Managing Price Uplifts in Broadcom Renewals
Why Renewal Uplifts Are Dangerous
Broadcom often uses the renewal process as a profit lever, imposing double-digit price hikes on maintenance and subscription fees.
A typical Broadcom renewal price increase is 10–20% or more over the prior year’s fees. Broadcom’s maintenance uplifts on support contracts often fall in this same range – double-digit increases year over year.
Broadcom’s approach is one-sided: if your contract doesn’t limit price increases, they will impose aggressive jumps. Read our strategic guide, Renewing Broadcom Contracts: Strategies to Secure Better Terms & Manage Uplifts.
Maintenance and support fees may be raised separately from license fees.
If your contract includes an auto-renewal clause and you don’t actively renegotiate, Broadcom will automatically renew you at its high list price.
Key risks to watch:
- Budget shock: Sudden cost spikes of 10–20% or more can bust your budget.
- Paying more for less: You might get charged more even if your usage has decreased.
- Compounding increases: Multi-year deals with uncapped hikes quickly snowball into huge costs.
- Auto-renew traps: Missing a cancellation notice can lock you into Broadcom’s pricing without a chance to negotiate.
Typical Broadcom Renewal Increases
Broadcom’s renewal quotes tend to come in much higher than expected. Common patterns include:
- Hefty uplifts: Maintenance fee uplifts of around 10–20% are common with no caps.
- Dual price hikes: Broadcom often raises license/subscription fees, as well as support fees, separately, effectively doubling the impact on your costs.
- Auto-renew at list: If you do nothing, many contracts auto-renew at full list price (with a built-in uplift).
These practices make it crucial to proactively negotiate your Broadcom renewals.
Tactic 1: Enforce Existing Caps
Check your current contract for any price increase cap on renewals. If a cap exists (e.g. no more than 5% per year), insist Broadcom honor it – they sometimes “forget” and quote a higher number. Point to the contract language and demand a corrected quote within the cap.
If you have no cap clause, push to include one now. Make it clear you need budget predictability – many vendors provide such protections, and Broadcom can too. Don’t finalize a renewal without securing a reasonable limit on year-over-year price increases.
Tactic 2: Negotiate Phased Uplifts
Don’t accept a huge increase all at once. If Broadcom proposes a 20% jump, counter with a phased uplift spread over time.
For example, agree to 0% in year 1 and 5% in year 2 instead of 20% immediately. This approach is more palatable: you avoid an overnight budget shock, and Broadcom still ultimately reaches a higher fee.
If Broadcom won’t budge on a big upfront hike, consider shortening the term.
Rather than a multi-year commitment at an inflated rate, do a 1-year renewal. That way, you can re-evaluate next year (and explore alternatives) instead of locking into high prices long-term.
Read about how to negotiate discounts, How to Negotiate Renewal Discounts with Broadcom.
Tactic 3: Use Usage Data to Push Back
Arm yourself with data on how you’re using Broadcom’s products. If your usage or headcount has dropped, there’s no justification for a higher renewal cost – in fact, you should argue for a price reduction or at least a flat renewal. If you have 20% fewer users this year, why pay more than you did last year?
Even if usage is steady, present your utilization stats to challenge any arbitrary increase. Show Broadcom that you’re not using more, so you shouldn’t be paying more. It’s hard for the vendor to argue against facts. Demonstrating that you know your numbers makes it more difficult for Broadcom to justify an unjustified uplift.
Tactic 4: Tie Increases to Inflation (CPI) or a Fixed Cap
If Broadcom insists on an increase, peg it to an objective benchmark, such as inflation. Negotiate a clause such as: “Renewal fees shall not increase by more than 3% annually or the Consumer Price Index (whichever is lower).” If inflation is 2%, you pay 2%; if Broadcom wants 10% but your cap is 3%, you pay 3%.
Ensure the increase is non-compounding (each year’s percent applies only to the original price) and that there’s no minimum floor. If inflation is zero, your price increase should be 0%.
Examples of protective wording:
- Best case: “Renewal fees shall not increase by more than 3% per year or CPI, whichever is lower, non-compounding.”
- Target: “Any annual renewal increase will be capped at 5%, with 0% in the first renewal year.”
- Fallback: “Renewal fee increases shall not exceed 7% per year, non-compounding.”
Considering early renewal? – Early Renewal Negotiation with Broadcom – Pros, Cons, and Tactics.
Tactic 5: Apply Caps to All Fees
Ensure your negotiated cap covers all recurring fees. Broadcom might agree to limit the license/subscription increase, but then try to raise support or maintenance fees without limit.
Explicitly state that no fee – whether for licenses, subscriptions, or support – can increase beyond the agreed cap. If Broadcom’s draft says something like “support renews at standard rates” (code for an uncapped increase), strike it out. The cap must govern every component of your renewal. This prevents Broadcom from shifting the price hike to another line item.
Tactic 6: Leverage Timing and Alternatives
Use Broadcom’s sales timeline to your advantage. Vendors are often more flexible at quarter-end or year-end when they need deals to close. Try to engage in negotiations around those pressure points, and use the end-of-quarter urgency to your advantage.
Also, let Broadcom know (subtly) that you’re considering alternatives.
Perhaps you’re evaluating a competitor’s product or looking at third-party support. No need for explicit threats – simply mentioning you’re exploring other options for cost reasons will plant the seed. If Broadcom senses a real chance of losing some of your business, they may think twice about a hefty uplift.
Another angle: offer Broadcom something in return for a better price.
For example, you could agree to a longer term or a broader product bundle if they significantly lower the renewal uplift. Essentially, you’re offering a bigger/longer commitment in exchange for better pricing.
Renewal Uplift Checklist
- Enforce price caps: If your contract has a renewal cap, invoke it.
- Get a cap if none: Negotiate a max % or CPI-linked limit on any increase.
- Phased increases: Counter big hikes with a proposal to spread them over time.
- Usage data leverage: Use internal metrics to justify a flat or lower renewal.
- All fees included: Make sure caps apply to subscriptions and support (no hidden fee hikes).
FAQs
Q: What’s a “normal” Broadcom renewal increase?
A: Broadcom often starts by asking for 10–20% more. But that’s just their opening bid. With pushback, many customers can bring the rate down to single digits – even 0% if you have the leverage. We’ve also seen some initial quotes come in extremely high (double the prior cost), which shows why you should never accept the first number.
Q: Can I negotiate a phased price increase instead of a big jump?
A: Yes. If Broadcom requests a significant one-time increase, propose phasing it in. For example, instead of a 12% immediate jump, negotiate ~4% per year for 3 years. Broadcom’s price still increases over time, but your budget can absorb it gradually. This is a common compromise to avoid a shock.
Q: How do I use CPI to limit renewal costs?
A: Insist on an inflation-linked cap. That means any yearly increase cannot exceed a set small percentage or the CPI rate – whichever is lower. For instance, “max 3% or CPI, whichever is lower.” If inflation is only 1%, you’d get at most a 1% increase. Make sure there’s no built-in minimum: if inflation is zero, your increase is zero.
Q: What if Broadcom won’t back down on a 15–20% uplift?
A: If they won’t compromise, you need to change the game. One option is to take a shorter renewal term – renew for just one year to buy time. This avoids locking in a bad rate for multiple years and lets you explore alternatives or escalate the issue. Also, make clear (with management backing) that a double-digit increase is a non-starter. If Broadcom senses you’re prepared to walk away, they may come back with a more reasonable offer.
Q: Should I cap support fee increases as well as software fees?
A: Absolutely. Any cap on renewal pricing must apply to all components, including maintenance/support fees. Otherwise, Broadcom might cap your license renewal at 5% but then raise support by 15%. Don’t let them separate the two. It’s standard to limit support increases, too – you’re entitled to keep those in check along with your subscription costs.
5 Actionable Strategies to Manage Broadcom Renewals
- Start early: Kick off renewal planning 6–12 months. Early prep gives you time to audit usage, line up approvals, and avoid last-minute traps.
- Insist on a cap: Limit annual hikes to a small percent or inflation (whichever is lower), with no built-in minimum increase.
- Leverage your data: Use usage and license metrics to justify a flat or reduced renewal. If you’re not using more, challenge any price increase.
- Phased or short-term deals: Counter high quotes by proposing phased increases or opting for a one-year renewal. Better a short extension than a bad multi-year deal.
- Get it in writing: Ensure any cap, freeze, or special term you negotiate is documented in the contract. If it’s not on paper, it won’t protect you later.
With a proactive strategy, you can mitigate Broadcom’s renewal price increases.
These tactics will help keep your IT spend predictable and fair despite Broadcom’s aggressive pricing tactics.
Read about our Broadcom Negotiation Service.
