, many customers reported a significant shift in tone and terms at renewal time.

Here are some common tactics and trends you should anticipate:

• Steep Renewal Uplifts: It’s not unusual for Broadcom to propose double-digit percentage increases in annual fees upon renewal. In fact, some large enterprises have reported initial renewal quotes that were 50–100% higher than their previous rates for the same software. Broadcom’s strategy is often to start with a very high ask, knowing that customers rely on these tools and have limited alternatives. Without negotiated protections, annual maintenance fees may also include built-in escalators (e.g. 7% per year increase by default). The onus is on the customer to push back or these hefty uplifts become the “new normal” in your IT budget.
• Eliminating Legacy Discounts: If you originally licensed CA software years ago under favorable terms or big discounts, expect Broadcom to re-baseline your pricing upward. Broadcom’s playbook is to standardize pricing across customers, meaning any special deals you had with CA Technologies could be at risk. They might claim that your old price was “unusually low” or not aligned with current list prices. The result can be a sharp jump in cost to bring you in line with Broadcom’s targets. Always retain documentation of your entitlement and any pricing guarantees from legacy contracts, and bring those to the table during renewal negotiations to counter unjustified increases.
• “Take-It-or-Leave-It” Stance: Broadcom is known to play hardball, sometimes issuing ultimatums. Some customers have been informed, either implicitly or explicitly, that if they do not accept the new terms (which include higher fees or bundled products), Broadcom will terminate their support or licenses for the software. This is a high-pressure tactic leveraging the mission-critical nature of the tools. In extreme cases, large companies have resorted to legal action to prevent Broadcom from cutting off their systems. The lesson is to never assume Broadcom will extend deadlines or maintain the status quo out of goodwill – they often use the expiration date as leverage to force agreement to their terms. Plan renewals early and be ready to either negotiate hard or execute a contingency plan if Broadcom calls your bluff.
• Bundling and Upselling: A common move by Broadcom is to bundle multiple products or services together in renewal proposals. For example, they might insist that your CA software renewal also include the purchase of additional Broadcom tools or even broader enterprise software (they have acquisitions like Symantec security or VMware now). You may find that to continue receiving support for Product X, Broadcom requires you to upgrade to a more expensive suite or add on Product Y, which you neither need nor originally requested. This bundling can inflate the deal size and potentially leave you with shelfware. It’s a form of vendor lock-in: by intertwining products, Broadcom makes it harder for you to drop any one component without losing a supposed “package discount” or support eligibility. In negotiations, be wary of the “all or nothing” bundle approach – sometimes you can push to renew only what you use, or at least separate the quotes to see the true cost of each component.
• Multi-Year Lock-Ins with No Outs: Broadcom often encourages multi-year agreements (e.g., 3 to 5 years), which can be beneficial if executed correctly; however, their initial offers may lack flexibility. They might present a multi-year contract with pre-set yearly price increases and no ability to reduce scope. The risk is that you lock in a high-cost base and lose the ability to adjust if your mainframe footprint shrinks or you want to drop a product. Broadcom’s default terms usually benefit them – for example, you might be committing to pay for a fixed capacity even if you decommission a mainframe or retire applications. Negotiating terms (such as a “true-down” clause, described later) is essential to avoid being stuck overpaying in years 3 or 4 of a deal. Also, watch out for auto-renewal clauses; Broadcom sometimes attempts to include automatic renewals with built-in hikes if you don’t give notice to terminate well in advance.
• Minimal Price Protections Out-of-the-Box: Unless you explicitly negotiate them, Broadcom contracts often lack caps on price increases and have strict limitations on reducing licenses. Their proposals might not specify a limit on how much they can raise fees after the term, and any additions (such as more MSUs) could be charged at the full list price if not locked in. In other words, the default contract might place all the risk on the customer – you pay more if your usage increases, but you don’t get to pay less if it decreases. Being aware of these one-sided terms is the first step; the next is knowing how to counterbalance them with negotiated clauses.

In summary, expect Broadcom’s renewal quote to be significantly higher than you’d like and bundled with terms favoring Broadcom.

They capitalize on the lack of viable alternatives in the mainframe space and the pain of switching.

Procurement teams need to approach Broadcom renewals with a healthy skepticism and a plan to push back. The next section covers strategies to level the playing field.

Key Negotiation Strategies

Facing a renewal or new contract with Broadcom for CA mainframe software can be daunting, but you are not powerless.

Here are key negotiation strategies to help manage costs and protect your interests.

Use these proactively – the best time to negotiate favorable terms is before you sign, when you have leverage and Broadcom’s sales team is keen to close the deal:

• Benchmark Your Pricing (Know the Market Rate): Information is power. Before negotiating, gather data on what other organizations are paying Broadcom (or previously CA) for similar products. Calculate your current cost per MIPS or MSU for each tool and compare that against industry benchmarks if available. If you have access to user groups or consultants who can share anonymized figures, use that to identify if Broadcom’s quote is way above market. Let’s say you determine that similar enterprises pay $X per MSU for CA 7, and Broadcom is quoting you 2*$X – you now have a case to demand a reduction. Even without external data, benchmark internally to understand trends in your spend (cost per MSU) over the years. A sharp upward deviation requires a challenge. Don’t be afraid to tell Broadcom you believe their price is not aligned with the value or market norms – and be prepared to walk to alternatives if that’s credible (even if alternatives are limited, the threat of optimizing workloads or moving some off mainframe can influence negotiations).
• Leverage Volume and Bundling on Your Terms: Broadcom wants to sell you as much as possible, which oddly can be an advantage if you control the conversation. If you have multiple CA products coming up for renewal, consider co-term and negotiate them together. Bundling your own renewals into a single negotiation increases the deal size, which can motivate Broadcom to offer better overall discounts. For example, instead of renewing CA Top Secret, Endevor, and CA 7 separately throughout the year, align their end dates and negotiate a package discount for renewing all three at once. You can say, “We’ll consider a multi-product agreement, but only if we see a significant cost reduction and favorable terms across the board.” By showing a willingness to spend more in total, you gain leverage to negotiate concessions, such as lower unit pricing or free additional licenses (e.g., adding a development environment at no extra cost). Be cautious, though: ensure you actually need everything in the bundle. Don’t let Broadcom dictate the bundle; you select the products critical to you and use the bigger spend as a bargaining chip for better pricing.
• Insist on True-Down Rights: One of the most important clauses to negotiate is a true-down provision. This gives you the right to reduce your license commitments if your mainframe usage drops or if you decide to retire certain applications. Without a true-down, you’re stuck paying for the originally contracted capacity or quantity, even if half of it becomes unused. Try to include language such as “annually, fees will be adjusted to reflect the actual MSU utilization if lower than the prior commitment”. Broadcom will likely resist this, but you may be able to negotiate a compromise, such as allowing a certain percentage reduction at set intervals. For instance, you might lock Year 1 at 100% of current usage, and have the option in Year 2 to reduce up to 10% if your MSUs have decreased. This is especially vital if your organization has mainframe optimization or migration projects on the horizon. If Broadcom absolutely won’t allow a true down, consider a shorter contract term so you’re not overpaying for the long term. At a minimum, avoid any growth-only clauses (where you pay more if usage increases but never less if it decreases) – make them symmetric if possible.
• Cap Annual Uplifts (No Uncapped Increases): Always put a ceiling on yearly price increases in a multi-year deal. If you sign a 3-year or 5-year agreement, include a clause like “fees shall not increase by more than 3% per year” or whatever low percentage you can negotiate. Broadcom’s standard might be higher (5-7% is common), but push for the lowest cap possible. This protects you from budget shock each year. Also, clarify whether the cap applies to both license and maintenance fees (it should). Sometimes vendors agree to cap maintenance increases but leave license expansion costs open-ended – don’t allow that. If you need additional capacity licenses mid-term, consider locking in the unit price now as well (e.g., “Additional MSUs, if required, can be purchased at the same per-MSU rate as initial licenses, capped at 3% annual increase”). The goal is predictability – you don’t want a surprise 20% hike in year 3 because you forgot to restrict it in the contract.
• Negotiate Portfolio Agreement Flexibility: If you enter a Portfolio License Agreement (PLA) with Broadcom, structure it to your advantage. Key points to negotiate in a PLA:
  • Scope of Products: List exactly which product families are included. Ensure that critical ones are in scope, and be cautious about including too many fringe products that can inflate the fee.
  • Capacity/Usage Limits: Define the total MIPS/MSU (or other metric) the PLA covers. Negotiate a comfortable buffer (so you’re not immediately out of compliance if you grow slightly), and also consider a growth allowance (e.g., the ability to increase usage by X% over the term at no additional cost).
  • Reallocation and Exchange: Include terms that allow you to reallocate usage among the included products as needs change. For instance, if you stop using one tool and start using another more, you shouldn’t have to pay extra as long as you stay under the overall cap. A sample clause might state, “Customer may reallocate portfolio entitlements across included CA products as business needs change, without additional cost, provided total licensed capacity is not exceeded.”
  • Exit and Renewal Options: Very important – what happens when the PLA term ends? Broadcom would love to “renew” you at a higher price when you’re fully dependent on the portfolio. You need an exit strategy. Negotiate a clause that either grants a renewal at a pre-agreed rate cap or allows you to convert the PLA into individual product licenses at reasonable prices if you choose not to renew the whole portfolio. Never sign a PLA that doesn’t specify how you can unwind it, or you’ll be at Broadcom’s mercy at term end.
  • Mid-Term Changes: Try to bake in flexibility, like the ability to drop a product from the PLA if not used (with some notice and perhaps a modest fee adjustment). Also, clarify if you can acquire new Broadcom products under the same PLA terms (often yes, but at what cost?).
• Prepare Alternatives and Proof of Concept: Although the mainframe market is limited, there are alternatives to some CA tools – and Broadcom is aware of them. For example, BMC Software offers competing products (BMC Control-M vs. CA 7, BMC MainView vs. CA Sysview, etc.), and IBM itself provides native tools (IBM’s RACF security vs. CA Top Secret, IBM Workload Scheduler vs. CA 7, etc.). If Broadcom’s proposal is outrageous, getting quotes from BMC or IBM for equivalent functionality can be a useful pressure tactic. Even if you don’t fully switch, demonstrating that you could migrate some workloads or that you have a pilot running with a competitor can give you negotiating leverage. Broadcom may then moderate its demands to keep your business. Additionally, investigate if open-source or in-house solutions could handle any part of the workload. For instance, some sites have replaced CA Endevor with Git-based solutions or migrated scheduling off the mainframe. These moves are non-trivial, but simply having an alternative strategy documented strengthens your hand. You do not want to appear completely dependent and unprepared. Show Broadcom that you have a plan B (even if it’s a long-term plan) – it will make them think twice about a pure take-it-or-leave-it stance.
• Engage Higher-Ups and Use Timing: Broadcom negotiations can sometimes be influenced by end-of-quarter or end-of-year pressures. Figure out Broadcom’s fiscal calendar and try to time your negotiation when they are eager to close deals (often just before Broadcom’s quarter ends, which typically occurs around January, April, July, or October). Also, don’t be afraid to escalate within Broadcom’s ranks if your sales rep isn’t budging. Involving a CIO in a conversation with a Broadcom executive or leveraging your account’s strategic value may unlock better terms. Conversely, be mindful of your own timing – never let a contract lapse into the final few weeks without resolution. Broadcom’s leverage skyrockets if you’re up against the wall. Always initiate renewal talks early (6-12 months before major contracts), allowing sufficient time to push back, explore alternatives, or implement them if necessary. As a safety net, negotiate in advance the right to extend the current agreement for a short period (say 3-6 months) while negotiating, so Broadcom can’t run out the clock on you.

By applying these strategies, you can significantly improve the outcome of your Broadcom deal. It often comes down to shifting risk from you to the vendor.

The more you can contractually ensure stable or adjustable pricing, the less Broadcom can surprise you with cost spikes or unfavorable terms.

Audit & Compliance Safeguards

Broadcom, like many software vendors, reserves the right to audit your usage of their software. In the mainframe context, audits typically mean Broadcom verifying that your actual MSU/MIPS usage for each CA product does not exceed what you’ve licensed. Audits can be disruptive and potentially expensive if they reveal non-compliance.

Here’s how to protect your organization on the audit front:

• Limit Audit Frequency and Scope: Negotiate terms in your contract about audits. Ideally, include a clause such as “Vendor may audit license compliance no more than once every 24 months, with at least 90 days written notice.” This prevents Broadcom from incessantly auditing you (which some might do as a pressure tactic). Also specify that any audit should be narrowly focused on relevant products and data, and conducted in a way that doesn’t unduly interfere with your operations. By setting these boundaries, you avoid the scenario of back-to-back audits or overly broad, unfocused investigations into your IT environment.
• Advance Notice and Process: As noted, require written notice 60-90 days before an audit, and define the process. For example, you can stipulate that you will run certain approved measurement tools (perhaps Broadcom’s own utility or IBM’s SCRT report) and provide the output, rather than letting Broadcom install anything they want on your systems. Define that audits must happen during normal business hours and that both parties will cooperate in good faith to resolve any findings. Having these details in writing will make an audit less chaotic and more fair. It also gives you time to self-check (and self-correct) before Broadcom comes in.
• Confidentiality and Results Handling: Include confidentiality language to ensure that audit results cannot be used publicly or shared with personnel beyond those who need to know. You don’t want, say, Broadcom’s sales team using an audit finding to upsell other departments or, worse, any leak of non-compliance to regulators or partners. Additionally, please clarify that any overage findings will be addressed through the purchase of an appropriate license at your discounted rates (not a punitive list price). In other words, if an audit shows you were using 10% more MSUs than licensed, the remedy should be simply to buy the additional licenses at the price you’d normally pay, in the future, rather than back-charging penalties. Try to get language like “If any usage shortfall is discovered, Customer shall have the opportunity to purchase additional licenses at contracted rates to become compliant”. Removing hints of “fees” or “penalties” can save you a lot of money.
• Internal Compliance Monitoring: Don’t wait for Broadcom to audit you – regularly audit yourself. Use software asset management (SAM) tools or IBM usage reports to track your CA product utilization versus what you have licensed. Maintain an internal spreadsheet or dashboard of your MSU consumption for each product. Suppose you notice certain tools approaching their licensed limit. In that case, you can proactively address it (by either curbing usage, optimizing performance, or reaching out to Broadcom to discuss additional licenses before they find out). This internal diligence can also uncover if you’re over-licensed, which is an opportunity to drop unused capacity at renewal (hence saving money). Demonstrating to Broadcom that you have a good handle on your usage might also deter them from aggressive audit tactics, as they realize you’ll catch any discrepancies yourself.
• Audit Clause Negotiation Tip: Many vendors have boilerplate audit clauses that are very one-sided (e.g., “vendor can audit anytime, customer pays for it, and huge penalties if non-compliant”). Always read that section of the contract carefully. You can negotiate it like any other term. For example, ensure Broadcom covers the audit cost unless a major shortfall (say, more than 5% unlicensed use) is found – this prevents them from conducting fishing audits on your dime. Also set a reasonable time frame for addressing any findings (no immediate 10-day cure ultimatum; instea,d something like 60 days to resolve issues). The audit clause may not be top-of-mind during negotiations compared to pricing, but if left unchecked, it can become a significant financial risk later.

In summary, mitigate audit risk by establishing clear ground rules in the contract and maintaining ongoing compliance oversight.

Broadcom audits are not to be taken lightly, as any non-compliance could justify them charging you a lot more. But with the right safeguards, you can make audits a formality rather than a firefight.

Support & Maintenance Protection

When you’re paying Broadcom hefty sums for mainframe software, you’re also paying for ongoing support and updates (typically 20%+ of license cost annually goes to maintenance fees). It’s crucial to ensure you’re getting value from that spend and to negotiate guarantees around support quality.

Here’s how to protect your organization on the support front:

• Define Service Levels (SLAs): Don’t assume that just because you have a support contract, you’ll get timely help. In your agreement, specify service level agreements for support responses and resolutions. For example: “Critical severity issues must receive an initial response within 1 hour and a workaround or fix within 24 hours.” Define tiers of severity (Critical, High, Medium, Low) and establish corresponding timelines for each. Broadcom might not commit to very stringent SLAs without extra cost, but at least get some baseline in writing. This holds them accountable if, say, a production scheduling system (CA 7) is down – you have grounds to escalate if the response is slow. Also request items such as access to patches, bug fixes, and new version upgrades as part of maintenance (these are normally included, but it’s best to spell it out to avoid any doubt).
• Dedicated Support Resources for Large Accounts: If your organization is a large one with multi-million dollar spend on Broadcom/CA products, you can negotiate for enhanced support. This could mean a named Technical Account Manager (TAM) assigned to your company, or dedicated support engineers who are familiar with your environment. At the very least, get clear escalation paths: “If an issue is not resolved within X hours, it will be escalated to Broadcom Level-2 support and then to the product development team as needed.” Ensure you have contact information beyond the generic help desk — such as a manager or executive at Broadcom — that you can call if support is not meeting your needs. When negotiating, emphasize the critical role these tools play in your operations and the need for assurance of expert support. Broadcom may bundle premium support offerings (sometimes at an extra cost), but you can often receive some added attention if your deal is substantial.
• Lock in Maintenance Terms: Maintenance fees can sneak up on you. As mentioned earlier, cap any annual maintenance fee increases. Also, tie maintenance to license discounts. For example, suppose you negotiated a 30% discount on license fees. In that case, your maintenance should be calculated based on the discounted price, not the full list price (some vendors attempt to charge maintenance on the list price even if you purchased the license at a discount — clarify this!). Additionally, if you reduce licenses (true-down), ensure maintenance reductions follow proportionally. It should be explicitly stated that if the license quantity or capacity is reduced, the maintenance charges will be reduced equivalently at the same time.
• Include Support Guarantees: While you might not get Broadcom to put major penalties around support, you can include a clause to protect yourself, such as: “If Broadcom fails to meet the agreed support service levels for two or more consecutive quarters, the customer may terminate the support contract for cause and receive a prorated refund.” This type of term provides an escape hatch if Broadcom’s support dramatically falls short. Even if you never use it, simply having it might motivate them to prioritize your support tickets more effectively. Similarly, consider asking for routine health checks or training credits as part of the deal, especially if you’re paying top dollar. For instance, you could negotiate that Broadcom will provide an annual on-site system assessment or training session for your staff on the latest features. These extras ensure you’re getting more than just break-fix support – you’re getting value-added service that can prevent issues.
• Monitor Vendor Performance: Hold Broadcom accountable by tracking their support performance. Keep a log of support tickets, response times, and resolutions. If you notice patterns of poor service, bring it up in quarterly business reviews or renewal discussions. Showing data like “80% of our critical tickets in the last year missed the SLA” can give you leverage to either demand improvement or negotiate some compensation (e.g., a credit or discount on renewal for the inconvenience). Broadcom prides itself on reliability in the mainframe space, so press them on living up to that standard.

In essence, don’t overlook the maintenance part of your contract – it’s typically a significant recurring cost year after year.

By demanding clarity on support levels and locking in fair maintenance terms, you avoid scenarios where you pay a fortune and receive subpar service in return.

Mainframes run the heart of your enterprise, so support for mainframe software is not trivial – treat it as a critical component of the deal.

Case Example – Cost Optimization via PLA

Consider this anonymized real-world scenario: A global financial institution was facing steep renewal increases across four CA mainframe products: CA 7 (workload automation), CA Endevor (mainframe DevOps), CA Top Secret (security), and CA Database Management solutions for DB2.

Each product’s renewal quote from Broadcom came in with about a 15% uptick and pressure to sign multi-year deals.

Rather than renewing each piecemeal and swallowing the hikes, the customer took a strategic approach:

• Consolidation into a Portfolio Agreement: They negotiated a 3-year Portfolio License Agreement covering all four products. By combining them, the total contract value was sizable, which gave the enterprise more clout to demand concessions. Broadcom, in turn, offered a single flat annual fee for all usage of those tools, which initially looked high but was actually more reasonable when broken down per MSU.
• Using Usage Data to Right-Size: The bank had invested in tracking its mainframe usage and discovered its actual MSU consumption for some tools had dropped by ~10% due to optimization efforts. They presented this data to Broadcom to challenge the renewal numbers. The result: Broadcom agreed to base the PLA pricing on the current lower usage level, rather than the previous (higher) licensed level, thereby immediately avoiding payment for phantom capacity.
• Negotiated Discounts and Caps: Because of the multi-product, multi-year nature of the PLA, the customer secured an overall 15% cost reduction compared to what separate renewals would have cost. They also achieved a price cap of a 3% annual increase, locked in, and a clause allowing the dropping of one of the products if it wasn’t used after two years. This flexibility was key in alleviating the risk of shelfware.
• Outcome: Over the 3-year term, the bank saved an estimated $2 million (15% off the projected spend) and simplified compliance management by consolidating its capacity pool. The PLA gave them headroom to grow one product’s usage while reducing another’s, all under the same fee. Importantly, they avoided the scenario of each Broadcom renewal piling on more cost unpredictably.

Takeaway: Even in a challenging negotiation environment, smart bundling and data-driven discussions can shift the balance in your favor.

By demonstrating preparedness (through usage data) and willingness to negotiate a larger, longer-term deal (the PLA) on their own terms, this customer turned a potential 15% increase into a 15% decrease.

It underscores the value of the strategies discussed: bundling for leverage, proving your actual needs, and insisting on contractual flexibility.

Checklist – Must-Have Clauses in Broadcom Mainframe Contracts

When finalizing any contract or renewal with Broadcom for CA mainframe software, make sure the following clauses (in plain language) are included.

These are protective terms that ensure fairness and cost control throughout the life of the agreement:

• Cap on Price Uplifts: Include a clear cap to limit how much Broadcom can raise prices each year. For example: “Annual license and maintenance fees shall not increase by more than 3% year-over-year.” This prevents surprise hikes and gives you budget predictability.
• True-Down Rights: Ensure there’s a provision to adjust fees downward if your usage decreases. For example: “License commitments and fees may be reduced on an annual basis in proportion to any verified reduction in mainframe MSU utilization.” In essence, you pay for what you use, not perpetually for what you used to use.
• Audit Limitations: Protect Yourself from Invasive or Frequent Audits. A good clause could be: “Broadcom may audit compliance at most once every two years with 90 days’ notice, and audit activities shall minimize disruption. Any license shortfall can be remedied by purchasing additional licenses at contracted rates, with no penalties.” This clause caps audit frequency and removes the fear of punitive back-charges.
• PLA Flexibility (if on a Portfolio Agreement): If you opt for the PLA route, incorporate flexibility. For instance: “Customer may reallocate licensed capacity among the CA products covered in the portfolio, as needed, and may remove a product from the portfolio if not in use after 12 months, with an appropriate fee adjustment.” Also, specify how renewal of the portfolio will work, or your right to partial renewals, so you’re not locked into an all-or-nothing decision later.
• Support Service Level Guarantee: Don’t forget to solidify support expectations. For example: “Broadcom will provide technical support 24×7 with a 1-hour response for critical issues. If Broadcom fails to meet the defined service levels in two consecutive quarters, Customer may terminate the support contract and receive a prorated refund.” This type of clause holds Broadcom accountable for the quality of its support and provides you with recourse if it fails to meet expectations.

Each of these clauses addresses a specific risk: uncontrolled price increases, paying for unused capacity, audit ambushes, inflexible bundles, and poor support.

During negotiations, you may not get everything worded exactly as you initially proposed, but fight for these principles. Even a slightly weaker form of each is better than nothing (e.g., maybe you settle for a 5% cap instead of 3% – still far better than uncapped).

The key is not to sign a Broadcom contract on their paper as-is. Use this checklist to review the drafts and ensure the final agreement includes the necessary safeguards.

Related articles

• Understanding MIPS/MSU-Based Licensing in Broadcom CA Mainframe Deals
• Broadcom Mainframe Portfolio License Agreements (PLA) Explained – Pros, Cons & Negotiation Tips
• Broadcom Mainframe True-Down Rights – How to Reduce License Costs When Usage Declines
• Broadcom Mainframe Renewal & Audit Tips – How to Protect Costs and Defend Compliance

FAQs

Q: How is CA mainframe software typically licensed under Broadcom?
A: Broadcom primarily uses capacity-based licensing for CA mainframe products. This means you’re charged according to your IBM Z machine’s capacity (measured in MIPS or MSUs) or the peak usage of the software. In practice, you purchase a certain number of MSUs for each product, allowing you to run that tool on your mainframe up to that capacity. Some products may have flat fees or user-based components, but by and large, the pricing is tied to mainframe capacity. Broadcom also offers Portfolio License Agreements (covering multiple products under one capacity limit) and a newer consumption-based model (Mainframe Consumption Licensing) for those who prefer pay-as-you-use flexibility. However, most customers today are on the traditional model where your license cost scales with the size and power of your mainframe environment.

Q: What price increases are typical at renewal with Broadcom?
A: Many organizations report that Broadcom’s initial renewal quotes come with hefty increases – often in the 10% to 20% (or more) range compared to the previous term. If you had especially favorable pricing in the past, the jump might be even larger as Broadcom attempts to align you to their standard rate. That said, if you negotiate, you can sometimes trim this down. Broadcom might agree to smaller annual increases (like 3-5% per year) in a multi-year deal, rather than a huge one-time jump. Without any negotiated cap, it’s safest to budget for high single-digit or low double-digit percentage increases annually. Always scrutinize the renewal proposal: sometimes they include an uplift on the base price and an annual escalator – make sure you identify both and push back. The “typical” increase is whatever you tolerate; with preparation, you can aim to make it as close to 0% as possible. However, broadly speaking, unprepared customers could see cost growth of 15% or more at renewal if they simply accept Broadcom’s terms.

Q: Can I reduce my license fees if my mainframe MSU usage drops?
A: Not automatically – Broadcom’s standard contracts don’t give money back if your usage declines. If you do nothing, you’ll keep paying the same fee even if, say, you decommission an application and free up 20% of the mainframe. However, you can negotiate the right to reduce fees (true-down) at defined intervals. This should be included in the contract. For example, you might secure a clause that yearly fees will be adjusted downward if verified MSU consumption is lower. Alternatively, you could switch to Broadcom’s consumption-based licensing model, where, in theory, you pay only for what you use each period – but that’s a different type of contract requiring commitment to that program. In summary, to benefit from reduced usage, you must plan it in your negotiation. If your mainframe footprint is likely to shrink (due to workload offloading, optimization, or business change), make sure to include terms that let you right-size your licenses accordingly. Otherwise, Broadcom will happily keep charging as if you’re at peak capacity.

Q: What is a Portfolio License Agreement (PLA) in the context of Broadcom/CA software?
A: A Portfolio License Agreement is essentially an enterprise agreement covering multiple Broadcom (CA Technologies) products under one overarching license. Instead of buying each software tool separately, a PLA allows you to pay a single, consolidated fee (often annually) for a bundle of products. Typically, a PLA will specify which products are included and the total capacity (MSUs) you can use across those products. For example, a PLA might allow up to 10,000 MSUs of combined usage for any of the CA tools you’ve included, for a flat $X million per year. The idea is to simplify management – one contract, one renewal date – and potentially provide cost savings through bulk pricing. It can also offer flexibility: you might be able to deploy an additional CA product without a separate purchase as long as you’re within your PLA capacity. However, the downside is inflexibility if poorly negotiated; you’re effectively tied into a big bundle, so if you stop using one product, you might not save anything unless the PLA allows adjustments. Additionally, PLAs typically run for multiple years and involve a significant commitment. In summary, a PLA is like a buffet pass to Broadcom’s software portfolio – great if you truly need many items on the menu and can negotiate a good rate. Still, you should ensure it’s structured to allow flexibility and not just lock you into a high spend.

5 Actionable Negotiation Tips

To conclude, here are five actionable tips you can take to the negotiation table to improve your Broadcom mainframe software deals:

1. Never Accept Uncapped Uplifts: Refuse to sign any contract that allows for unlimited price increases. Insist on a clear cap (preferably low single digits) on annual fee increases to avoid nasty budget surprises.
2. Benchmark Costs Annually: Stay informed about what others are paying. Regularly benchmark your per-MIPS or per-MSU costs for Broadcom products against industry data. Use this to highlight pricing that’s out of line and to establish realistic targets in negotiations.
3. Bundle Contracts for Leverage: Where possible, align and co-term multiple Broadcom product renewals to negotiate them together. A larger combined contract value puts you in a stronger position to demand discounts or concessions that wouldn’t be offered on smaller, separate deals.
4. Secure True-Down Provisions: Don’t get stuck paying for capacity you no longer use. Negotiate the ability to reduce licenses and costs if your mainframe usage declines (or if you divest a business unit, etc.). This ensures you only pay for actual needs over time, not historical peaks.
5. Protect Against Aggressive Audits: Proactively include audit limitations and maintain your own usage tracking. By setting rules on audit frequency and preparing your compliance data, you remove the fear factor. It also sends Broadcom a message that you’re a well-managed customer – less likely to be pushed around or caught off-guard.

By following these tips and the strategies outlined in this guide, you’ll be far better equipped to navigate Broadcom mainframe (CA Technologies) licensing. The key is preparation, information, and assertiveness.

Broadcom may come to the table with a strong hand. Still, with the right approach, you can turn a potentially one-sided negotiation into a balanced partnership that meets your enterprise’s needs without breaking the budget. Good luck!

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