Calculating TCO for Broadcom Licensing – Perpetual vs Subscription

Calculating TCO for Broadcom Licensing

Introduction – Why TCO Modeling Matters

Broadcom is aggressively pushing customers toward subscription software licenses, but perpetual licensing still exists for many Broadcom software products.

Choosing between these models isn’t just about technology – it’s about long-term cost. Without a total cost of ownership (TCO) model, enterprises risk overpaying.

A quick comparison of Broadcom subscription costs versus perpetual costs can be misleading if you only consider year-one expenses. The true financial picture emerges over a 3, 5, or 7-year horizon.

This guide offers a practical framework for comparing the costs of a Broadcom license between perpetual and subscription models, enabling IT procurement and finance leaders to make informed decisions. Read our complete guide to Broadcom Subscription vs Perpetual Licensing: How to Choose the Right Model.

Why model the TCO? Because Broadcom’s default proposal (often subscription-heavy) might appear cheaper initially, but can become dramatically more expensive over time.

By modeling costs, including all fees and potential increases, you gain leverage in negotiations and avoid unwelcome surprises down the road.

Let’s break down the steps to calculate TCO for Broadcom perpetual vs. subscription licensing.

Step 1 – Define the Models (Perpetual vs. Subscription)

Before crunching numbers, clearly define the two licensing models:

• Perpetual License (with Maintenance): You pay a one-time upfront license fee to own the software indefinitely. This is typically a capital expenditure (CapEx). Additionally, you pay annual support/maintenance (typically 20–25% of the license price per year) as an OpEx to receive updates and support. If you stop paying maintenance, you can still use the last supported version of the software forever, but you lose access to upgrades and official support.
• Subscription License: You pay a recurring fee (OpEx), such as an annual or multi-year upfront payment, which grants the right to use the software for that term, along with support and upgrades. There is no large upfront license cost – you’re essentially renting the software. However, if the subscription lapses, you lose the right to use the software entirely. In Broadcom’s model, subscription fees often cover everything (license rights + support). It smooths out budgeting (with no big upfront hit), but you never own the licensed asset.

In summary, perpetual licensing is ownership with ongoing maintenance, while subscription is time-limited usage as a service. This difference drives how costs accrue over time and who “owns” the risk if you stop paying.

Step 2 – Identify All Cost Components

With definitions in place, list the cost components we need to compare. For each model, consider the following:

For Perpetual License deals:

• Upfront License Cost: The initial purchase price of the software. Broadcom’s list price for the license is a starting point (e.g., $1,000,000 list in our example), and you may negotiate a discount on this (enterprise deals often see 20–40% off list for perpetual licenses, depending on volume and deal size).
• Annual Maintenance Fee: The yearly support/maintenance cost, typically 22–25% of the license’s list price (Broadcom often falls in this range). This grants access to support and upgrades. Maintenance is usually calculated based on the license’s net cost after discount (if you receive a 30% discount on the license, maintenance is typically 22–25% of that discounted price in many cases). Maintenance is an ongoing expense as long as you want support.
• Maintenance Uplifts: Does Broadcom have the right to increase the maintenance fee annually? If uncapped, Broadcom may impose an annual uplift of 3–8% on maintenance. For example, a $220,000 annual maintenance fee could increase to $234,000 next year with a 6% increase. Always review your contract: consider negotiating a maintenance cap (e.g., “maintenance shall not increase by more than 3% annually”) or factor in likely increases (we often assume a 5% annual increase for modeling purposes if no cap is stated).
• Support Duration: How long do you plan to pay maintenance? With a perpetual license, you could stop paying maintenance after a few years to save costs (and continue using the software without support). However, that comes with risk (no updates/fixes). For an apples-to-apples comparison with subscription, we usually assume you keep maintenance active for the period in question.

Read about Broadcom’s different license models, Broadcom’s SaaS, On-Prem, and Consumption Licensing Models (2023–2025).

For Subscription deals:

• Annual Subscription Fee: The recurring charge to use the software, typically quoted per year. Broadcom often prices subscriptions such that one year’s fee is roughly 30–40% of the equivalent license list price. (This can vary by product, but as a rule of thumb, a three-year subscription might roughly equal the upfront cost of a perpetual license + 1–2 years of maintenance.) The subscription fee includes support and updates. Multi-year subscriptions might be billed upfront or annually.
• Subscription Uplifts on Renewal: If you subscribe for multiple years or opt for a year-to-year plan, the vendor may increase the subscription fee at the time of renewal. Broadcom commonly attempts 3–7% annual uplifts on subscription renewals (unless you negotiated a price lock or cap). For example, a $300,000/year subscription could increase to $321,000/year after a 7% increase. It’s crucial to negotiate an uplift cap for future terms (e.g., “price increase not to exceed 5% at renewal”), or factor these increases into your TCO model if no cap is in place.
• Discounts on Subscription: Discounts on subscription pricing tend to be smaller than those on perpetual licenses. Why? Broadcom positions subscription as the strategic, forward-looking model, so they may be less flexible on deeply discounting it. You might see, for example, 10–25% off the subscription list price in an enterprise deal, whereas a perpetual license might receive a discount of 30–40%. Also, watch out for renewal discount resets – that is, even if you got 25% off in the initial term, Broadcom might only offer a smaller discount (or none) on the renewal unless you negotiate it upfront. Always clarify if the initial discount will carry over on renewals.

Other factors:

• Contract Term: How many years are you evaluating? Common frames are 3, 5, or 7 years for TCO. Broadcom often sells multi-year subscriptions (e.g., a 3-year commitment). For perpetual, you can project maintenance over the same period.
• CapEx vs. OpEx: Note whether your organization values paying upfront (CapEx) or spreading costs over time (OpEx). This can influence internal preference regardless of pure cost — some companies prefer the upfront investment (asset ownership), others prefer the predictability of subscriptions.
• Future Growth or Reduction: Will you need more licenses/users over time, or fewer? Perpetual means buying additional licenses as needed (more CapEx), whereas a subscription might allow adding capacity more fluidly (and the cost increases accordingly). However, reducing licenses (a “true-down”) is easier with perpetual licenses (you simply stop maintaining some licenses) than with subscription licenses, where contracts may not allow reducing quantities until renewal (or at all). This anticipated usage trajectory should be considered when planning costs.

Having identified these components, we can proceed to build the actual model.

Step 3 – Build a TCO Calculation Model

Now we take those cost components and formulate a total cost of ownership comparison. This can be done in a spreadsheet or even on the back of an envelope, but it’s essential to include all relevant costs over the same time period.

Here’s how to construct the model step by step:

1. Choose a Time Horizon: Decide whether you’re comparing costs over 3 years, 5 years, 7 years, or all of the above. (It’s wise to model multiple scenarios – often 3, 5, and 7 years – to see how the breakeven point moves.)
2. Perpetual License Scenario:
   • Initial License Cost: Start with the software license list price and subtract any negotiated discount. This is a one-time cost in Year 0 (purchase year).Annual Maintenance: Calculate the maintenance cost each year as a percentage of the license list or net price (clarify which base the vendor uses). Include any expected uplift per year. For example, if maintenance is 22% of the $1M list price, which equals $220K in Year 1, and you expect a 5% uplift, model Year 2 at $231K, Year 3 at $243K, and so on.Sum of Costs: Add the upfront license cost and all the maintenance payments for the duration. This sum is the TCO for perpetual over that period. (If you plan to drop maintenance in later years, you could stop adding after a certain year, but typically we assume continuous maintenance for a fair comparison to subscription.)
   Formula: TCO_perpetual = Upfront License Fee + (Annual Maintenance * Number of Years), including maintenance increases each year if applicable.
3. Subscription License Scenario:
   • Annual Subscription Fee: Start with the Year 1 subscription cost (after any discount). This is a recurring cost each year of the term.Renewal Uplifts: If your contract or industry norm suggests a yearly increase, apply that to each subsequent year. For example, Year 1: $ 300,000, Year 2 with a 5% increase: $ 315,000, Year 3: $ 331,000, etc. If you negotiated a fixed price for a multi-year term, then use the fixed amount for those years.Sum of Costs: Add up the subscription payments for all years in the term. This total is the subscription TCO for that period.
   Formula: TCO_subscription = Sum of (Annual Subscription Fee per year) over the term, including any uplifts.
4. Incorporate Discounts: Ensure the above costs reflect any upfront discounts you negotiated. For example, if the list license fee was $1 million and you received a 30% discount, use $ 700,000 as the upfront amount in the model. Likewise, if the subscription list is $350,000/year and you receive a 10% discount, use $315,000/year in the model. It’s important to apply realistic discount levels to both scenarios. (Tip: Because Broadcom often discounts perpetual more than subscription, run a scenario with different discount assumptions to see the impact.)
5. (Optional) Calculate NPV: For a true apples-to-apples financial analysis, consider the net present value (NPV) of each cash flow. Future costs should be discounted back to today’s dollars using your company’s discount rate or cost of capital (commonly 2–5% in IT budgeting). NPV is useful when you need to account for the time value of money, as paying $1 million today versus spreading it over several years has significant financial implications. If you calculate the NPV of each scenario’s cash flows, you can directly compare the present cost of perpetual (front-loaded) versus subscription (evenly spread) models. This step is more advanced, but if your finance team is evaluating CapEx vs OpEx, it can be important. For a simpler comparison, you can also compare the raw out-of-pocket totals without discounting.
6. Compare the Totals: Once you have both totals (and/or NPVs) for the chosen time period, you can identify which is lower and by how much. This tells you the cost difference and can reveal the “breakeven point” (the point in years where both options cost the same overall).

By building this model, you create a clear financial picture of Perpetual vs. Subscription TCO. Next, we’ll apply this model to an example and illustrate how the costs might unfold over time.

Step 4 – Example TCO Calculation (Perpetual vs Subscription)

Let’s walk through a hypothetical example to illustrate a Broadcom license cost comparison. We’ll use round numbers to make it easy to follow:

• Software List Price: $1,000,000 (for a perpetual license of a Broadcom software product).
• Perpetual Scenario Assumptions: 22% annual maintenance (typical Broadcom rate), no maintenance cost increase for this baseline scenario, and no discount on list price just for simplicity in calculation (we will consider discounts later).
• Subscription Scenario Assumptions: The yearly subscription fee is 35% of the list price (i.e., $350,000 per year), with no price increase in the initial term.

Calculate 5-Year TCO for Perpetual:

• Upfront license purchase in Year 0: $1,000,000.
• Annual maintenance: $220,000 per year. Over 5 years, maintenance totals $1,100,000 (that’s $220K × 5).
• 5-year Perpetual TCO = $1,000,000 + $1,100,000 = $2,100,000.

Calculate 5-Year TCO for Subscription:

• Annual subscription fee: $350,000.
• Over 5 years, assuming no uplift during that period, total = $350K × 5 = $1,750,000.
• 5-year Subscription TCO = $1,750,000.

At first glance, in this simplified example, the subscription costs $ 350,000 less than the perpetual option over five years. The subscription model appears more cost-effective in a 5-year view. But this isn’t the full story—now let’s layer in more realistic factors like uplifts and discounts:

Factoring Uplifts: Suppose Broadcom can increase fees by ~5% each year in both cases. If maintenance is not capped, the $220,000 in Year 1 could grow to approximately $268,000 by Year 5. Similarly, the $ 350,000 subscription could grow to around $ 424,000 by Year 5 if a 5% annual uplift is applied. Recalculating with a 5% yearly increase:

• Perpetual 5-year TCO (with 5% maintenance inflation) ≈ $2.2M.
• Subscription 5-year TCO (with 5% annual uplift) ≈ $1.93M.
  The gap narrows slightly (subscription still has an edge around $2.2M vs $1.93M in this scenario).

Factoring Discounts: Now, assume you negotiate a better deal:

• Perpetual license discount: 30% off the list price, so the upfront cost is $ 700,000 instead of $ 1,000,000. Maintenance is then 22% of $700,000, which equals $154,000/year (often, maintenance is calculated based on the discounted license price).
• Subscription discount: 10% off, so $315,000/year instead of $350,000.
  Using these discounted values (and still assuming 5% annual increases on those fees for apples-to-apples):
  • 5-year Perpetual TCO = $700K + (sum of five years of maintenance starting at $154K with 5% uplift each year). That maintenance sum ≈ is approximately $0.85, so the total ≈ is approximately $1.55 (the NPV would be a bit lower).
  • 5-year Subscription TCO = sum of five years of subscription starting at $315K with 5% uplift. That sums ≈ $1.73M.

In this discounted scenario, perpetual actually comes out cheaper (~$1.55M vs $1.73M) over 5 years. The advantage flipped because we assumed a deeper discount on perpetual. This highlights how assumptions on discounts and uplifts change the outcome – exactly why you should model your specific deal.

Breakeven Analysis:

When does the subscription model’s cumulative cost catch up to (or exceed) perpetual? In many cases, the breakeven point is around 4–6 years. In our first scenario with no discounts, by year 5, the subscription was still cheaper; by year 6, it might be about equal, and by year 7, the perpetual option would likely cost less overall.

If subscription fees are on the higher end (closer to 40% of the list annually) or maintenance is lower (say 20% with no increases), the subscription can catch up even faster (perhaps around year 4 or 5).

On the other hand, if the subscription is modest (30% of the list) and maintenance is expensive or increases, it may take closer to 7+ years to break even.

The key point: the longer the timeframe, the more likely a perpetual license with maintenance will eventually be the lower-cost option. Subscription costs continue to accumulate, whereas the big expense of a perpetual license was paid up front.

Read what to do with legacy contracts, Broadcom Legacy Perpetual Contracts – What Customers Need to Know

To summarize this example, here’s a comparison table of the hypothetical 3, 5, and 7-year costs under one set of assumptions:

Assumptions: Maintenance 22% of $1M/year (no increase), subscription $350K/year (no increase). No discounts applied. Different assumptions will change the numbers, so use this as a template and plug in your own figures.

The table highlights how time changes the equation. If you only plan to use the software for 2–3 years, a subscription is usually a no-brainer (cheaper). If you expect to use it 5+ years, perpetual becomes financially attractive.

Next, we’ll discuss other qualitative factors (flexibility and risks) and then cover negotiation tips to secure the best deal in either scenario.

Step 5 – Factor in Flexibility & Risk Considerations

Cost isn’t the only factor in a TCO comparison; you must also weigh flexibility, feature differences, and risk:

• Long-Term Flexibility: Subscription licenses can offer more flexibility in theory. If your needs increase, you can often scale up mid-term (for a price). If needs decrease, you hope to scale down at renewal (though Broadcom contracts often do not allow “true-down” during a term, and even at renewal, they may not reduce your commitment easily without renegotiation). Perpetual licenses are less flexible in that you commit upfront to several licenses. If you have over-provisioned, you own those licenses (a sunk cost), but you can choose to drop maintenance on any unused licenses to save future costs. On the flip side, if you need more licenses, perpetual means another large purchase; subscription, you might be able to add incrementally.
• Shelfware Risk: Shelfware means you paid for software that isn’t being used. Both models have this risk, but it manifests differently:
  • With perpetual, shelfware risk is an upfront financial risk – if your business shifts or the software becomes obsolete, you have already spent that capital. However, you could stop paying maintenance to cut costs, and you still retain the right to use the licenses (maybe repurpose them elsewhere).
  • With a subscription, you’re committing to spend over time. If your usage drops, you might be stuck paying for a subscription quantity you don’t need until the term ends. Broadcom often pushes for multi-year, non-cancelable subscriptions (for example, a 3-year commitment). If you realize after 1 year that you only use half the licenses, you generally cannot get a refund or drop the rest until the term is over – you keep paying for shelfware. So, while subscription is touted as “pay as you go,” in practice, enterprise subscriptions can lock you in just as tightly. Always check if a subscription deal allows adjustments or not (many Broadcom deals do not allow downward adjustments mid-term).
• Upgrades and Features: Subscription agreements typically include all software upgrades, as well as additional entitlements or bundled features that perpetual licenses might charge separately for. With perpetual, you get upgrades only if you stay on maintenance. From a functionality standpoint, a subscription might ensure you’re always on the latest version. Perpetual gives you the choice to skip upgrades if, say, a new version isn’t desirable – but you’re paying maintenance regardless, so most will take the upgrade.
• End-of-Life and Support Risks: If you own a perpetual license, theoretically you can use it forever – but practically, if Broadcom decides to end support for that product or that version, you could be pressured to upgrade or migrate (possibly to a subscription). This has happened: vendors may announce that new versions or certain add-ons are only available to subscription customers, attempting to phase out perpetual licenses. With a subscription, if Broadcom later changes strategy or raises prices, you face a different risk: you either pay what they ask or lose the software. Perpetual gives you a fallback (you can keep using the old version) that a subscription doesn’t. This higher renewal risk with subscription means each renewal is a potential point of vendor lock-in pressure.

In summary, perpetual licenses provide continuity and control (you decide if and when to keep paying maintenance, and you always have a usable version).

In contrast, subscription licenses offer convenience and up-to-date access (as long as payments are made) but at the cost of continuous dependency on the vendor.

When calculating TCO, consider what value these qualitative factors have for your organization. Sometimes a slightly higher cost is worth the flexibility, or vice versa.

Step 6 – Negotiation Implications and Strategies

Understanding the TCO over various scenarios arms you with negotiation power. Here are key implications and tips for negotiations with Broadcom:

When Broadcom Pushes Subscription:

• Do your homework (and show it): Before agreeing to switch to a subscription, model out the 3, 5, 7-year TCO and be ready to discuss it. Broadcom reps might emphasize the lower Year 1 cost or “latest version included” benefits. Counter with data: “Over 5 years, with your proposed pricing, subscription will cost us 15% more than maintaining our perpetual licenses. What can we do about that?”
• Negotiate Renewal Protections: A significant concern in subscription deals is the renewal process. Push for uplift caps (e.g., no more than a 3% annual increase or at renewal) to prevent cost ballooning. Also, try to lock in that any discount given now persists at renewal. Without this, you might get a great price for three years, then a huge jump in year four when the discount evaporates.
• Ask for Conversion Credits: If you are an existing Broadcom customer with significant investment in perpetual licenses, don’t “throw them away” when moving to subscription. Ask Broadcom for credit or trade-in value for those licenses. For example, “We paid $1M in licenses already – if we move to subscription, we want an upfront credit or a heavily discounted subscription fee for those users we already own.” Broadcom may not be able to freely offer this, but it’s a reasonable request to make the transition fair. Some customers negotiate a one-time credit or a reduced subscription rate for the first term as compensation for unused value in their perpetual licenses.

If You Prefer to Stay Perpetual:

• Negotiate Maintenance Caps or Locks: Ensure your maintenance rates won’t creep up excessively. Try to cap maintenance increases (e.g., lock the percentage at 22% with no more than a 3% annual increase). If possible, negotiate a multi-year maintenance renewal at a fixed rate. Broadcom’s default might be to raise maintenance annually unless otherwise specified.
• Secure Long-Term Support Commitments: If you worry Broadcom will curtail support for perpetual licenses in a push to force subscription, get assurances in writing. This could be, for instance, a clause that guarantees maintenance and support availability for your product for X years, or that your version will continue to receive critical updates. Essentially, reduce the risk of Broadcom sunsetting your perpetual option.
• Volume and Bundling Deals: Broadcom may argue that subscription is “the future.” If you hold your ground on perpetual, they might charge a premium or limit certain bundle offers. Be prepared to justify why perpetual is better for you (use your TCO analysis). Also, leverage competition or alternative solutions if possible – showing that you have options can make Broadcom more flexible on terms.

General Negotiation Tips (Both Models):

• Maintain Walking-Away Power: Don’t reveal a strong preference without leverage. If Broadcom senses you’re desperate to stay perpetual or, conversely, that you’re fully sold on subscription, they’ll be less likely to offer concessions. Indicate that you have a business case either way, and you’ll choose whichever model delivers better value.
• Consider Hybrid Approaches: In some cases, a mix can be effective – perhaps keeping some products on a perpetual basis (with steady long-term use expected) and shifting others to a subscription model (for new or rapidly changing needs). You can negotiate a deal that encompasses both, using the perpetual vs subscription trade-offs to your advantage.
• Document Everything: Ensure that any promises (price caps, discount carry-over, ability to adjust quantities, etc.) are clearly written into the contract or order form. Verbal assurances hold no value at renewal time if they’re not contractual.

By negotiating with the TCO in mind, you can avoid common pitfalls, such as underestimating the 5-year subscription cost or being surprised by a huge renewal bill. Now, let’s address a few frequently asked questions on this topic.

FAQs

Which is cheaper over five years – a subscription or a perpetual license?
It depends on the pricing specifics, but often the costs are very close around the 4–5 year mark. In many Broadcom deals, the subscription cost will be lower in the first few years. By year 5, the total spend on subscription might be comparable to owning a license and paying maintenance. For example, if a subscription is ~35% of the license price per year, five years of subscription (~175% of license cost) versus a perpetual license plus five years of maintenance (~210% of license cost if maintenance is 22%) are in the same ballpark. With negotiated discounts or price increases, the balance changes. Bottom line: there’s no universal answer – you should plug in Broadcom’s quoted numbers for your deal. However, generally, a subscription is cheaper in the short term, and a perpetual license can be cheaper if you use the software long-term (beyond 5-6 years).

Does Broadcom allow perpetual renewals?
Yes, if you already have perpetual licenses, Broadcom will typically allow you to continue renewing your annual maintenance (support) on those licenses – at least for the time being. Broadcom has shifted its strategy to favor subscription-only models, especially after acquisitions, but it hasn’t outright canceled existing perpetual licenses. That said, they may not allow new perpetual license sales for some product lines acquired (for instance, Broadcom ceased selling new perpetual licenses for certain VMware products after the acquisition). If you have an active perpetual contract, you can maintain it through support renewals. Just be mindful: Broadcom could increase maintenance fees or eventually announce end-of-life for a product version to nudge customers toward subscription. Always verify with Broadcom if there are any policy changes on renewing support for your perpetual licenses.

How do I factor in uplifts to TCO?
To factor uplifts (annual price increases) into TCO, include a growth rate on recurring fees in your model. For example, for maintenance uplifts: if Year 1 maintenance is $200K and you expect a 5% uplift each year, use $200K, $210K, $220.5K, etc., in your year-by-year cost breakdown. Do the same for subscription if the contract doesn’t fix the price: e.g., Year 1 $300K, assume +5% → Year 2 $315K, Year 3 $331K, and so on. Then add those up. Essentially, you’re compounding the annual fee by the uplift rate for each subsequent year. Many companies create an Excel model with a column for each year and apply a formula like “previous year cost × (1 + uplift%)”. This ensures your TCO projection is realistic. It’s safer to assume some uplift (say 3–5% annually) even if Broadcom hasn’t explicitly stated it, because in practice, we often see maintenance or subscription costs trending up over time. If you negotiate a price cap or a multi-year fixed rate, adjust your model accordingly (e.g., 0% uplift for the fixed term, followed by a one-time adjustment at renewal, if applicable).

5 Actionable TCO Best Practices for Broadcom Deals

To wrap up, here are five best practices when evaluating and negotiating perpetual vs subscription licensing with Broadcom:

1. Run Multiple Timeframe Scenarios: Always model the costs for 3, 5, and 7 years (or even longer if the software is mission-critical). This will highlight the breakeven point and long-term cost implications. Don’t just look at year 1 or year 3 – a deal that looks great at 3 years could turn out costly by year 6.
2. Include Uplifts and “What-If” Assumptions: In your TCO calculations, incorporate reasonable uplifts (e.g., 5% per year) for maintenance or subscription renewals, even if the sales representative states, “we don’t expect increases.” It’s better to be pleasantly surprised by no increase than blindsided by one. Also consider what-if scenarios: What if you need 20% more licenses later (can you afford that under each model)? What if you stop using the software after 4 years?
3. Negotiate Price Protections: Utilize your TCO findings to secure more favorable terms. For perpetual, push for a cap on maintenance fees (or lock them for a period). For subscription, insist on renewal price caps or locked discounts. Ensure any initial discount doesn’t vanish at renewal. The goal is to prevent unexpected cost spikes that would throw off your TCO projections.
4. Seek Credit for Existing Investments: If you are transitioning from perpetual to subscription, don’t start from scratch value-wise. Negotiate credits or migration discounts for the licenses you’ve already paid for. Conversely, if Broadcom is ending perpetual sales and you’re essentially forced to subscribe, use that as leverage to get a better subscription rate (e.g., “We’ll move to your subscription, but we need a X% discount or a fee waiver to make it equitable given our sunk costs.”).
5. Align the Model with Your Financial Strategy: Ultimately, select the licensing model that aligns with your organization’s budgeting and risk profile. If your company prefers predictable OpEx and regularly refreshes technology, a subscription might align well – but only if the TCO makes sense. If you treat software as a long-term asset and want the security of owning the license, a perpetual license may be better. Communicate with your finance team: consider the impact on balance sheets (CapEx vs OpEx) and use NPV analysis if large sums are involved. A slightly higher nominal cost might be acceptable if it meets cash flow or accounting preferences, and vice versa.

By following these best practices, you’ll be equipped to make a clear, strategic decision on Broadcom perpetual vs. subscription licensing.

In negotiations, you’ll have the data to back up your position and ensure the chosen model delivers the best value over the life of the software.

Remember, the goal is not just to save money in year one, but to manage your total cost of ownership wisely for years to come. Happy negotiating!

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