Co-Terming Broadcom & VMware Contracts
Why Co-Terming Matters
Without co-terming, Broadcom’s default approach leaves you with scattered renewals and lower bargaining power. To co-term Broadcom contracts (VMware, Symantec, CA, etc.) means aligning all those agreements so they renew on the same date.
This simplifies management and gives you significantly greater negotiating leverage by consolidating many fragmented renewals into a single large renewal event. Read our guide to Maintaining License Flexibility with Broadcom: Co-Termination, True-Downs, and Ramp-Up Pricing.
One big renewal means a bigger deal that Broadcom is more likely to offer discounts on, and you avoid the headache of juggling multiple expiration schedules.
Step 1: Identify All Renewal Dates
Begin with a thorough inventory of all your Broadcom-related contracts.
Gather every software license or support agreement across Broadcom’s portfolio – for example, VMware virtualization, Symantec security, CA mainframe tools, etc. For each contract, document key details such as:
- Renewal date: When does it expire?
- Notice period: How far in advance must you notify Broadcom if you don’t plan to renew (e.g. 30, 60, or 90 days)?
- Price escalators: Note any built-in renewal uplifts or auto-renewal clauses that could increase costs.
- Contract type: Annual or multi-year term? Perpetual license with support, or subscription?
Creating a master renewal calendar is very useful. Plot all contract end dates on a timeline or spreadsheet to visualize your renewal landscape. This lets you spot opportunities to align contracts and ensures no agreement (even a small one) is overlooked.
Step 2: Engage Broadcom to Align Dates
Once you have identified all your renewal positions, approach Broadcom with a plan to align these contracts to a single date.
You’ll need their cooperation to adjust terms – you can’t change end dates unilaterally. In practice, alignment is done by extending or shortening certain contracts so they co-terminate together.
Begin discussions with your Broadcom account manager well in advance of the earliest renewal date. Explain that you want to streamline everything to a common renewal date and ask what options they can offer.
Typically, two methods are used:
- Short-term extensions: If one contract expires earlier than the target date, negotiate a one-time extension (e.g., add six extra months) so it ends later. Broadcom will charge a pro-rated fee for those extra months of support.
- Early renewals: If another contract expires after the target date, renew it a bit early with a shortened term so it ends on the common date. In other words, renew that product for a partial year this cycle to bring it in line.
Expect Broadcom to charge for any such adjustment (e.g,. 6 months of added support at the current rate).
Example Scenario: Aligning VMware & Symantec Contracts
To illustrate, suppose your Symantec security software contract expires in June, while your VMware agreement runs until December. You decide to co-term them so both renew in December.
You negotiate a one-time 6-month extension on the Symantec contract instead of a full-year renewal in June. This way, Symantec’s new end date shifts to December.
Now, both contracts renew in December, and you can negotiate them together as one larger deal. This single, higher-value renewal gives you more leverage to push for better discounts than two smaller, separate renewals.
Cost & Commercial Considerations
Co-terming often involves short-term financial adjustments, so manage these proactively:
- Pro-rated fees only: Ensure any extension or gap coverage charge is purely time-based. For example, a 3-month alignment should cost approximately 1/4 of the annual rate, with no hidden surcharges or double-billing for overlapping periods.
- Leverage your consolidation: Use the fact that you’re committing to a larger combined renewal as a bargaining chip. Ask Broadcom for something in return – perhaps an extra discount on the aligned deal or added value (like a higher support tier) as a sweetener.
Negotiation Tactics for Co-Terming
When negotiating with Broadcom to co-term contracts, use strategic tactics to get the best outcome:
- Highlight mutual benefits: Position co-termination as a mutually beneficial outcome. One aligned renewal simplifies administration for both sides and strengthens the partnership. Broadcom may appreciate the efficiency of handling one large renewal instead of multiple smaller ones.
- Bundle for a discount: Clearly indicate that you’re packaging multiple contracts into one deal and expect a volume discount. A larger combined spend should qualify for better pricing, so ask for it.
- Ask for price protection: If you’re aligning contracts (or extending terms) early, request price protection in return. For example, lock in current pricing until the new renewal date or cap any increase. Ensure co-terming doesn’t trigger an earlier price hike on a product that would have come later.
- Consider an ELA: Broadcom might propose an Enterprise License Agreement (ELA) to consolidate everything into a single contract. An ELA automatically co-terminates all included products and may come with bulk discounts – just negotiate flexibility so it doesn’t turn into a lock-in.
Read about How to Negotiate True-Down Provisions in Broadcom Contracts.
Pitfalls & Watch-Outs
Be cautious of these potential pitfalls when co-terming, so you don’t give up too much:
- Overextending commitments: Don’t agree to an overly long term just to align dates. Avoid adding extra years at a high cost solely to delay the renewal. Align with your target date, but maintain normal negotiation cycles so you aren’t locked into a bad price.
- “All-or-nothing” renewals: Avoid any clause that forces you to renew all products or a minimum quantity as one bundle. Co-terming should increase flexibility, not reduce it – you want the option to drop or downsize certain products at the next renewal if needed.
- Lost flexibility on changes: If you might replace a product soon, be cautious about extending it too far. For example, don’t extend a Symantec contract by 3 years if you plan to replace that software next year. Align it for a shorter term or include an opt-out clause for that product.
Contract Language Examples
Here are a few contract clause snippets in plain English that can help with co-termination:
- Co-term new purchases: “All new licenses or support purchased will co-terminate on [Master Renewal Date], with prorated fees for any partial year.”
- Proration for extensions: “The contract for [Product] is extended by 6 months at the current monthly rate, adjusting its end date to [New Date] for alignment purposes.”
Checklist – Co-Terming Must-Dos
- Inventory all contracts: List every Broadcom contract (VMware, Symantec, CA, etc.) with its renewal date.
- Pick a master date: Decide on a target master renewal date (usually the latest current date).
- Negotiate pro-rated deals: When negotiating extensions or early renewals, double-check that any fees are truly prorated, and push back if they’re not.
- Ask for something in return: Since co-terming gives Broadcom a bigger deal, negotiate something in return – such as better pricing or extra flexibility.
- Confirm no lock-ins: Before signing the new aligned contract, remove any new restrictions or minimum commitments that could trap you later.
FAQs
Will Broadcom co-term VMware with Symantec (or other products) if asked? Yes – if you request it. Broadcom won’t volunteer, but if you push to align, say, VMware and Symantec renewal dates, they can accommodate via short extensions or a combined renewal.
What costs should I expect for a co-term extension? Expect to pay a proportional fee for any extra months added. For example, a 4-month extension should cost roughly 4/12 of the annual price. Beware of any significantly higher quote – it should be a straight prorate with no hidden surcharges.
How does co-terming improve negotiation leverage? Co-terming combines multiple small renewals into a single, larger renewal – giving you significantly more leverage. Broadcom has more revenue at stake in a single large contract, so they’re more willing to offer discounts and concessions to secure it.
5 Tactical Recommendations
- Consolidate renewals into one event: Bundle your Broadcom contract renewals into a single date. One major negotiation receives more attention and potentially better discounts than many smaller ones.
- Insist on fair prorated terms: Only pay pro-rated fees for term adjustments. Don’t accept inflated gap charges or needless fees just to align dates.
- Use alignment to get discounts: Leverage the larger combined deal to demand deeper discounts or incentives. If Broadcom is securing a larger renewal, you should receive better pricing.
- Watch for hidden lock-ins: Ensure co-terming doesn’t introduce new restrictions. Maintain flexibility to drop or change products at the next renewal if needed.
- Plan for the big renewal: With all contracts aligned on one date, prepare and negotiate aggressively. Broadcom knows your entire portfolio is on the line, which gives you maximum leverage at renewal time.
Co-terming these agreements is a strategic move to streamline management and maximize your leverage at renewal time.
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