Broadcom Pricing & Discount Models: Benchmarks, Multi-Year Deals, and Cost Increases

Broadcom Pricing & Discount Models

Introduction – Understanding Broadcom’s Pricing Approach

Broadcom has a reputation for aggressive, high-margin pricing following its acquisition of a software company. The company’s post-acquisition philosophy is to simplify and standardize offerings, then monetize them heavily.

This often translates to higher list prices and fewer discretionary discounts for customers. Broadcom essentially “resets” the pricing of acquired vendors (e.g., VMware, CA, Symantec) to align with its own model.

This reset can be a shock for longtime customers, so having intel on Broadcom’s pricing tactics is crucial before entering negotiations.

In short, buyers need to come prepared with data and strategy – Broadcom’s default pricing will favor its bottom line unless you push back.

List Prices vs. Street Prices

Broadcom’s list prices are notoriously high, often set to maximize profit margins. However, like most enterprise software, the “street price” – the real price paid after negotiation – is lower.

The catch is that Broadcom’s discounts tend to be far smaller than those of its peers. Where a vendor like IBM or Microsoft might offer 40–50% off for a big deal, Broadcom might only concede on the order of 10–30%.

This creates a narrower gap between list and negotiated price, meaning customers feel more “sticker shock” and may end up paying closer to list price than expected.

Broadcom also limits promotional discounts. It doesn’t frequently run sales or special deals – the list price is set high and only serious negotiations budge the needle. Importantly, renewal prices are often higher than initial purchase prices.

Broadcom may give a decent discount on an initial deal to win your business, but at renewal time, those discounts tend to shrink (or vanish). That means your Year 2 or Year 3 costs could jump even if your usage stays the same.

List vs. Street Pricing Snapshot:

Below is an example illustrating Broadcom list prices versus achievable street prices after negotiation, as well as differences between new deals and renewals:

Key takeaways:

Enterprise customers can typically negotiate a discount of around 20% (potentially up to 30% for extremely large commitments). Smaller customers may only see discounts of 0–15% off Broadcom’s list price.

Renewals are tougher – maintenance fees (around 22% of license cost annually) are usually fixed with no discount, and subscription renewals often don’t get the same concessions you got initially.

This means the “real” price you pay in later years may creep closer to Broadcom’s high list price, especially if you don’t renegotiate aggressively.

Pricing Benchmarks

What kind of discount can enterprises actually achieve with Broadcom? Generally, benchmark ranges fall in the 10%–30% off list price for software licenses, depending on deal size and leverage:

• Small/Medium Business Deals: Often 10% or less discount. Broadcom isn’t very flexible with smaller accounts – some SMB customers report being offered negligible discounts (or even full list price).
• Large Enterprise Deals: Typically 20–30% off the list price for major deals or enterprise license agreements. Very few customers achieve discounts beyond ~30%; Broadcom’s model is to maintain high margins.
• First-Term vs Renewal: Initial purchase discounts might be, say, 20%, but renewal discounts may drop to 10% or even 0%. Broadcom knows you’re invested in their tech by renewal, so they often tighten the pricing. Many renewal quotes come in with higher effective prices than the original deal.

These benchmarks are derived from industry intelligence, including peer companies sharing information, RFP processes, and third-party advisors who track deals. Knowing these numbers helps set realistic targets.

For example, if your peers only got 15% off, aiming for 50% off Broadcom’s list isn’t realistic. Conversely, if you’re a large customer, you should push toward the upper end of the typical range (and not settle for a token 10%).

Use these benchmarks to anchor your negotiation, justify your asks (“our target discount is X% based on what similar enterprises achieve”), and detect when Broadcom’s offer is sub-par.

Multi-Year Pricing Structures

Broadcom strongly encourages multi-year deals and subscriptions – it loves the predictability of locked-in revenue.

But buyers must examine how multi-year pricing is structured:

• Annual vs Upfront Billing: Broadcom may allow annual billing for multi-year commitments, but it sometimes incentivizes upfront payment. For instance, they might offer a small additional discount if you pay the entire amount for 2–3 years upfront. This benefits Broadcom’s cash flow and guarantees your commitment.
• Built-in Uplifts (Escalators): A common tactic employed by Broadcom is to include year-over-year price increases even within multi-year contracts. You might sign a 3-year deal, but see the price increase by 5% each year automatically. These escalators (often in the 3%–7% per year range) mean Year 3 costs more than Year 1 despite the commitment. Broadcom builds this into its strategy to ensure its revenue rises over the term.
• “Flat” Multi-Year Pricing: In some cases, you can negotiate a flat rate for a multi-year term (no increases). Broadcom won’t volunteer this – you have to push for it. Vendors sometimes justify increases due to “inflation” or “cost of support,” but savvy customers insist on a fixed price for the term of the agreement.
• Upfront Term Discounts: Broadcom may dangle a slightly lower price if you commit to a longer term. For example, a 3-year contract might have a lower per-year rate than a 1-year contract, as a reward for your longer commitment. However, these savings can be undermined if there are steep escalators in years 2 and 3. Always calculate the total cost of ownership over the full term. Sometimes a “discounted” multi-year deal still ends up costing more by the last year due to built-in hikes.
• Flexibility and True-Ups/Downs: Multi-year agreements often lock in a certain quantity of licenses or usage. Broadcom will happily let you true-up (add more licenses) if you grow, but they may not allow you to reduce licenses if your needs shrink. This can lead to overpaying for shelfware in a long contract. It’s wise to negotiate provisions for true-downs or mid-term adjustments if possible, especially for large, evolving deployments.

In summary, multi-year deals can provide cost predictability, but be sure to read the fine print. Don’t assume a “3-year contract” means 3 years of stable costs – it could be 3 years of rising costs unless you negotiate otherwise.

Aim for flat or minimally increasing prices across the term, and get clarity on payment schedules and any incentives for prepayment.

Step Pricing Explained

“Step pricing” refers to structured price changes built into a deal. Broadcom uses step pricing in a couple of ways:

• Volume-Based Discounts: This is the classic approach, where the unit price drops once a certain quantity threshold is reached. For example, if you license 1000 users instead of 500, maybe the per-user cost “steps down” to a lower tier. Broadcom does offer volume discounts, but the thresholds are often high, and the incremental savings are modest. Still, if you foresee growth, negotiating tiered pricing upfront can prevent paying full price for additional units later.
• Term-Based Price Step-Ups: Broadcom often incorporates automatic price increases at set intervals, even under a single contract. For instance, a 3-year subscription might be priced at $100 per unit in year 1, $107 in year 2, and $114 in year 3 (a 7% step-up each year). These are essentially annual escalators described earlier. Broadcom uses this tactic to boost revenue predictability – they can forecast growth in your account without relying solely on new sales. From their perspective, it secures a growing revenue stream. From the customer perspective, it’s a predictable but steadily rising expense line.
• Rationale: Broadcom positions step pricing as aligning with value or inflation. They might argue that as you consume more, you get a better rate (volume discount), or that multi-year commitments warrant planning for cost increases (term step-ups). In reality, these structures primarily protect Broadcom’s revenue and margins. They ensure Broadcom isn’t “stuck” with a flat price for years, and they pressure customers to either accept the increase or renegotiate.
• Managing Step Pricing: When negotiating, scrutinize any pricing schedules. If you see a clause stating that prices increase each year, consider it negotiable. You can often negotiate to remove or reduce these step-ups. For volume discounts, aim to establish thresholds that align with your growth plans, and consider pre-negotiating pricing for additional volume to avoid paying a premium later. Essentially, aim for simplicity: the best case is a flat price per unit throughout the term and straightforward volume tiers, without surprises.

In Broadcom deals, step pricing is a lever to maximize revenue. Your goal as a customer is to minimize those built-in increases, keeping your costs as flat as possible while still getting the term or volume commitment benefits you need.

Post-Acquisition Cost Increases (VMware Example)

Broadcom’s playbook when it acquires a company includes driving revenue growth from the acquired products.

VMware’s case (acquired in late 2023) is a prime example of how costs can rise post-acquisition:

• Elimination of Loyalty Programs & Discounts: VMware historically offered various customer-friendly programs, such as discounts for loyal, long-term customers and incentive programs for enterprises to stay current on support. Broadcom has been stripping away these legacy perks. Many VMware customers who had previously enjoyed special pricing or deals found that those were no longer honored after Broadcom took over. The pricing “reset” meant starting negotiations from scratch, often at higher price points.
• Higher Support Fees: VMware’s standard support (SnS) renewal was roughly 20% of the license cost annually. Under Broadcom, support fees have crept up – around 22% (or more) of the license price per year is now common. Broadcom also introduced premium support tiers at higher costs. Essentially, if you want the same level of support coverage, you’re paying more than before. Support is a significant hidden cost driver (nearly a quarter of your license investment every year), so even a few percentage points increase has a budget impact.
• Licensing Metric Changes: Broadcom is not shy about changing how products are licensed to capture more value. A notable shift for VMware is the transition from per-CPU licensing to per-core licensing in certain cases. VMware vSphere was historically licensed per CPU socket (with some core limits per socket), but Broadcom is now pushing models where every CPU core counts toward licensing. They also dramatically raised minimum license quantities – for example, requiring a minimum of 72 cores worth of licenses even if a customer’s server farm is much smaller. (Previously, one CPU or 16 cores might have been a minimum unit.) By raising the licensing granularity, Broadcom effectively forces customers to buy more licenses for the same hardware, driving up costs, especially for smaller deployments or edge cases.
• Bundle-Only Sales: Another post-acquisition change – certain standalone VMware products were discontinued or only sold as part of larger bundles. For instance, features that could be purchased à la carte (such as specific vRealize components or the free vSphere Hypervisor) are no longer available, and you must now purchase the larger VMware Cloud Foundation suite or other bundles to access that functionality. This “all or nothing” approach means paying for a lot more software, even if you only need one piece, which obviously increases the total spend.
• Real-World Cost Spikes: The net effect of Broadcom’s changes has been dramatic cost increases for many VMware customers. It’s not uncommon to hear of 30%–50% net cost increases when comparing a customer’s last VMware deal before Broadcom to their renewal quote after Broadcom. In fact, some cases are far more extreme – midsize customers have reported 300%–500% increases, and a few outliers (particularly in Europe) cited 800%+ jumps when forced into new licensing bundles. While those extreme cases often involve special circumstances (e.g., heavily discounted old contracts being replaced by full-priced bundles), they underscore Broadcom’s aggressive approach to pricing. For a typical large enterprise, you should expect a potential double-digit percentage increase in renewal costs and be prepared to negotiate it down.
• Example: Before Broadcom, a VMware customer might have paid $1 million for a mix of perpetual licenses plus 20% annual support (~$200k/yr). Now, that same customer’s quote might be $1.3–1.5 million for a three-year subscription bundle, which, when broken down, is a significant increase over the prior model’s equivalent three-year cost. Broadcom is betting that customers need VMware enough that they will absorb these hikes (or have limited alternatives in the short term).

The VMware scenario serves as a cautionary tale. The post-acquisition pattern for Broadcom is clear: simplify the portfolio, enforce subscription licensing, and significantly raise prices.

Customers of other Broadcom-acquired software (CA, Symantec, etc.) experienced similar fates – for example, Symantec enterprise software maintenance renewals jumped as Broadcom moved to subscription-only, with many clients seeing 2x–4x cost increases.

The bottom line is that any legacy price protections or goodwill discounts can disappear overnight once Broadcom takes control.

Enterprises must be prepared to confront a significantly higher price baseline and explore ways to mitigate the increases through negotiation or optimization.

Subscription vs. Perpetual Licensing

Broadcom strongly prefers subscription-based licensing over perpetual licenses. This is a strategic choice to drive recurring revenue and predictable cash flow.

Here’s how the two models compare, and what Broadcom’s stance means:

• Perpetual + Maintenance (Legacy Model): Traditionally, software like VMware was sold as a perpetual license (one-time fee) and an annual maintenance/support contract (usually ~20% of the license price each year). The advantage for customers is that once the license is bought, you can technically use the software indefinitely. If budgets got tight, you might even skip a year of support (though you’d lose updates and help). Over a long period (5+ years), perpetual licensing could be more cost-effective, especially if you didn’t upgrade frequently.
• Subscription (SaaS or Term License): Under a subscription, you pay for the right to use the software for a specific term (e.g., annually or over multiple years). Support and updates are typically included in the subscription fee. You don’t own the license; if you stop paying, you lose the right to use the software. For Broadcom, this is ideal because it guarantees revenue every year and often locks customers into ongoing renewal cycles. For customers, this means higher long-term costs if the software is used for many years – you continue to pay, and the costs never stop.
• Broadcom’s Push to Subscription: Following its acquisitions, Broadcom has been phasing out new perpetual license sales. VMware ceased selling perpetual licenses for most products as of early 2024, compelling customers to adopt subscriptions. Symantec’s software similarly transitioned to a subscription-only model under Broadcom. The company even ended support for some perpetual licenses or made it very difficult to stay on them (e.g., not providing feature updates or making contract terms unfavorable). Broadcom’s goal is clearly to convert the customer base to subscriptions where revenue is higher and more predictable.
• Cost Implications: In a subscription model, the headline price might look reasonable (e.g., “$350 per core per year” instead of “$700 perpetual per core plus $140/yr support”). However, if you project out 5 years, a subscription often ends up costing more than perpetual and maintenance would have. Subscription bundles also often include extras (like additional features or cloud services), which you pay for regardless of usage. Broadcom bundles upgrades and support into the subscription, which is convenient; however, there’s no option to opt out of support to save costs, etc. Essentially, you’re all-in and paying top dollar continuously.
• Value Considerations: With a subscription, you receive the latest versions and typically better support built in. If your organization values always being up-to-date, this model delivers that. Additionally, from a budgeting perspective, some companies prefer to spread costs annually (OpEx) rather than making a large upfront payment (CapEx). Broadcom capitalizes on these selling points. However, procurement teams should run a 3- to 5-year cost comparison: how does the TCO of going subscription compare to if you had bought perpetual and paid support? In many cases, the subscription comes out significantly higher over the same period. This might be acceptable if the additional cost comes with needed new capabilities or if there’s simply no perpetual option anymore – but you should know the price of that shift.
• Negotiation Angle: If you’re an existing customer with perpetual licenses, you have some leverage. Broadcom might try to persuade (or coerce) you into a subscription. You can calculate the cost of sticking with your perpetual (plus support) costs versus migrating. Use that as a baseline to negotiate the subscription price. Maybe you agree to transition to subscription, but only if the multi-year subscription cost is, say, no more than 120% of what you would’ve paid under perpetual/maintenance over the same period. Have Broadcom justify the difference in value.

In summary, Broadcom loves subscriptions because they make you a consistent revenue stream.

Customers need to be aware that this often means paying more in the long run. Evaluate the benefits (continuous updates, simpler licensing, cloud tie-ins) versus the increased cost.

If you do opt for a subscription, negotiate hard on the pricing and terms, as you’re committing to the Broadcom way of doing things for the foreseeable future.

Hidden Cost Drivers

Beyond the headline license fees, Broadcom’s agreements can contain hidden cost drivers – elements that quietly inflate your total spend. Being aware of these can help you avoid nasty surprises.

Here are some key hidden costs to watch for and how to address them:

• High Support & Maintenance Fees: Broadcom’s support is pricey – typically around 22% of the license cost per year for software maintenance. This means over 5 years, you effectively pay the license cost again just in support. Why it matters: It’s a large ongoing cost that can make a “discounted” license much less of a bargain over time. How to mitigate: Negotiate the support percentage if possible, or ensure you’re getting value (e.g., premium support SLAs) for that rate. At minimum, budget for this — it’s often non-negotiable, but you might negotiate caps on support fee increases in future years.
• Currency/FX Exposure: Broadcom often quotes deals in USD (even for international customers) or in local currency without hedging against exchange rate fluctuations. Why it matters: If your currency weakens against the USD, your effective cost could rise year over year, even without any action by Broadcom. We’ve seen global companies get burned by a 10%+ cost uptick due to currency changes on multi-year deals. How to mitigate: Where possible, negotiate pricing in your local currency or insert clauses to revisit price if exchange rates move beyond a certain band. Another strategy is to pre-pay future years’ fees (if feasible) to lock in costs, or at least be aware of this risk in your budget forecasts.
• Mandatory Bundles & Cross-Sells: Broadcom might insist you purchase a bundle of products or an entire suite, even if you only need one component. They also tend to bundle in add-on features or cross-sell other Broadcom software as part of “solution” packages. Why it matters: You end up paying for software that you don’t fully use, inflating your cost. For example, instead of buying just one monitoring tool, you must buy the whole cloud management suite. How to mitigate: Push back on bundles – ask for modular options or carve-outs for things you truly don’t need. If they won’t unbundle, quantify the unused components and use that to negotiate a lower price (“We won’t be using X and Y modules, so we need a price adjustment or credit”). Ensure any bundles align with your actual usage to avoid shelfware.
• Reinstatement and Late Renewal Fees: Broadcom imposes steep penalties if you let a support or subscription lapse and then want to reinstate it. Even being late on a renewal can trigger fees. For instance, if you renew a subscription after its expiration date, Broadcom may charge a penalty (~20% of the first year’s fee) as a late charge. If you have a perpetual license and skip support for a year, to reinstate, Broadcom might require back-paying the missed period plus a surcharge. Why it matters: These fees can be significant – effectively a tax on any lapse in coverage, which can catch budgeting teams off guard. How to mitigate: Never let your support/subscription lapse if you can help it. Mark renewal dates well in advance and engage early. You can also try to negotiate a grace period in your contract (even 30 days buffer to sort out POs could save 20% fees). If you anticipate needing to pause usage, discuss options with Broadcom proactively (although they rarely budge on this; their goal is to keep you constantly renewed).
• Automatic Annual Escalators: As mentioned earlier, many Broadcom deals build in an automatic price increase each year (3–7%). This is often buried in the terms or order form. Why it matters: Over a multi-year term, these escalators compound, meaning you pay more in later years for the same entitlements. It can significantly increase the total contract value compared to a flat price. How to mitigate: Identify these clauses and negotiate them to be either removed or reduced. For example, push for 0% increase (flat pricing) or at worst a cap like 2% tied to the inflation index. If Broadcom insists on an escalator, ensure it’s clearly documented so you can budget, but it’s better to fight it at contract time than swallow it later.

Table: Hidden Costs to Watch For

Being vigilant about these hidden drivers is essential for effective smart contract management. Broadcom’s contracts are drafted to protect their revenue – it’s on you to identify these cost levers and address them before signing.

Every one of the above can at least be discussed in negotiation. You may not get everything you ask for, but even mitigating one or two issues can save a significant amount of money over the life of the agreement.

Negotiation Implications

Understanding Broadcom’s pricing patterns and benchmarks arms you with leverage. Here are key implications for negotiating with Broadcom:

• Set Realistic (But Firm) Discount Targets: Use industry benchmarks to set your goal discount. If you know 20% off is typical for your size, start higher, but be realistic. Broadcom sales reps know that you likely have heard the ranges – signaling that you’re informed can prevent them from lowballing you. Anchor the negotiation by stating your expected discount or price based on what the market pays.
• Push for Flat Multi-Year Pricing: If you’re committing to a multi-year deal, insist on price stability over the term. Do not accept boilerplate terms that include 5% automatic increases each year. Negotiate those out for a truly flat-rate deal. If Broadcom argues, position it as essential for your budget approval – many procurement teams have policies against contracts with built-in escalations. Remember, a multi-year commitment is already your concession; you should get price protection in return.
• Don’t Treat Renewals as Automatic: Broadcom might assume that once you’re a customer, the hard negotiation is done. Prove them wrong. Negotiate renewals as vigorously as new deals. In fact, you have more leverage than you think at renewal time if you’ve prepared alternatives. Push for a “loyalty” discount or at least maintain your initial discount level. If Broadcom comes in with a smaller discount (effectively raising your price), call it out and press for parity with the prior deal. Threaten to reassess usage or move workloads if the renewal isn’t reasonable. They need to feel you might walk, otherwise they will present a take-it-or-leave-it renewal.
• Leverage Competition and Alternatives: One of the few things that can move Broadcom off a hardline price is the credible threat of losing the customer. Even though Broadcom targets the top 20% of customers who are often deeply invested, you should always investigate alternatives (be it alternative vendors or delaying projects). If you can present a business case that switching is on the table, you’re more likely to see concessions. For example, some VMware customers evaluated alternate hypervisors or cloud migrations, and in some cases, Broadcom responded by reducing a proposed price hike to keep them. Ensure Broadcom understands that you have options (even if they’re unfavorable – the point is that you won’t simply accept any price).
• Use Contract Clauses to Your Advantage: Nail down specifics in the contract, such as a ceiling on support fee increases, explicit discount percentages for renewals, and flexibility to drop unused licenses, among others. Broadcom contracts are typically in their favor by default, but everything is negotiable if you ask. For instance, if you agree to a subscription, you might add a clause that renewal pricing will be at no more than X% increase versus the initial term. Or if currency is a worry, a clause to revisit pricing if exchange rates swing dramatically. The contract is where you lock in all the hard-won concessions – don’t rely on verbal assurances.
• Time Your Negotiations: Broadcom, like many vendors, has sales targets and quarter and year-end pressures. However, given their smaller discount approach, they’re not as generous with end-of-quarter blowout deals as some companies. Still, you may find a bit more flexibility in Q4 or Q1 (Broadcom’s fiscal year timing could affect this). Also, engage early – Broadcom often delivers renewal quotes late (some customers complain of receiving a renewal quote just weeks before expiration, leaving them little time to act). Don’t let that happen; start the dialog early so you’re not trapped by time. Early engagement also signals that you’re serious and need a workable proposal, not a last-minute ultimatum.

Overall, knowledge is power in Broadcom negotiations. Knowing typical discount ranges, the tricks in multi-year deals, and the cost drivers to target allows you to negotiate from a position of strength.

Broadcom sales reps are prepared for tough talks – they expect you to push back. By coming with data and a clear ask on critical points, you can chip away at Broadcom’s default terms and win a more balanced deal.

FAQs on Broadcom Pricing

Q: What discount can I expect from Broadcom on a large deal?
A: For a large enterprise deal, expect roughly 10–30% off the list price after negotiations. Closer to 10% if Broadcom feels you have limited alternatives or a smaller spend, and up to ~30% if it’s a significant, competitive deal. Discounts above 30% are rare with Broadcom – they intentionally keep discounts modest compared to other vendors. Make sure to benchmark with peers, but a target of ~20% off the list is a reasonable middle ground for many large deals.

Q: How much have VMware prices gone up post-Broadcom?
A: Many VMware customers have seen substantial increases after Broadcom’s takeover. Increases of 30–50% in total cost (for equivalent environments) are common for enterprises. Some unlucky customers reported much higher spikes (2x, 5x, even 10x in extreme cases) due to the new bundle licensing and loss of previous discounts.

The exact impact varies: if you were on a heavily discounted or perpetual license plan, the jump to Broadcom’s subscription pricing is huge. Broadcom did, however, offer some temporary discounts (e.g., 30–50% off the new list prices) to soften the blow for those signing 3-year contracts. So, while the list prices skyrocketed, your negotiated result might be “only” 2x what you used to pay, instead of 5x.

Bottom line: Prepare for a notable price uptick and analyze what’s driving it (more licenses required, higher unit price, or a bundle that includes extra products?) so you can effectively target your negotiations.

Q: Does Broadcom reward multi-year commitments with better pricing?
A: Generally, yes, Broadcom will offer slightly better pricing for longer commitments, but the keyword is “slightly.” For example, a 3-year deal might come with a small discount compared to a 1-year deal, or Broadcom may be willing to lock in pricing for a multi-year term (whereas annual renewals could increase each year). They certainly push customers toward multi-year contracts because it secures revenue. However, the “reward” often comes with strings – such as a contract that may have built-in annual increases or require an upfront payment for the best rate. In practice, you should absolutely ask for an incentive for multi-year (even if they don’t volunteer one). Common requests include a higher discount percentage, a cap on price increases, or an extra year of support at no additional cost. Be cautious: don’t agree to a multi-year contract just for a small discount if it severely limits your flexibility. The multi-year contract should both give you a cost advantage and protect you from surprises; otherwise, a yearly negotiation might be better despite the hassle.

Related articles

• Broadcom Software Pricing Benchmarks – Typical Discounts Explained
• Broadcom Multi-Year Pricing Models – How Discounts and Step Pricing Work
• Broadcom Step Pricing and Volume Tiers – How They Work and How to Negotiate
• VMware Licensing Cost Increases Under Broadcom – What Enterprises Should Expect
• Broadcom Volume Discounts and Bundling – How to Maximize Savings Without Shelfware

Final Section – 5 Actionable Pricing & Discount Strategies

To conclude, here are five concrete strategies you can apply when navigating Broadcom software pricing and discounts:

1. Benchmark Before You Bargain: Gather market data on what discounts other companies are getting from Broadcom. Use these benchmarks to set your negotiation targets and counter any “high list price” quotes. Anchoring your asks in known ranges makes your case credible.
2. Demand Flat Pricing in Multi-Year Deals: If you commit to multiple years, insist that the price remains flat each year (or as close to flat as possible). Do not accept automatic step-ups or vague “subject to increase” clauses. A multi-year agreement should shield you from increases, not bake them in.
3. Scrutinize Support & Renewal Terms: Verify the cost of support (typically ~22% annually) and negotiate caps on those fees. Also, ensure your renewal terms are fair – push for renewal discounts or at least price protections so you’re not blindsided by a big jump later. For everything you negotiate for the initial term, try to carry it into renewal options in writing.
4. Evaluate Subscription vs Perpetual Costs: Do a 3-5 year cost comparison of staying on perpetual licenses (if you have that option) versus moving to Broadcom’s subscription. Sometimes, sticking with existing licenses a bit longer or exploring third-party support can save money. Conversely, if subscription is inevitable, use the analysis to negotiate the subscription price down (“Otherwise it’s X% more expensive than our current model, which we can’t justify.”).
5. Audit the Deal for Hidden Costs: Before signing, conduct a line-by-line review of the quote and contract to identify any hidden costs. Look for hidden cost drivers, such as support fees, currency issues, bundled items, penalty clauses, and escalators. Bring each to the table: ask to remove or mitigate them. It’s much easier to negotiate these upfront than to fight them later. For example, if there’s a 20% late renewal penalty clause, consider having it removed now. If the deal is quoted in USD but you operate in Europe, discuss currency options. This due diligence can prevent nasty surprises and ensure the “great deal” you negotiated doesn’t have strings attached.

By applying these strategies, you’ll approach Broadcom negotiations with a proactive, informed stance.

Broadcom’s pricing model may be rigid, but with preparation and persistence, you can secure a more favorable outcome that protects your organization’s budget while obtaining the software value you need. Good luck, and stay strategic during the process!

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