Building a Broadcom Negotiation Team
Introduction: Broadcom’s acquisition of VMware has made enterprise contract negotiations more challenging.
Unlike VMware’s historically flexible approach, Broadcom is notoriously rigid – expect “take it or leave it” pricing, strict multi-year terms, and zero grace on renewal deadlines. In this environment, ad-hoc or siloed negotiations won’t succeed.
Companies need a cross-functional team and a well-defined negotiation plan (playbook) to navigate Broadcom’s tactics. Read our overview for Planning a Broadcom Software Negotiation: Timeline, Preparation & Checklist.
Core Team Roles & Responsibilities
A Broadcom negotiation demands input from multiple departments. Key roles on your team should include:
- CIO / IT Leadership: Ensures the deal aligns with overall business and IT strategy, and provides executive clout. The CIO (or CTO) acts as an executive sponsor with final decision authority, able to escalate issues to Broadcom’s top management if needed.
- Procurement / Sourcing Lead: The lead negotiator and project manager for the deal. Procurement coordinates the team’s efforts and serves as the primary interface with Broadcom’s sales team. They handle vendor communications, pricing discussions, and benchmarking.
- Legal Counsel: Reviews and negotiates contract terms to protect the company’s interests. Legal ensures critical protections (e.g., termination rights, liability caps, audit limitations) are in place and flags any risky clauses early. Engaging legal early prevents last-minute surprises and ensures compliance issues are addressed throughout.
- Technical SMEs: Subject matter experts (e.g,. VMware admins, infrastructure architects) who provide data on current usage and define technical requirements. They identify what licenses/features are actually needed versus unused, and assess the impact of Broadcom’s proposals (or possible alternatives).
- Finance: Provides budgeting and cost modeling expertise. Finance will forecast the multi-year expenditure under various scenarios, establish budget limits, and ensure that funds are approved in advance. This role ensures the final deal aligns with financial constraints. Having finance at the table gives credibility to cost discussions and avoids negotiating a deal that finance later rejects.
Extended Roles & External Advisors
- Vendor Management & Security: If you have a Vendor Management Office or asset manager, include them. These internal teams track contract details and ensure nothing critical (renewal notices, compliance needs) is overlooked.
- External Licensing Advisors: Expert consultants bring benchmark pricing intel and know Broadcom’s playbook. For large or complex deals, their guidance can reveal hidden pitfalls and negotiation opportunities. Use them as behind-the-scenes advisors while your team maintains control of the discussions.
The Negotiation Playbook
Develop a negotiation playbook – a document that outlines your strategy and provides a step-by-step plan.
Key components to include:
- Clear Objectives: Define your primary goals (e.g., target pricing or key contract terms, such as a cap on annual increases or the flexibility to reduce licenses). Know what a “win” looks like.
- Fallback Positions: Identify what you can concede if needed (and what you cannot). Establish your walk-away points and consider alternatives in case Broadcom’s offer is unacceptable.
- Escalation Plan: Establish triggers for involving higher-level executives – determine when/how to escalate to Broadcom executives. Also, determine which internal approvals (e.g., CFO, board) are required for significant concessions so you can obtain them promptly.
- Timeline & Milestones: Map the negotiation timeline backward from the renewal date, with internal deadlines for each phase (audit complete, initial offer, contract redlines, approvals) to ensure everything stays on track and avoids last-minute crunches.
With the playbook ready, execute it with discipline. Here are important dos and don’ts for Broadcom negotiations:
Do:
- Start early: Kick off internal planning at least six to 12 months before your Broadcom renewal.
- Use data & benchmarks: Base your requests on facts – know your usage, entitlements, and peer pricing benchmarks.
- Align internally: Ensure IT, procurement, finance, and legal agree on goals and speak with one voice to Broadcom.
- Escalate when needed: Involve senior executives to push for better terms if negotiations stall.
Don’t:
- Don’t accept the first offer or timeline: Broadcom’s initial terms often favor them – negotiate the details and don’t be rushed by vendor deadlines.
- Don’t negotiate blindly: Never proceed without accurate usage data and a clear understanding of what you need (and don’t need).
- Don’t delay legal review: Have legal check terms early; don’t wait until the end to discover unacceptable clauses.
- Don’t allow silos: Keep all stakeholders in the loop – silence or disconnects between teams will slow the process and weaken your position.
Use our preparation checklist, the Broadcom Negotiation Preparation Checklist.
Meeting Cadence & Governance
To keep the negotiation on track, establish a regular meeting cadence and clear governance:
- 12–6 Months Out: Monthly team meetings to review preparation progress (license audits, budgeting, initial strategy) and ensure early tasks stay on schedule.
- 6–3 Months Out: Bi-weekly meetings as engagement with Broadcom begins in earnest (e.g., discussing quotes, proposals). These frequent check-ins enable the team to react quickly to any new information and refine their approach continuously.
- Final 2 Months: Weekly meetings in the last critical weeks before the deadline. Use these to resolve final sticking points, synchronize responses to Broadcom, and ensure all necessary approvals (finance, legal, executive) are in place for a timely sign-off.
Between meetings, maintain a shared status dashboard and keep leadership informed at key checkpoints to enable swift decisions.
Good governance (clear ownership, transparency, and timely decision-making) will prevent bottlenecks and last-minute chaos.
Pitfalls & Lessons Learned
Watch out for these common pitfalls observed in Broadcom negotiations:
- Misaligned internal team: If stakeholders aren’t unified, strategy suffers. Align goals early and maintain open communication.
- Late legal involvement: Engaging a lawyer too late means discovering unfavorable contract clauses at the last minute. Loop in legal from the start to spot and fix issues early.
- No escalation path: If you rely solely on the account manager, you may be left with no improvements. Plan to escalate to Broadcom’s higher-ups when critical issues stall.
- Missed deadlines or auto-renewals: Missing notice or renewal dates can trigger unwanted renewals or fees (like Broadcom’s 20% late fee). Track all dates and act well ahead of deadlines.
Frequently Asked Questions (FAQ)
Q: Who should lead a Broadcom negotiation team?
A: A senior procurement manager should typically lead, coordinating IT, finance, and legal input. Procurement handles the day-to-day vendor discussions, with the CIO or another executive sponsor providing top-level guidance and stepping in for major decisions or escalations.
Q: Do we need external advisors or consultants for Broadcom negotiations?
A: External experts can be very helpful if you lack Broadcom negotiation experience or face a complex, high-stakes renewal. They bring benchmark data and know Broadcom’s pitfalls, so their guidance can prevent costly mistakes and often pays for itself. If you already have a highly experienced internal team with strong market knowledge, you might not need outside help.
Q: How do we avoid internal silos slowing down the negotiation?
A: Treat it as one unified project. Establish a cross-functional task force comprising all key departments and convene regular joint meetings. Utilize a shared communication hub or tracker to ensure everyone remains informed. This transparency and teamwork prevent the delays and disconnects that silos cause.
Five Actionable Recommendations
- Appoint a single negotiation leader. Designate one person (preferably from procurement) to coordinate the process from start to finish.
- Involve legal counsel from day one. Don’t wait – have your lawyers review Broadcom’s terms early and throughout the process. Catching deal-breaker clauses early means you can negotiate better protections when it matters.
- Create a written negotiation plan. Document your playbook: key objectives, acceptable trade-offs, and team guidelines (the major do’s and don’ts). A written plan keeps the team disciplined and aligned, especially under the pressure of Broadcom.
- Set a firm meeting schedule. Use regular meetings (monthly, then bi-weekly, then weekly as the renewal nears) to drive progress and alignment. A set cadence forces proactive preparation and quick issue resolution, rather than last-minute scrambling.
- Leverage external insight when needed. For large or complex deals, consider seeking outside help to bolster your expertise. Benchmark data or expert advice on Broadcom’s tactics can give you leverage and confidence.
Read about our Broadcom Negotiation Services
