Ensuring Flexibility in Broadcom Software Agreements

Ensuring Flexibility in Broadcom Software Agreements

Introduction:
Managing enterprise agreements with Broadcom requires a strategic, proactive approach. Broadcom has rapidly expanded its software portfolio through acquisitions of CA Technologies, Symantec Enterprise Security, and VMware, and it has a reputation for rigid contracts. These acquisitions have often been followed by shifts to subscription-only models and stricter terms, leading to higher costs and reduced customer flexibility.

Large enterprises – especially CIOs, IT leaders, and sourcing professionals – must negotiate flexibility upfront to avoid being locked into unfavorable conditions later. This article provides a Gartner-style advisory on ensuring flexibility in Broadcom agreements, covering both perpetual and subscription licensing models across Broadcom’s portfolio.

Key areas of focus include negotiating fair true-up terms (with options to true-down unused licenses), termination rights, scope reduction during the term, and license transfer rights (especially in corporate reorganizations or M&A scenarios).

Practical examples and recommendations are included to equip you with actionable insights.

Broadcom’s Evolving Licensing Model: Perpetual vs. Subscription

Broadcom’s software licensing strategy rapidly shifts from perpetual licenses to subscription models across its product lines.

Understanding this shift is critical:

• Perpetual Licensing (Legacy Model): Previously, products from CA or Symantec were often sold as perpetual licenses with annual support. If you owned a perpetual license, you had indefinite usage rights to that software version. However, Broadcom has largely eliminated new perpetual sales in favor of subscriptions. For example, Symantec customers found that they could no longer renew maintenance on legacy perpetual licenses – they were essentially forced to convert to annual subscriptions to continue receiving updates and support (losing support if they didn’t)※. Similarly, Broadcom ended VMware perpetual licensing in 2024, requiring customers to move to recurring subscriptions for ongoing support.
• Subscription Licensing (Current Model): Under Broadcom, software like VMware and Symantec is now offered via subscription-only models. This means you pay recurring (often multi-year) fees and must stay subscribed to retain support and the right to use the latest versions. Broadcom’s subscriptions often use new metrics (for instance, VMware moved from per-CPU to per-core licensing with high minimums) and enforce stricter compliance. While subscriptions provide up-to-date access, they bind customers to term commitments – once the term ends (or if you stop paying), your rights to upgrades and possibly usage can cease. This shift gives Broadcom more predictable revenue but can reduce customer flexibility, especially if needs change mid-term.

Implications: Whether you have legacy perpetual entitlements or new subscriptions, plan your negotiation strategy accordingly:

• If you still hold perpetual licenses, leverage them carefully. Broadcom will honor your right to use them, but you won’t get updates or fixes without an active support contract. Broadcom has even refused to renew support for some perpetual licenses (instead insisting on a subscription conversion). Ensure any agreement to transition to a subscription does not inadvertently void your perpetual rights unless you’re certain you won’t need them as a fallback. Keep documentation of those entitlements and consider retaining the right to use older versions as a safety net.
• If you’re entering a Broadcom subscription, recognize that you are committing to continuous payments and that flexibility must be built into the contract. Without negotiated clauses, you typically cannot reduce quantities or easily exit early. Budget for subscription fees as operational expenses and seek terms that allow adjustments over time.

Many enterprises will have a mix of legacy licenses and new subscriptions during the transition. In all cases, anticipate Broadcom’s stance: the company is known for tough negotiations and high renewal increases.

Gartner analysts observed that after Broadcom’s acquisitions of CA (2018) and Symantec (2019), customers reported dramatic price hikes at renewal with very limited flexibility in negotiations – a warning sign for VMware clients.

The lesson is clear: you could be stuck with rigid, costly terms without proactive negotiation. The following sections outline how to negotiate critical contract clauses to preserve your flexibility.

Negotiating Fair True-Up Terms (and True-Downs)

The Challenge:

Broadcom agreements often include volume or usage commitments that favor the vendor. Broadcom expects a true-up if you exceed licensed quantities (purchasing the overused licenses, sometimes with back fees).

However, contracts usually don’t allow any true-down – you can’t return or reduce licenses if you bought too many. This one-way flexibility means you pay for overages but rarely get credit for under-utilization. Over a multi-year term, your needs might drop due to business changes, divestitures, or efficiency gains, leaving you with shelfware (unused licenses) that still incur costs.

Negotiation Strategies for True-Ups:

• Predefine True-Up Windows: Aim to include scheduled true-up periods (e.g., annually or quarterly) rather than continuous monitoring with immediate penalties. For example, negotiate that any usage above your licensed amount will be reconciled only at the end of the year. This gives you time to adjust usage and budget for any necessary purchase rather than facing surprise bills. A defined true-up window smooths out short-term spikes – if usage temporarily exceeds and falls below entitlement within the period, you might avoid needless costs.
• Lock-in Unit Pricing: Insist on pre-negotiated pricing for additional licenses purchased during the term. Broadcom’s standard approach may charge a list price (or a high, undiscounted rate) for mid-term additions, which is costly. You want any true-up licenses priced at the same discounted rate as your initial purchase (or a fixed unit price). For instance, if you negotiated $50 per user for the initial 10,000 users, additional users added mid-term should also cost $50 each, not $80 at Broadcom’s discretion. Locking this in prevents a “bait-and-switch” where you get a good initial discount but pay dearly for growth.
• Include a Usage Buffer: Ask for a small usage allowance above your licensed quantities that won’t trigger an immediate true-up. While Broadcom is strict, large enterprises sometimes get a clause like “up to 5% over-license usage is permitted and will be true-up at renewal without penalty.” This acts as a buffer for minor variations. For example, if you have 1,000 licenses and temporarily need 1,030, you wouldn’t be in automatic breach as long as you true-up at the next interval. Such buffers are uncommon but worth pursuing for flexibility.
• Right-Size Commitments: Be wary of Broadcom pushing large upfront commitments “for a better discount.” It’s usually better to commit close to your current needs and then scale up if needed, rather than overbuying licenses you might not use. For instance, if you currently need 8,000 users but Broadcom offers a discount if you commit to 10,000, the savings often won’t justify paying for 2,000 extra licenses that may sit unused. Negotiate reasonable minimums that match your actual deployment, with the ability to purchase more later at the same rate (as above). This avoids paying 20% more to save 5% – a false economy.

Strategies for True-Down and Downsizing:

• Use Renewal as a True-Down Point: In many cases, you won’t succeed in getting mid-term reductions (Broadcom rarely allows reducing license counts during an active term). However, treat each renewal as a true-down opportunity. Plan ahead to drop unused licenses or subscriptions when your contract term ends. Broadcom’s sales teams won’t volunteer this, but you have the right not to renew licenses you no longer need. Conduct an internal usage audit before renewal to identify shelfware and be prepared to scale down your renewal quantities. This way, you’re not carrying over excess capacity into the next term.
• Negotiate Mid-Term Adjustment Options: You might negotiate a one-time mid-term reduction clause for very large or strategic deals. For example, in a 3-year agreement, try to insert a clause that at the mid-point (end of year 1 or 2), you can reduce licenses by up to a certain percentage (say 10-15%) without penalty if business conditions change. Broadcom may resist, but framing it with specific triggers can help – e.g., “If we divest a division or move workloads off VMware to the cloud, we may reduce up to 500 licenses.” Even if Broadcom won’t agree to an unconditional true-down, they might concede a more limited scope reduction (we’ll cover scope changes more below). It never hurts to ask, especially if you’re making a large, multi-product commitment.
• Avoid Overage Penalties: Scrutinize the contract for any punitive true-up terms. Some Broadcom contracts might state that if an audit finds you over-deployed, you owe backdated fees or penalties (e.g., maintenance for the period of unlicensed use, plus a fine). These terms can be very harsh. Push to convert penalties into standard true-ups – meaning you simply buy the extra licenses as we advance, without retroactive fees. For instance, negotiate that if an overage is discovered, you will purchase the licenses needed at the regular rate effective on discovery (not pay years of back-maintenance). The goal is to remove or soften any retroactive punishments and treat overuse as a normal sale, not a breach. Clear, fair, true-up terms will save you from nasty surprises if a compliance issue occurs.

Example:

A global enterprise negotiated an annual true-up with pre-set pricing in its Broadcom agreement. Midway through the year, they realized a new project caused them to exceed VMware licenses by 8%. Thanks to the contract terms, they weren’t in immediate violation.

They reduced some usage to fall within the 5% buffer and budgeted to purchase the remaining 3% overage at year-end at the original discounted rate. They also planned to drop a different product that was underused at renewal.

This flexibility saved them significant costs compared to a standard contract, under which they would have paid the list price for overage and received no credit for unused licenses.

Scope Reduction and Mid-Term Flexibility

The Challenge:

Broadcom’s standard contracts usually lock in the scope of products and quantities for the full term. If your business shrinks, reorganizes, or if certain software modules become obsolete, you’re typically stuck with the original scope, paying for it even if you no longer need it. Unlike some more flexible vendors, Broadcom doesn’t readily allow you to remove a product from the agreement or reduce volumes mid-term.

This is especially problematic in multi-year, multi-product enterprise agreements, where needs can evolve. You want the ability to adjust the scope during the term to avoid paying for shelfware or irrelevant software.

Negotiation Strategies for Scope Reduction:

• Include a “Step-Down” Clause: As mentioned in the true-down discussion, try to build in a step-up/step-down option. This clause would allow a one-time adjustment of license volumes (up or down) at a specific point, such as an annual anniversary. For example, “At the end of Year 2, Customer may reduce the number of licenses by up to 10% or reallocate that spend to other Broadcom products, without penalty.” This kind of clause gives you an outlet if you over-provisioned or if a business change (like layoffs or divestiture) means fewer users. Even a 10% flexibility can make a big difference. Be sure to specify any financial adjustments (e.g., reduced fees in proportion) to clarify how the step-down works in practice.
• Partial Termination Rights: If full termination for convenience is off the table (we address termination next), consider negotiating partial termination or partial scope exit rights. For instance, you could seek the right to terminate a specific product or a specific set of licenses after a certain date. Maybe you sign a broad 5-product deal but suspect one product might be phased out in your environment – request a clause allowing you to discontinue that one product’s licenses after 12 or 24 months. You might offer to provide notice and/or forfeit support on those licenses, etc. The idea is not to be forced to keep paying for a component you know you won’t use. Broadcom might agree if it’s limited in scope and if you make a strong business case.
• Product Swaps or Substitutions: Given Broadcom’s habit of reshuffling its portfolio (for example, merging or discontinuing products post-acquisition), negotiate product substitution rights. If a product you’re using is discontinued or significantly changed, you can swap your licenses for an equivalent product. For example, suppose Broadcom merges Product A into Product B. In that case, you should be allowed to transfer your investment into Product B (or another Broadcom product of similar value) without buying from scratch. Even in cases where your needs change, you might ask for the ability to swap out one product for another in Broadcom’s catalog of equal value during the term. This isn’t standard, but it addresses the risk of product obsolescence and gives you some functional flexibility (e.g., switch from a Broadcom on-premise security product to their cloud security product if you shift strategy).
• Co-Termination and Modular Structure: Structure your agreement such that products have aligned co-termination dates but are modular. If Broadcom insists on bundling multiple software titles in one contract, ensure co-termination (all end simultaneously), but try to allow each to be renewed or dropped independently at that time. This way, you could drop one product at renewal while renewing others. Broadcom likes to sell a big bundle, but you can request language that says each product’s renewal is optional at the end of the term. If they resist, at least avoid contractual language that commits you to renew everything together – maintain the freedom to say “no” to pieces you don’t want later.

Example:

A financial services firm included a clause in their 3-year Broadcom enterprise agreement allowing them to eliminate up to 15% of unused licenses across the board in year 3 if they had undergone a merger or downsizing.

In year 2, the firm sold off a business unit, which meant 500 Symantec endpoint security licenses were no longer needed. Thanks to the negotiated clause, they notified Broadcom and were able to remove those 500 licenses from the contract in the final year, reducing the fee owed.

In exchange, Broadcom had required a 90-day notice and a certification of the divestiture event, but ultimately, the client avoided paying for hundreds of licenses that would have otherwise sat idle. Without such a clause, the firm would have paid for the full 3-year term for a business unit it no longer owned.

Termination and Exit Rights

The Challenge:

Broadcom’s standard contracts typically allow termination only for breach or non-payment – there is no termination for convenience in most vendor-favored agreements. Once you sign a 3-year or 5-year deal, you are locked in for the duration, regardless of whether your needs change or Broadcom’s unsatisfactory performance.

This lack of exit options is risky: if Broadcom dramatically raises prices, if their product quality drops, or if your company undergoes a strategic shift (e.g., migrating off VMware), you have no legal way out without paying the full term.

Negotiating termination rights (even limited ones) is critical to retain leverage and avoid feeling hostage to the contract.

Negotiation Strategies for Termination Rights:

• Termination for Convenience (Ideally): It may seem ambitious, but ask for a termination for convenience clause. This would allow you to terminate the agreement (in whole or part) for any reason with a certain notice period (e.g., 60 or 90 days). Vendors, especially Broadcom, rarely agree to pure convenience termination without some conditions or fees, but putting it on the table signals that flexibility is a priority. If Broadcom pushes back, you might propose a buy-out fee or notice period as a compromise (for example, “customer may terminate early by paying 6 months of fees” or similar). Even if this isn’t granted, the discussion can sometimes lead to alternative safeguards like shorter-term lengths or specific exit triggers.
• Mid-Term “Break” Clauses: Consider a mid-term break clause if a broad convenience termination isn’t possible. This could be an option to exit at a defined milestone – for example, at the 24-month mark of a 5-year deal – without cause. Think of it as an escape hatch you can choose to exercise. You might negotiate that you can cancel the remaining term if you give 3 months’ notice at that mid-point. Broadcom might insist on this applying only to certain products or a portion of the contract. Still, having a pre-agreed exit window can protect you if things go awry. It also psychologically reminds Broadcom that you have a choice, which can keep them more customer-focused. Important: If you secure such a clause, clarify any penalties or pro-rated refunds (e.g., will you get credit for prepaid amounts for unused months, or owe a termination fee). Make sure the process to invoke it is clearly described.
• Termination for Specific Causes: At minimum, negotiate expanded “for cause” termination rights beyond the standard material breach. Some scenarios to consider:
  • Performance Failure: Include a clause that you can terminate or receive service credits if Broadcom fails to meet certain support service levels or if the software does not perform as promised over a sustained period. For example, “if critical support tickets remain unresolved beyond X days three times in a quarter, the customer may terminate affected products for cause.” This holds Broadcom accountable.
  • Product Discontinuation: If Broadcom end-of-lives a product you’re using (or significantly degrades it), you should have the right to cancel and potentially get a refund for the unused term. Otherwise, you’re paying for a dead product. Tying this to a product substitution right (discussed above) is even better – either switch to a successor product or terminate for a refund.
  • Adverse Legal/Regulatory Event: If new laws or regulations (data residency, security, etc.) would make continued use of the software illegal or very risky, termination should be allowed. This is a rare scenario, but it can be mentioned (e.g., if an encryption product no longer meets updated standards).
  • Change of Control (Vendor Side): While rare, you might ask for the right to terminate if Broadcom itself is acquired by another company you deem problematic. Given Broadcom’s acquisitions, this may not fly, but some customers worry about being handed off to another unknown entity.
• Avoid Automatic Renewals: Ensure the contract doesn’t auto-renew for an extra term without explicit agreement. Broadcom sometimes includes clauses where, if you don’t give notice 60-90 days before expiration, your support or subscription auto-extends for a year (often with a price increase). Negotiate that renewal must be mutual, or at least that any auto-renew comes with the same terms (no hidden hike) and can be terminated with short notice. Always calendar the notice deadline for any renewal or termination notice so you don’t accidentally get locked in. For flexibility, removing auto-renew clauses entirely is safer, forcing a fresh negotiation at term end where you have leverage.

Using Leverage: Broadcom might claim that multi-year commitments cannot be terminated early because they give you a big discount. If you can’t get a termination clause, consider balancing it with a shorter contract term or a phased commitment.

For example, rather than a 5-year lock-in with no exit, maybe agree to a 3-year lock-in with an option to extend to 5 at the same pricing. This way, you aren’t tied up as long. Remember that longer terms benefit Broadcom (predictable revenue) but reduce your flexibility. Only commit long-term if you have sufficient protections.

Gartner warns that committing to a lengthy deal without exit ramps is risky. If Broadcom’s or your strategy changes, “you’re stuck” with no recourse. It’s often better to trade a bit of discount for a more flexible arrangement.

Example:

A Fortune 500 company negotiated a termination-for-convenience clause in a limited form: they agreed to a three-year deal but with the right to terminate after 18 months for convenience on one major product (VMware Cloud Management) if their planned cloud migration eliminated the need.

They had to give 60 days’ notice and forfeit a pre-agreed portion of the fees (effectively an early termination penalty of 20% of the remaining value). This was not a standard term, but because the deal was large and that particular product was uncertain for the customer, Broadcom conceded.

If the company did decided to drop that product after year 1.5 and paid the penalty to exit – this saved them nearly $2 million versus continuing to pay for a tool they no longer needed. Without that negotiated clause, they could not get out of the commitment.

License Transfer Rights and M&A Considerations

The Challenge: Large enterprises frequently undergo organizational changes – mergers, acquisitions, divestitures, or internal reorganizations. Broadcom’s out-of-the-box license agreements often have strict assignment and transfer restrictions.

You cannot transfer licenses to another entity without Broadcom’s consent. If a competitor of Broadcom acquires your company, Broadcom might even have the right to terminate the license.

This rigidity can be disastrous in M&A situations: you might have to double-pay for licenses or lose rights entirely when companies combine or split. Sourcing professionals must negotiate clear rights to transfer or assign licenses within a corporate group and during corporate transactions to avoid being trapped or incurring huge new costs.

Negotiation Strategies for Transfer and M&A Flexibility:

• Broad Affiliate Usage Rights: Ensure the contract defines “Customer” to include your entire corporate family (parent, subsidiaries, affiliates under your control). The goal is to have licenses be usable by any affiliate within your organization. For example, if one subsidiary originally purchased the licenses but another division needs them, you should be allowed to reallocate them internally. Negotiate a clause permitting transferring licenses or subscriptions among wholly-owned affiliates without additional consent. This prevents scenarios where one department is over-licensed while another is under-licensed, but you can’t reassign the excess. Broadcom should acknowledge that your company is one enterprise customer, regardless of internal structure.
• Post-Merger License Consolidation: If your company acquires another company, you’ll want to bring any Broadcom software the acquired entity has under your umbrella. Negotiate an agreement to merge license entitlements or at least co-term, and add the acquired entity to your agreement. Even better, you might pre-negotiate pricing for adding users from an acquisition. For instance, a clause could state, “If Customer acquires an entity using Broadcom products, those licenses can be transferred under Customer’s agreement, and any additional licenses needed will be priced at the same discount level as this agreement.” This way, you won’t be forced to maintain two separate contracts (losing volume discounts) or pay the list price to expand. It also protects against Broadcom leveraging the acquisition to charge more.
• Divestiture and Spin-off Protections: If your company divests a business unit or spins off a part of the company, address how licenses will be handled. Ideally, negotiate the right to transfer licenses to the new entity, leaving so the spun-off business can continue using the software (perhaps for a limited time or under a copy of your agreement). Alternatively, negotiate the right to terminate licenses attributable to that divested unit and get a fee reduction. For example, “if Customer divests a division using 1,000 licenses, Customer may remove those 1,000 licenses from the agreement (or assign them to the divested entity) upon 30 days’ notice, with fees reduced accordingly.” Broadcom might charge a small administrative fee for transfer, but you want the option. This prevents you from paying for licenses that a now-unrelated entity is using or that aren’t needed after the divestiture.
• Change of Control Clauses: Check for any change-of-control restrictions in Broadcom’s terms. Sometimes, vendors include a clause that if the customer is acquired by a specific type of company (e.g., a competitor), the vendor can terminate the contract or require consent to continue. Negotiate neutral language here: for example, that any change in ownership of your company will not alone cause termination of the licenses. You can also seek to pre-approve certain scenarios, such as if your company splits into two, both resulting entities should retain the right to use the software. The key is eliminating Broadcom’s ability to yank your licenses or jack up fees simply because your corporate structure changed. As long as the software isn’t given to a direct competitor to operate (a unique scenario), Broadcom should be willing to allow the licenses to survive corporate changes.
• Documentation and Process: If Broadcom agrees to transfer or assign rights, document the process. For instance, you may need to notify Broadcom of the transfer in writing, and the new entity may need to agree to the license terms. That’s fine, as long as the right to do so is already granted in the contract. Broadcom can deny requests or demand new license purchases in an M&A event without explicit permission when you have little leverage. Plan ahead for these possibilities, especially if you’re aware of likely M&A activity on your horizon.

Example:

A large manufacturing conglomerate negotiated robust transfer rights in its Broadcom (CA software) agreement. During the contract, the conglomerate spun off one of its business units into an independent company. Because of the negotiated clause, the company was allowed to assign a subset of its CA licenses to the new spinoff entity so that the new company could continue operations without disruption.

Broadcom required that the spinoff sign a one-page assumption agreement (to abide by the original license terms) but did not charge any new license fees. This saved the spinoff from buying all new licenses and avoided a major cost that could have jeopardized the deal’s value.

In another case, when the same conglomerate later acquired a smaller firm that also used Symantec (Broadcom) security software, they could consolidate the smaller firm’s licenses into their master agreement at the next true-up, benefiting from their larger discount. These outcomes were possible only because transfer and assignment had been addressed upfront.

Working with Independent Licensing Experts

Broadcom is a formidable negotiator with a well-oiled sales machine. Consider engaging independent licensing experts to support your negotiation and level the playing field.

Unlike Broadcom or its resellers, independent advisors work solely in your interest and can identify contractual pitfalls that busy in-house teams might miss. Firms such as Redress Compliance specialize in licensing Broadcom (and its acquired products).

They bring deep knowledge of Broadcom’s typical contract terms and negotiation tactics, having seen possible concessions. An independent expert can:

• Benchmark and Strategy: Compare what other enterprises have achieved regarding discounts and flex clauses, helping you set realistic targets. They can craft a negotiation strategy that prioritizes your business’s most critical flexibility terms (for example, an expert might help you justify a termination clause by quantifying risk or find the right wording for a true-down option).
• Contract Review: Analyze Broadcom’s proposed terms line-by-line to flag any language that limits flexibility – e.g., hidden lock-in clauses, onerous audit rights, or lack of assignment rights. They often know the “gotchas” in Broadcom contracts (like uncapped support fee increases or strict notice requirements) and can recommend alternate wording. Bringing an expert into contract redlines can significantly improve the final terms.
• Negotiation Support: Act as an advocate in discussions or behind the scenes. Broadcom’s negotiators do this daily; having someone who speaks their language can counter vendor assertions that “nobody else has ever gotten this clause” or “this is non-negotiable.” Independent licensing consultants have seen many clients push back on Broadcom successfully, and they can give you the confidence and data points to do the same. Even Gartner notes that clients should not simply accept vendor boilerplate, and having knowledgeable advisors strengthens your position.
• Audit and Compliance Insight: Given Broadcom’s active audit posture (especially with clients on perpetual licenses), an independent expert can also guide you on compliance. They can ensure that any flexibility you gain (like true-up windows or transfer rights) is implemented correctly and that you remain compliant to avoid giving Broadcom excuses to penalize you later.

Why not rely on Broadcom or their partners?

Broadcom’s account teams and authorized partners are ultimately aligned with Broadcom’s sales objectives.

They may offer helpful information, but they are not incentivized to maximize flexibility for the customer – their goal is to close the deal, often on Broadcom’s standard terms.

In contrast, an independent advisor has no conflict of interest; their successful outcome measures their success. In high-stakes agreements involving millions of dollars and mission-critical software, the cost of a third-party expert is often negligible compared to the savings and risk mitigation they can enable.

Recommendations

Preparation and foresight are your best weapons when negotiating a Broadcom software agreement.

Here are clear, actionable steps for sourcing and IT leaders to ensure flexibility and protect your organization’s interests:

1. Start Early and Assess Needs: Begin the renewal or negotiation process 12–18 months in advance. Form an internal team (IT, procurement, finance, legal) to review current usage, entitlements, and business forecasts. Determine your ideal future state – which products you need, in what quantities, and where you may have excess. Early planning prevents last-minute pressure (Broadcom is known to use time pressure to its advantage) and gives you time to evaluate alternatives for leverage.
2. Identify Flexibility Must-Haves: Create a negotiation term sheet focusing on flexibility clauses. List the top terms you need (e.g., true-up/true-down rights, termination options, transfer rights, etc.) and draft your preferred contract language for each. Having this clarity upfront lets you introduce these requirements early in talks. Provide this term sheet to Broadcom and explain that these terms are as important as pricing to your decision. It sets the expectation that the deal isn’t just about dollars – it’s about risk management, too.
3. Engage Legal and Expert Support: Involve your legal counsel early to vet Broadcom’s proposed master agreement and to help insert protective language. Additionally, engage an independent licensing expert (such as Redress Compliance or similar) to review terms and advise on negotiation strategy. These experts can often foresee Broadcom’s counter-arguments and know alternative compromises that have worked for other clients. Their insight will bolster your negotiating position and ensure you’re not missing any hidden constraints.
4. Leverage Competition and Alternatives: Even if you intend to stay with Broadcom’s products, maintain the appearance of considering alternatives. Internally identify which workloads or software could be moved off Broadcom if needed (your “exit plan”). If Broadcom senses you have no choice, they won’t budge on terms. By contrast, if you can credibly evaluate moving to another vendor (for example, considering alternate security software in place of Symantec or cloud-native tools instead of certain VMware components), Broadcom will be more inclined to offer concessions to keep your business. Use this leverage to negotiate better terms, like the flexibility clauses you want, not just better pricing.
5. Negotiate Financial Safeguards: Tie financial terms to flexibility where possible. For instance, if you agree to a multi-year prepaid subscription, try to negotiate a partial refund or credit if you terminate early for convenience. Or negotiate price caps on renewals – if you sign a longer term, cap the annual maintenance or subscription increase (e.g., “fees shall not increase by more than 3% annually”). This protects you from unwarranted cost spikes and makes it easier to walk away at renewal if Broadcom won’t offer fair pricing.
6. Document Everything: During negotiations, if Broadcom sales reps make any promises (for example, “You can probably reduce users next year if needed” or “We’ll work with you if you acquire a company”), do not rely on verbal assurances. Get every concession or clarification in writing, ideally in the contract or an addendum. If a particular flexibility is agreed on as an exception, ensure the contract is amended to reflect it. A best practice is to include an exhibit or addendum listing all negotiated deviations from standard terms so nothing is forgotten. This avoids disputes later when personnel changes or memories fade.
7. Plan for Ongoing Management: Once the agreement is signed, don’t set it and forget it. Assign an owner (or governance committee) to monitor compliance and usage continuously. Track your license consumption against the contract limits to anticipate true-ups or identify under-use. Keep a calendar of critical dates (notice periods for termination or renewal, true-up due dates, etc.). By actively managing the contract, you can effectively exercise your negotiated flexibility options. For example, if you negotiated a mid-term reduction option, you’ll need to proactively trigger it by the deadline with proper notice – don’t miss that window. Similarly, prepare for renewal well in advance, using your flexibility (like dropping unused licenses or renegotiating terms) to optimize the next cycle.
8. Maintain Executive Engagement: Keep CIOs, CFOs, and other executives in the loop throughout this process. Broadcom tends to pay more attention when higher-ups are involved. Executive support can be leveraged to escalate requests for flexibility (e.g., a CIO-to-CIO conversation about a needed contract exception can carry weight). Also, your leadership should be aware of worst-case outcomes, such as the cost implications if flexibility isn’t achieved, so they support tough negotiation stances. If you’ve documented how a lack of termination rights could cost millions in a downside scenario, executives are more likely to back a hard line with Broadcom.

By following these steps, you can significantly improve the flexibility of your Broadcom agreements and avoid common pitfalls.

The key is negotiating with foresight – anticipate how your needs or Broadcom’s policies might change and build contractual options to adapt. Enterprises that secure such terms can work with Broadcom’s software on their terms rather than Broadcom’s and pivot when needed without severe penalty.