Multi-Product Negotiation Strategy with Broadcom
Executive Summary
- Complex Portfolio, Tough Negotiations: Broadcom’s software portfolio spans VMware, Symantec, CA, and more—each with its own licensing model. Broadcom’s post-acquisition stance is famously rigid, characterized by high prices, fixed bundles, and required multi-year contracts. This raises the risk of overspending and paying for unused “shelfware.”
- Strategic Opportunity of Bundling: By bundling Broadcom products into one deal, you unlock larger discounts and credits that siloed renewals cannot obtain. One negotiation covering virtualization, security, and other aspects makes Broadcom consider the entire package, which can drive down the overall cost.
- Driving ROI and Compliance: A multi-product negotiation strategy ensures you pay only for software that delivers real business value. It reduces spending on unused legacy components and adds protections, such as price caps or downgrade rights, to safeguard your budget.
This reduces audit and compliance risk by ensuring licenses match actual usage. - Real-World Example: A global finance firm bundled its outdated CA backup licenses with its VMware renewal.
By negotiating them together, the CIO compelled Broadcom to offer a bulk discount and credit unused maintenance fees toward the critical VMware suite—saving millions and eliminating redundant licenses.
For the complete guide, read Broadcom Negotiation Tactics: Pricing, Discounts, and Leverage Strategies.
Things to Do
- Conduct a Thorough License Audit: Take stock of all Broadcom software licenses (VMware, Symantec, CA, etc.) well in advance of renewal. Compare current usage against entitlements (e.g., CPU cores or user counts). Flag any idle or underused licenses that you can eliminate ahead of negotiations. Example: One manufacturing CIO discovered 20% of their Broadcom spend went to unused software. They cut those licenses before renewal and redirected the savings to negotiate better pricing on the remaining Broadcom products.
- Engage Licensing Experts: Consult an independent software licensing expert (e.g., Redress Compliance) to review your contracts and pricing. These advisors understand Broadcom’s tactics and can identify hidden pitfalls or opportunities—such as misapplied metrics or unused support credits—that your team might overlook. Example: With expert help, one company discovered that Broadcom had incorrectly enforced a 72-core minimum on several servers. Once they demonstrated actual usage, their advisor renegotiated that metric and significantly reduced Broadcom’s proposed fees.
- Align Stakeholders and Set Priorities: Get IT, finance, legal, and business leaders to agree on which products are mission-critical. Set a clear budget cap (and a walk-away threshold) for the renewal. This united front prevents scope creep and keeps negotiation targets realistic. Example: One retailer’s procurement team formed a licensing steering committee. The committee identified only the Broadcom products essential for the business, avoiding pricey add-ons. Armed with a strict “must-have” list, they refused to pay for any unneeded modules.
- Aggregate and Co-Term Renewals: Align contract end dates and combine renewal negotiations whenever possible. One big renewal (spanning multiple products or divisions) gives you far more leverage than many small, separate deals.
Co-term all products to show Broadcom the full enterprise value of your account. This approach often unlocks deeper discounts and higher-volume pricing tiers. Example: A global bank synced the renewal dates for its virtualization, security, and database software. By bringing them to Broadcom as a single combined renewal, the bank secured a significantly larger enterprise discount than would have been possible by negotiating each product separately. - Leverage Trade-Ins and Perpetual Credits: Take advantage of any perpetual-to-subscription trade-in offers and any unused maintenance pre-payments as bargaining chips. Insist that Broadcom carry forward the value of your prepaid support or convert your perpetual licenses at a steep discount. Example: A tech company had already paid for multi-year support on its CA software through the end of the year.
When Broadcom pressed for an early switch to subscriptions, the CIO demanded a prorated credit for the unused support or a 50% discount on conversion. This way, they didn’t forfeit their prior investment. - Prepare Plan B (Alternative Solutions): Identify cloud or third-party alternatives for critical Broadcom products. You don’t have to switch immediately, but showing viable options strengthens your position. Let Broadcom know you’re exploring other paths (even if only for smaller workloads) to gain leverage. Example: A CISO informed Broadcom’s rep that their team was testing a competing hypervisor and new cloud-based security tools. That pressure made Broadcom more willing to bend on pricing and bundle terms to keep the customer’s business.
- Start Early and Control the Timeline: Begin renewal discussions 4–6 months prior to your contract expiration. Don’t allow Broadcom to hit you with a last-minute quote and a 20% late-renewal penalty.
Set meetings well ahead of deadlines, and escalate internally if Broadcom’s response is slow. Engaging early gives you time for multiple negotiation rounds and helps you avoid panic renewals. Example: An energy utility scheduled its Broadcom renewal talks six months early.
When the sales representative dragged his feet on providing a quote, the IT director escalated the matter to Broadcom’s account manager. That step kept everything on track and prevented last-minute price hikes. - Secure Contract Protections: When negotiating, stand firm on protections you consider non-negotiable. These should include caps on annual price increases or fixed multi-year rates, clauses to downsize or drop unused modules, and clear audit limits.
For example, negotiate the right to reduce license counts at renewal if usage drops, and insist on reasonable notice periods to avoid surprise audits. Example: A healthcare CIO added contract language capping annual increases at 5% and allowing license reductions at each anniversary. Later, when one Broadcom bundle was pared down, they weren’t hit with a full-price renewal for the licenses they dropped.
Broadcom plays hardball, Countering Broadcom’s “Take-It-Or-Leave-It” Stance.
What to Think About
- Product Relevance and Lifecycle: Take a hard look at each Broadcom product’s role. Does it align with your future IT strategy (e.g., cloud migration), or is it a legacy tool on its way out?
Avoid committing to long-term deals for products nearing the end of their life or replacement. Be prepared to discard outdated modules, even if Broadcom offers them as part of a bundle. Example: One university realized its on-premises Symantec archiving product was obsolete. They negotiated it out of the bundle and redirected that budget to strengthen their VMware licensing instead of paying for a tool slated for retirement. - Bundling Risks vs Rewards: Bundling products can yield high-volume discounts, but it can also make you pay for software you don’t need. Scrutinize any bundle offer carefully.
If Broadcom pushes an all-in-one suite, negotiate a price cut for components you won’t use or demand a tailored package. Ensure the final bundle meets your exact needs. Example: A media company was offered an “all-in-one” suite that included a niche analytics tool they didn’t need. They pressed Broadcom to remove that component or reduce the bundle price. This prevented them from paying for shelfware hidden in the deal. - Internal Alignment on Value: Ensure that IT goals (features, performance) and financial goals (cost and budget) are aligned internally. Procurement must know which licenses truly drive business value.
This way, your team won’t be divided over whether a bundle is worth the price. Be explicit about trade-offs—if you include X, you may need to justify or cut Y elsewhere. Example: At one global bank, the CIO and CFO co-authored a renewal strategy document. They prioritized only high-impact products and provided clear justification for each. That united stance kept Broadcom’s sales team from upselling unnecessary modules during negotiations. - Budget Predictability vs. Flexibility: Multi-year contracts can stabilize pricing, but also lock you in. Weigh the benefit of capped price increases against the need for flexibility (like scaling down or moving workloads to the cloud). Determine how much lock-in risk you can tolerate. Example: A healthcare provider locked in costs by signing a three-year Broadcom deal for core virtualization but chose one-year terms for secondary tools. This hybrid strategy secured good rates on essential systems while keeping them nimble on less-critical software.
- License Metrics and Sizing: Broadcom often changes its licensing metrics (e.g., switching VMware from per-CPU to per-core with high minimums).
Before negotiations, optimize your environment: consolidate servers, retire idle VMs, and eliminate CPU fragmentation. Enter talks with a lean configuration so you can negotiate from a position of strength. Example: An insurance company consolidated fifteen 8-core servers into larger hosts to meet Broadcom’s 72-core minimum. By reducing the total counted cores, they lowered the number of licenses needed and directly cut their renewal costs. - Vendor Support and Third-Party Options: Broadcom’s support quality may not meet your expectations. Determine whether the deal offers sufficient support levels or if a third-party support provider might be a more suitable long-term option.
Use third-party support quotes as leverage in talks (for example, hint that “we could shift off Broadcom support if these costs don’t make sense”). Example: A tech firm budgeted for Broadcom’s premium support but made Broadcom commit to maintaining that SLA quality in writing. At the same time, they got a quote from an independent support vendor as a fallback—signaling to Broadcom that alternatives were on the table. - Leverage Channels: Consider negotiating through a top-tier Broadcom reseller or managed service provider. Elite partners often have promotions or bundle deals that can lower your costs or add value (like training or consulting).
They can also use their clout with Broadcom or structure a managed services arrangement that includes your Broadcom licensing. Example: A logistics company worked with a Broadcom Platinum partner for its VMware renewal.
That partner bundled the VMware licenses with managed services, leading to a lower overall cost and even free training for the IT staff—perks the firm could not have obtained on its own.
Read about how to secure concessions and discounts with Broadcom.
Practical Impact
- Pricing: A multi-product negotiation can dramatically cut your overall spend. Bundling licenses often unlocks high-volume discounts and trade-in credits. Signing multi-year deals with price caps stabilizes your budget and helps shield you from annual price hikes.
However, Broadcom’s initial quote will likely be steep—you’ll need to push hard for discounts and credits. If you have existing perpetual licenses, use them as bargaining chips to convert sunk costs into savings. - Compliance and Risk: Thorough preparation greatly reduces audit exposure. Match your purchases to actual usage and document all entitlements to avoid surprises in a Broadcom audit.
Consolidating products into a single deal can simplify vendor management; however, you must still closely track the usage of each individual product. If you remove or swap licenses, ensure the contract reflects those changes.
Negotiating flexible terms—such as downsizing rights and no-surprise audit clauses—directly reduces future compliance risk. - Long-Term Value: Concentrate your budget on mission-critical software to maximize ROI. Agreements covering just the modules you actually use (while cutting out unused products) ensure each dollar delivers value.
Including commitments such as service-level guarantees, upgrade rights, or perpetual use clauses can extend the long-term value of your investment. Multi-year contracts with locked pricing also make financial planning easier by providing cost certainty.
The trade-off is less flexibility, so negotiate exit clauses and downsizing options in the contract to protect your future choices. - Outcome Example: One enterprise executed this strategy and secured a multi-year license that included only the Broadcom products it truly needed. They capped annual price increases at 3%, traded in obsolete licenses for credits, and documented every perk they negotiated (like free training and premium support).
The result was lower ongoing costs, fewer license audits, and guaranteed value from each product—greatly improving the deal’s long-term return.
Summary of Source Insights:
Industry analysts note that Broadcom often imposes stricter terms and higher prices after major acquisitions. Customers who succeed in Broadcom negotiations tend to audit their usage rigorously, negotiate across Broadcom’s portfolio, and insist on key contractual safeguards.
Independent advisors find that multi-product deals can unlock better pricing tiers and credits, but CIOs must resist “take-it-or-leave-it” bundle offers by demanding tailored packages.
In short, a well-prepared, unified multi-product renewal strategy can turn a tough Broadcom negotiation into a value-generating outcome.
Read about our Broadcom Negotiation Service.
Broadcom Negotiation Tactics: Pricing, Discounts & Leverage Strategies
