Broadcom Volume Discounts and Bundling
Introduction – Volume & Bundling in Broadcom Deals
Broadcom is known to use volume discounts and product bundling as powerful levers to encourage larger customer commitments. This means that the more you buy (or the more products you commit to), the better the per-unit pricing you will be offered.
Done right, leveraging volume and bundle deals can significantly reduce your cost per license.
Done wrong, however, it can lead to paying for unnecessary software – commonly referred to as “shelfware” – and create lock-in that is hard to escape. For a full guide, read Broadcom Pricing & Discount Models: Benchmarks, Multi-Year Deals, and Cost Increases.
For CIOs, procurement leaders, and IT asset managers, the challenge is maximizing savings from Broadcom’s volume and bundling offers without falling into the trap of overspending on products that are not needed.
Broadcom’s expansive portfolio (mainframe, security, and infrastructure software) means there are many bundling opportunities.
The key is to be strategic and skeptical – ensure any big commitment truly aligns with your usage and needs.
How Volume Discounts Work at Broadcom
Broadcom uses tiered volume pricing: the more you buy in one deal, the lower the per-unit cost. A single large contract will usually yield a better discount percentage than multiple smaller deals adding up to the same spend.
You can maximize volume discounts by consolidating purchases. Aggregating all demand across business units, regions, or product lines into one enterprise-wide agreement may push you into higher discount tiers that would be unreachable with fragmented deals. In other words, a $5 million global deal often gets a deeper discount than five separate $1 million deals.
Similarly, try to combine separate renewals into one negotiation. By co-terming licenses to expire at the same time, you present Broadcom with a larger renewal event, increasing your leverage and likely securing a larger discount. This strategy also simplifies contract management by consolidating multiple renewals into a single master renewal.
Finally, consider multi-year commitments as a volume lever.
Broadcom often offers more aggressive pricing if you commit to a longer term (e.g. ,a 3-year agreement) because it guarantees them more future revenue.
If you opt for this route, negotiate caps on any annual price increases and ensure the term aligns with your forecasted needs, so you don’t overcommit beyond what you’ll actually use.
How Bundling Works
Broadcom also incentivizes customers to bundle multiple products in one deal. Bundling refers to purchasing a package of software (across Broadcom’s portfolio or within a product suite) under a single contract, typically in exchange for better pricing than buying each item separately.
With Broadcom’s broad product range (from mainframe tools to security software to VMware’s solutions), they may offer cross-portfolio bundle deals.
For example, you may receive a more attractive price if you purchase Symantec security licenses along with your VMware renewal, rather than purchasing VMware alone.
Within the VMware family, bundling often takes the form of a suite that combines several products. Instead of licensing vSphere, vSAN, NSX, etc. individually, Broadcom might offer an all-in-one VMware bundle (similar to Cloud Foundation) that includes compute, storage, networking, and management tools.
The list price of such a suite is higher than the price of a single product, but it’s marketed with an overall discount compared to buying each component separately.
The pitch is that a bundle deal saves money (e.g., “20% off if you buy the whole suite”). However, this attractive discount can sometimes mask a higher net spend. If the bundle makes you pay for extra components or capacity you wouldn’t otherwise need, your total costs could actually grow despite the discount.
In short, bundling might make each unit cheaper, but it may cause you to purchase more units than planned. Always break down a bundle offer into its individual parts and compare it to your actual requirements.
Another consideration is flexibility. A bundle comes as a single contract covering multiple products, which can tie those products together.
Down the line, you may find it difficult or expensive to drop one component because its pricing and discount are tied to the rest. Broadcom is well aware of this – once you’re dependent on a broad bundle, unbundling at renewal becomes painful and costly.
Read about the VMware pricing increases, VMware Licensing Cost Increases Under Broadcom – What Enterprises Should Expect.
Comparative Scenarios: Volume & Bundle Savings
To illustrate the impact of volume and bundling, consider three simplified purchasing scenarios:
| Scenario | Description | Discount Outcome | Cost Per Unit |
|---|---|---|---|
| A: Isolated Purchase | A single product bought in a silo (e.g., one VMware product for a single division). Limited volume (few licenses). | Only qualifies for a minimal discount tier (small deal). | Highest per-unit cost (near list price). |
| B: Multi-Product Bundle | Multiple Broadcom products bundled in one deal (e.g., VMware vSphere + vSAN + security software together). Larger combined spend. | Qualifies for a better discount tier due to higher total value. | Moderate per-unit cost (each product discounted compared to buying separately). |
| C: Global Aggregated Deal | All enterprise-wide needs consolidated (e.g., all business units globally, across VMware, mainframe, etc., in one master agreement). Very high volume commitment. | Achieves top-tier discount percentages (very large deal). | Lowest per-unit cost (maximized volume discount across the board). |
In short, Scenario A yields the least savings, Scenario B offers a moderate discount by bundling, and Scenario C unlocks the deepest discounts through full consolidation – at the cost of a much larger commitment.
Risks of Over-Bundling
While volume and bundle strategies can save money, over-committing to large bundles or volume purchases carries risks that buyers need to manage:
- Shelfware Risk: The biggest danger is buying software you don’t actually need or use, just to reach a volume or bundle discount. Unused software (shelfware) is a waste of budget. A bundle discount might look attractive, but if 20% of the licenses sit unused, your effective savings evaporate.
- Reduced Flexibility: Bundled deals often lack the flexibility to adjust later. If you buy a multi-product bundle, you might not be able to true-down (reduce license counts) for one product without affecting the whole deal. Similarly, dropping a product from the bundle at the next renewal could result in forfeiting the bundle discount on all products. This rigidity can lock you into maintaining licenses for products, as unbundling would result in a sharp price increase for the remaining items.
- Future Lock-In: Bundling many tools under one vendor increases your dependency on that vendor’s ecosystem. Broadcom (and other vendors) recognize that once you’re deeply invested in a bundle that touches many parts of your IT environment, switching costs become very high. At renewal time, Broadcom may push higher prices or less favorable terms, as they know switching is very difficult. In other words, you might get a great price up front, but any future growth or renewal could be priced significantly higher once you’re dependent on their bundle.
In summary, buyers must weigh the immediate savings against the long-term implications.
A large volume or bundle deal should not sacrifice future flexibility or economy. Every product included should have a clear usage plan, and the contract should mitigate lock-in where possible.
Negotiation Tactics for Volume and Bundling
When negotiating with Broadcom, use these tactics to maximize savings without overspending:
- Bundle Only What’s Necessary: Don’t include software in a bundle unless you have a clear plan to use it long-term. Avoid adding “extras” just to increase the discount.
- Aggregate Your Volume: Consolidate all purchases and renewals across your enterprise into a single deal to reach higher volume discount tiers. Negotiate contract language to count all global spend toward volume thresholds.
- Built in Flexibility: Secure true-down and swap rights in any bundle agreement. This lets you reduce quantities or exchange products later without losing your discount if your needs change.
- Leverage for Better Terms: If you’re committing to a larger bundle, consider asking Broadcom for additional concessions in return (e.g., caps on future price increases, more favorable payment terms, or extra support/training).
- Verify the Value: Always compare the bundled cost to the cost of buying the products individually. Ensure the “savings” are real. If Broadcom won’t provide a breakdown, do the analysis yourself to confirm the bundle is financially beneficial.
When Bundling Makes Sense
Bundling can be a smart strategy when certain conditions are met:
- All-Included Products Needed: Bundle only if you will actively use every product included, and only if the combined deal offers a significantly better price than buying them separately.
- Flexible Terms Included: Only bundle when Broadcom agrees to terms, such as true-down rights or price increase caps, that allow you to adjust later.
When to Avoid Bundling
Not every bundle offer is a good deal. Be cautious about bundling in situations like these:
- Bundling Just for Discount: Don’t bundle products solely to chase a bigger discount. If it forces you to buy software you don’t need, you’ll waste money on unused licenses. A higher discount percentage on paper doesn’t help if you pay for shelfware. Don’t include any product in the deal unless it has a real planned usage.
- Better Alternatives Available: If you have viable alternatives or third-party support for a product, consider excluding it from the bundle. Bundling everything with one vendor eliminates your ability to switch part of your spend to an alternative.
FAQs on Broadcom Volume & Bundle Deals
Q: Do Broadcom bundles always save money?
A: Not always. Bundles only save money if you truly need all the included products and the discount is deep enough. If you bundle software you wouldn’t otherwise buy, you might spend more overall despite the nominal discount.
Q: Can I aggregate spend across subsidiaries for better discounts?
A: Yes – and you should. Negotiating a global agreement that pools all your company’s purchases together will help you reach higher volume tiers. It may require coordination, but it’s one of the most effective ways to maximize discounts.
Q: What’s the risk of bundling VMware products (vSphere, vSAN, NSX, etc.) into one suite?
A: The risk is paying for more than you use. If you don’t need every component in the suite, bundling them means some may sit unused (shelfware). Plus, once they’re bundled, you typically have to renew the whole suite even if you only heavily use part of it – making it hard to drop a component later.
Five Actionable Cost-Saving Tactics
- Aggregate Enterprise-Wide Volume: Combine all purchases and renewals across your company into one deal to hit the highest discount tiers.
- Bundle Only What You Use: Only include products you truly need and will use; avoid adding items just to chase a discount.
- Secure Flexibility Rights: Negotiate true-down and swap clauses so you can adjust bundle quantities or components later without penalty.
- Compare Bundle vs. Standalone Costs: Calculate the total cost of the bundle versus buying separately to ensure the bundle truly saves money.
- Leverage Bundling for Other Benefits: Use the promise of a bigger deal to negotiate non-price perks (for example, caps on future price increases, better payment terms, or extra support services).
By applying these tactics, you can achieve real savings through Broadcom’s volume and bundling incentives without falling victim to shelfware or lock-in. The goal is to secure lower prices and favorable terms while ensuring every product in your agreement delivers genuine value to your organization.
Read about our Broadcom Negotiation Service.
