Negotiating a VMware Enterprise Agreement Under Broadcom – Strategies for Buyers

Negotiating a VMware Enterprise Agreement Under Broadcom

Introduction: Broadcom’s acquisition of VMware has significantly impacted the negotiation of VMware Enterprise License Agreements (ELAs). Buyers who were comfortable with VMware’s old, more flexible approach are now facing a very different playbook.

Prices are rising, terms are stricter, and the risk of vendor lock-in is higher than ever. In this new landscape, CIOs and procurement leaders must negotiate more effectively and assertively to avoid skyrocketing costs and shelfware.

The goal of this post is to arm you with strategies to secure a fair VMware ELA despite Broadcom’s hard-nosed tactics. Read our comprehensive guide to Broadcom Enterprise License Agreements (ELA/PLA) and Framework Contracts.

Broadcom’s shift toward subscription-only deals and rigid bundles means you can no longer assume the “standard” contract is reasonable.

A default Broadcom offer might leave you over-committed, paying for unwanted products, and with limited flexibility if your needs change.

The good news is that with the right approach – a skeptical eye on vendor defaults, careful planning, and firm negotiation – you can still craft a VMware ELA that protects your interests.

Below, we break down what to include in your ELA, which contract clauses to focus on, how to handle the new licensing model, and specific tactics to push back on Broadcom’s terms.

What to Include in a VMware ELA

When structuring a VMware ELA under Broadcom, be deliberate about its scope and content.

Make sure to include:

• All critical VMware products you need: List every VMware component your organization uses or plans to use. This may include vSphere hypervisors, vCenter management, vSAN (storage virtualization), NSX (network virtualization), Horizon (VDI), Aria/vRealize (cloud management), and others. Ensure the ELA explicitly covers each one. Broadcom’s new bundles may exclude certain features (for example, NSX or advanced management tools might only be included in higher bundles). Don’t assume – spell out the products and editions in your agreement to avoid costly add-ons later.
• Future needs and new initiatives: Consider upcoming projects during the ELA term. If you plan to adopt Kubernetes or containers, include VMware Tanzu in the deal. If multi-cloud or DR solutions are on the horizon, consider VMware Cloud offerings or vRealize/Aria suite components. It’s much easier to negotiate these upfront than mid-term. By including upcoming needs now, you lock in pricing and ensure support for those initiatives when you’re ready to deploy.
• Growth headroom: Avoid an ELA that only fits your current environment, leaving no room to grow. Negotiate a buffer for expansion – for example, the contract might allow you to deploy an extra 10-20% more VMs or CPU cores beyond your initial quantity without an immediate price increase. This growth allowance means that if your company scales up (through new projects, acquisitions, etc.), you won’t be scrambling to renegotiate or pay the list price for additional licenses. It also helps prevent having to overspend on day one “just in case” – you have a cushion built in.
• Cloud and hybrid use rights: Make sure the ELA supports your cloud strategy. Broadcom’s VMware is pushing cloud-integrated subscriptions (like VMware Cloud on AWS, Azure VMware Solution, etc.). Negotiate the right to use your licenses in the cloud or in hybrid deployments. For example, ensure you can assign ELA licenses to VMware Cloud on AWS hosts or migrate workloads to a VMware-as-a-service platform without incurring double payment. This provides you with the flexibility to transition to cloud or SaaS models during the term, if needed, without incurring a penalty.
• Services and training credits: Given Broadcom’s tighter grip on support, it’s wise to bake in some value-added services. Ask for professional services days, training credits, or technical account manager support as part of the ELA. For instance, you could negotiate 100 hours of VMware consulting services or some VMware University training seats. These extras help your team fully utilize what you’re buying (reducing the chance that software sits as shelfware) and offset the sting of Broadcom’s higher costs.
• Legacy license transition: If you have existing perpetual VMware licenses and support contracts, address how those roll into the new ELA. Broadcom is phasing out perpetual support; however, you may be able to negotiate credit for the remaining value of your current support agreements or a discount when converting those licenses to a subscription. Don’t let that investment go to zero. For example, if you paid for VMware support through the end of the year, ensure the ELA pricing accounts for that or extends support until the end of that period. Additionally, clarify whether you can continue running older perpetual licenses outside the ELA (perhaps for dev/test environments) – and if so, that doing so won’t violate the new agreement.
• Phased deployment (to avoid shelfware): You don’t have to deploy everything on day one of the ELA. If there are products you’ll only use in year 2 or 3, negotiate a phased rollout schedule. For example, you might include NSX licenses in the ELA but only start their term or support ticking when you actually begin the NSX project next year. Broadcom could structure this as a deferred start or co-termed add-on. The key is not to pay full price today for a product you won’t use until later. A phased approach ensures you’re paying in line with the value received, rather than front-loading costs for shelfware.

Read about How to Build Flexibility Into a Broadcom Enterprise License Agreement.

Licensing Models – Subscription vs Perpetual

Broadcom has transitioned VMware to a subscription-centric licensing model, marking a significant shift from VMware’s previous perpetual licenses.

It’s crucial to understand how this impacts your ELA negotiation:

• Perpetual Licenses (legacy model): In the past, VMware sold perpetual licenses – you paid a one-time fee per CPU (or per core) and then paid annual support (typically around 20% of the license cost) for updates and support. You owned the software version forever. The advantage was cost predictability over a long period; once purchased, you could run that version as long as you wanted. However, under Broadcom, new perpetual licenses are no longer sold, and even support renewals on existing licenses are being discontinued. If you stick with perpetual VMware licenses without an ELA, you risk running outdated software with no vendor support or patches. Essentially, perpetual is being phased out as a viable option for enterprises, except perhaps for legacy environments you’re willing to keep static or support via third parties.
• Subscription Licenses (Broadcom’s model now): VMware licensing now works like a subscription service – you pay yearly (or multi-year upfront) for the right to use the software and receive support/updates. If you stop paying, your rights to use the software (at least the latest versions) end. Broadcom has mandated subscription-only licensing for VMware’s portfolio. The upside of subscriptions: you always have access to the newest features and security updates, and potentially the licensing can be more flexible (e.g., VMware offers bundles and SaaS services that weren’t available perpetually). The downside: over a 3-5 year period, subscriptions often cost more than the old perpetual + support model. You’re continually paying, and Broadcom has greater power to increase prices over time. In an ELA negotiation, recognize that moving to subscription is effectively a price increase in disguise – so demand commensurate value (or discounts).
• Negotiation implications: You likely have no choice but to transition to subscriptions when your current contracts expire, but use that fact to your advantage. Broadcom knows that customers are unhappy about losing perpetual licenses; savvy buyers will use that as leverage. For example, if you agree to a 3-year subscription ELA, insist on locking the pricing for those years (with no hidden increases) and consider including an option to convert some subscriptions back to a perpetual-like license if Broadcom ever reintroduces them (even if hypothetical, it signals your desire for insurance). Also, carefully consider term length: a longer subscription term (3-5 years) can secure better discounts and protect against price hikes, whereas a short 1-year term might leave you exposed to annual increases. Evaluate the total cost of ownership of a subscription versus keeping perpetual. If you have a large installed base on perpetual, one strategy is to only subscribe for growth or new products, and maintain some legacy systems as-is for a while. However, be aware that Broadcom will use the support cutoff to pressure a full conversion. Ultimately, if you must opt for a subscription, negotiate a favorable rate. In that case, you are essentially “buying” the software anew over each year of the term, so every percentage point of discount will pay off repeatedly.

Key VMware-Specific Contract Clauses

Beyond just products and pricing, the contract language in a VMware ELA can make or break your deal. Broadcom’s legal terms often favor the vendor, so you need to redline and negotiate critical clauses.

Pay special attention to the following, and try to incorporate buyer-friendly wording (in plain language, here’s what to look for):

• Cloud Portability Clause: Ensure you can use your VMware licenses in cloud environments without extra fees. Broadcom may allow VMware licenses to be portable to approved cloud platforms (such as VMware Cloud on AWS or Google Cloud VMware Engine), but only if the contract specifies this. Example clause: “Customer may deploy licensed software either on-premises or in authorized cloud environments, and redeploy licenses across these environments as needed.” This prevents double-paying if you migrate some workloads to the cloud or run a hybrid cloud with VMware.
• Product Continuity/Swap Clause: Protect yourself against changes in VMware’s product lineup. Broadcom is known for shuffling bundles and carving out features as separate products. Include a clause that if any product in your ELA is discontinued, renamed, or re-packaged during the term, you automatically get the equivalent new product or feature. For instance, “If an included product is replaced or split into a new offering, Customer will receive access to the successor product with no additional license fees.” This way, if Broadcom decides to, say, spin off a currently included feature into a separate SKU next year, you won’t have to pay extra to keep using what you already bought.
• Renewal Price Cap: One of the most important clauses. Broadcom’s default is to hit you with a significant price increase at renewal if possible. Negotiate a cap on renewal price increases. For example: “Any renewal of this agreement will not exceed a price increase of 5% per year (compound) from the prior term’s pricing.” This might be challenging to obtain, but even a cap of 5% or the CPI inflation rate is far better than an open-ended renewal. Without this, you could face a nasty budget surprise when your ELA expires (we’ve seen cases of 2x, 3x, even higher renewal quotes under Broadcom).
• Audit & Compliance Terms: VMware (under Broadcom) can be aggressive in enforcing compliance. Tighten the audit clause to make it reasonable. Insist on notice period and cure rights. For example: “Vendor may audit usage no more than once every 12 months with at least 30 days written notice. Customer shall be allowed to cure any license shortfall by purchasing required licenses at the prices and discounts in this agreement, without penalties or back-dated fees.” The goal is to avoid punitive true-ups. You want the contract to say, in effect, if you’re caught short on licenses, you’ll pay what you would have paid under the ELA rates – not some exorbitant penalty or back-maintenance. Also, avoid “fishing expedition” audits by limiting frequency and maybe specifying that audits must coincide with your annual true-up or renewal period.
• True-Up and True-Down Provisions: Define how adding or removing licenses is handled. Broadcom’s standard stance is that you can always buy more (at high cost), but you can never get a refund for unused licenses. Try to negotiate flexibility, such as: “Additional licenses purchased during the term co-term with the ELA at the same unit price/discount.” and “At each anniversary, Customer may reduce up to X% of license quantities going forward, with an equivalent reduction in fees, to account for decreased needs.” Vendors hate the idea of a true-down, but it’s worth asking, especially if you’re committing to a large bundle – it shows you’re wary of shelfware. Even if you can’t drop licenses mid-term, consider negotiating a banking mechanism (e.g., if you paid for 100 licenses and only used 90, you have 10 “credits” to deploy other VMware products or additional instances later). The key is to introduce some flexibility so you’re not locked into overspending if your situation changes.
• Payment Terms and Timing: Broadcom often requires upfront payment for multi-year deals (or year-by-year upfront payments at each anniversary). Try to negotiate more favorable payment terms, such as annual payments over a multi-year term with no surcharge. Also, clarify currency and exchange rate issues if you operate globally (Broadcom’s default contract might put the exchange rate risk on you). Ensure the contract language on payment is something your finance team can live with – e.g., “Customer may pay fees annually at the start of each contract year. Fees are fixed in USD (no FX uplift) for international affiliates.” Flexibility in payment can significantly help cash flow and align payment with realized value over time.
• Support SLA Clause: Under Broadcom, some customers worry that support quality may dip (due to cost-cutting). If VMware is mission-critical for you, negotiate specific support service levels into the ELA. For instance, “Vendor will provide 24×7 support with a 1-hour response time for Severity 1 issues” or “A named support account manager will be assigned.” Also consider a clause for support credits or penalties. While Broadcom might resist, you can propose “If vendor fails to meet the agreed support response times on critical issues, customer receives a credit or the right to extend support term proportionally.” Getting a formal SLA in writing holds Broadcom accountable if its standard support deteriorates.
• Exit and Termination Terms: It’s rare to get a broad termination-for-convenience, but you can seek specific exit clauses for breach. For example, suppose Broadcom fails to deliver a critical component or violates a term. In that case, you want the ability to leave or, at the very least, receive a refund for the unused portion. Additionally, negotiate a renewal grace period: “If the parties are in good-faith negotiations at contract end, vendor will not terminate support or apply late penalties for at least 30 days past expiration.” This prevents Broadcom from using a hard cutoff as pressure. It’s a small clause that can save you from service disruption if renewal talks go long.
• Documentation of all special terms: Finally, get everything in writing. If Broadcom’s sales team agrees verbally to a concession (“Oh, we’ll allow you an extra 3 months to transition to the new version” or “We won’t charge you for those 50 test licenses”), put it in the contract or an addendum. No matter how friendly your sales rep is, Broadcom’s legal folks will hold you to the literal contract text. Add a sentence or two to memorialize any non-standard allowances. For example: “As discussed, the customer may continue to use VMware vSphere 7 for up to 6 months after contract start for transition purposes, despite vSphere 8 being the current version.” If it’s not in the document, it doesn’t exist. Don’t rely on “we said, they said” – Broadcom’s memory will be short when people move roles or time passes.

Must-Have Terms in Your VMware ELA

The table below summarizes key clauses to watch for, what Broadcom typically offers by default, and the best-practice position you, as the customer, should push for:

(The above terms are among the most important to nail down. Always compare Broadcom’s draft against these best practices and push back on any gaps.)

Combining VMware with Other Broadcom Products

Broadcom owns a diverse portfolio (VMware, Symantec, CA, etc.), and they will often encourage a “portfolio ELA” – one agreement to cover VMware plus other software.

This approach has pros and cons for buyers:

• Pros of a combined ELA: You receive a single unified contract and co-terming, which can simplify vendor management and renewals. It may also increase your total spend leverage – bundling multiple product families may result in a higher overall discount. For example, if you’re also a Broadcom (CA) mainframe or security customer, Broadcom might offer extra incentives to roll everything into one big enterprise deal. In theory, you could negotiate trade-offs (e.g., better pricing on VMware if you include some security products you need anyway). From a relationship standpoint, a larger deal can make you a “strategic customer” to Broadcom, potentially yielding better account attention.
• Cons of a combined ELA: All your eggs are in one basket. A combined VMware and Broadcom portfolio ELA will have a massive single renewal, giving Broadcom significant leverage at that time. If you ever want to drop or swap out one piece (say, a security product that isn’t meeting needs), you may have little flexibility because it’s tied into the all-or-nothing contract. Bundling can also lead to shelfware: you might end up including products that sound good but are never fully used, just to appease the vendor’s bundle requirements. Another risk is complexity – different product lines have different usage metrics (users vs. CPUs vs. MIPS, etc.). Managing compliance across a mixed bundle ELA can be tricky, and Broadcom’s unified contracts might have terms that are less granular than what you’d negotiate in a product-specific deal.
• Strategy if bundling: If you decide to combine VMware with other Broadcom products, negotiate each piece on its merits. Demand a clear price breakdown per product family, so you know, for example, how much of the cost is VMware vs. how much is for the security suite. This transparency helps ensure you’re actually getting the discount you think you are on each part. Also consider adding a clause to allow some flexibility between product pools – e.g., the ability to shift investment from one product to another if your needs change (Broadcom might resist, but it doesn’t hurt to ask for the right to swap, say, $1M of value from the mainframe tools to VMware products if priorities change). Finally, weigh the combined offer against separate deals: sometimes telling Broadcom you might keep VMware separate can actually pressure them to improve the combined offer. You don’t have to bundle everything if it doesn’t make sense; it’s your leverage to decide, not Broadcom’s.

Risks of a VMware-Broadcom ELA

An enterprise agreement with VMware under Broadcom’s terms can deliver value, but it also carries significant risks.

Be aware of these pitfalls and plan how to mitigate them:

• Overcommitment and Shelfware: Broadcom’s sales approach often encourages buying “more for less” – meaning larger bundles or higher capacity than you currently need, in exchange for a nominal discount. The risk is that you overcommit and end up with shelfware (licenses you paid for but never deploy). This is wasted budget. Once an ELA is signed, it’s very difficult to recover money for unused licenses. To avoid this, be conservative in what you commit to and insist on provisions (such as phased rollout or future purchase options) rather than buying everything on day one.
• Lock-In / Reduced Flexibility: A multi-year VMware ELA can create vendor lock-in. During the term, you’re financially tied to VMware solutions, even if better alternatives or strategic shifts arise. For example, if in year 2 a decision is made to move some workloads to a native public cloud or adopt a different container platform, you might find that you’ve already paid for VMware tools you no longer need, and that money is sunk. Additionally, when the ELA expires, Broadcom knows you have built your IT on VMware for the last 3 years – it’s painful to switch. That lock-in means less leverage at renewal time, unless you negotiated protections upfront.
• Steep Renewal Risks: Without negotiated caps, you may face significant price increases at renewal. Broadcom has a track record (with other acquisitions) of offering an attractive initial deal and then asking for dramatically more when it’s time to renew, leaving you deeply invested. If you sign a VMware ELA now, start planning for renewal the next day. Mitigate this risk by including price protections and by keeping alternative options alive so you’re not completely at Broadcom’s mercy later.
• Complex Compliance Trap: VMware technology can be complex (think multiple clusters, hosts, vCenters, etc.), and under Broadcom’s stricter terms, a misstep can mean non-compliance. The risk in an ELA is feeling that you have unlimited use and becoming lax in tracking – only to find out at audit time that you have exceeded some metric (such as deploying an extra cluster outside the agreed-upon scope or your CPU core counts exceeding what you licensed). Broadcom’s compliance enforcement is expected to be unforgiving. This can result in unexpected bills or even a breach of contract. You need to maintain diligent internal license tracking even during an ELA, and negotiate clear rules on how compliance is measured to avoid surprises.
• All-or-Nothing Impact: When VMware is combined with other products in a single ELA, a dispute or issue in one area can potentially jeopardize the entire arrangement. For instance, if there’s a payment disagreement or a legal dispute over one software component, in a bundled ELA, theoretically, Broadcom could threaten to suspend support across all products. Similarly, if your business had an unexpected downturn and needed to cut costs, you can’t easily scale back just part of the ELA to save money; you’re locked into the full commitment. This lack of flexibility can be risky if economic or business conditions change during the term.

In summary, a VMware-Broadcom ELA can be a double-edged sword: convenient and cost-effective if managed well, but potentially costly and restrictive if negotiated poorly. Recognizing these risks is the first step; the next is using negotiation tactics to mitigate them.

Negotiation Tactics for VMware ELAs Under Broadcom

To negotiate effectively with Broadcom (VMware), adopt a strategic, no-nonsense approach.

Here are several tactics savvy buyers use – presented in a quick bullet list for easy reference:

• Start early and plan the timeline: Don’t wait until the last minute to renew or sign an ELA. Begin discussions months in advance (6-12 months for large enterprises). Broadcom’s internal approval for special terms can be slow, and you need time to iterate. Early engagement also gives you time to escalate if needed and ensures you’re not backed into a corner by an expiring contract.
• Inventory your usage and eliminate waste: Enter negotiations with a clear understanding of your current VMware footprint. Audit all deployments, versions, and usage levels to ensure compliance. This data lets you push back on Broadcom’s proposals – for example, if they try to sell you 500 CPU licenses but you know you’re only using 300, you have the numbers to justify a lower commitment. Identifying unused licenses or features internally also provides grounds to remove them from the renewal, thereby saving costs.
• Establish a walk-away alternative: Even if fully moving off VMware isn’t realistic, create leverage with alternatives. Investigate other options: Could some workloads be moved to public cloud services (bypassing VMware) if needed? Are there viable competitors for certain functions (Hyper-V, KVM, cloud-native tools for new projects, etc.)? When Broadcom senses you have a Plan B – no matter how modest – you gain negotiating power. They’ll be less likely to impose extreme terms if they know you are willing to shift spend elsewhere.
• Be skeptical of “standard” terms: Broadcom may claim that certain terms or policies “cannot be changed.” Don’t accept that at face value. Treat everything as negotiable, especially if your deal is significant. For example, if they say, “We never include a price cap” or “Our policy is no refunds for unused licenses,” consider that a starting position, not the outcome. Often, pushing back (and speaking with someone higher up) can break down those “standard” terms. Remember, Broadcom’s playbook is similar to Oracle’s – it initially appears rigid, but often softens when the deal size or strategic value is at stake.
• Demand transparency in pricing: Request that Broadcom break down the costs in any proposal. If they give you a lump sum for a bundle, request to see the per-product or per-unit pricing behind it. This helps you spot any areas where they’ve given a minimal discount (or hidden a price hike). It also lets you prioritize what to negotiate. For instance, you might find the vSphere part of the quote is reasonable, but the vRealize suite is overpriced – information that lets you focus your efforts. Transparent pricing also prevents the vendor from obscuring true costs, making your internal justification easier.
• Maintain a unified front and involve executives: Assemble a strong negotiating team that includes representatives from IT, procurement, and finance. Internally agree on your goals and fallback positions. When engaging with Broadcom, speak with one voice – contradictory messages from your side will be leveraged against you. It helps to have a C-level executive (CIO or CFO) visible in the process, even if they’re not in every call. Their involvement signals to Broadcom that this deal has top-level attention, meaning you won’t easily bend. If negotiations stall, don’t hesitate to escalate on the vendor side – request a meeting with a VMware/Broadcom VP or higher. Higher-ups have more authority to grant exceptions or improved terms, especially if they sense the deal (and revenue) might be at risk.
• Leverage multi-year commitment wisely: Broadcom loves multi-year deals (3+ years) because it locks in your revenue. If you’re agreeing to a multi-year ELA, extract concessions for it. For example, insist on locking pricing for the entire term, or negotiate a larger discount given the long commitment. Also, consider building in a mid-term checkpoint – e.g., a mid-term review clause that allows renegotiation if your user count drastically changes (either up or down). While you likely can’t walk away mid-term, you can ask for the contract to allow adjustments under certain conditions. Make the multi-year aspect a win-win: they get revenue certainty, you get better terms.
• Include every promise in the contract: As mentioned earlier, do not rely on promises or sales slides. If the sales rep says, “We’ll give you X for free” or “You can flex this usage,” write it into the agreement text or an addendum. During negotiations, keep detailed notes of what’s said, and follow up with emails – “As per our call, we agree that…”. When the contract draft arrives, verify that all the specified items are included. Broadcom’s contracts can be dense, so use your notes to ensure nothing fell out. This disciplined approach avoids disputes later (“I thought we had an exception for that–oh, it’s not in the contract, too bad”).
• Maintain a firm but professional stance: Negotiations may get tough, and Broadcom’s team might pressure you with end-of-quarter deadlines or “take-it-or-leave-it” posturing. Stay calm and professional, but also firm. It’s okay to say “That doesn’t work for us” and back it up with a rationale. For example: “We cannot sign without a cap on year-4 pricing; it’s a governance requirement for us.” When you push back, do so with respect and facts. Broadcom is more likely to make concessions to a well-prepared, rational customer than to a combative or unfocused one. Remember, you will likely need to maintain a relationship with VMware/Broadcom for years – you want to be viewed as a strong negotiator and a valued customer, not an adversary. That balance can actually yield better deals.

By employing these tactics, you put yourself in the driver’s seat as much as possible.

Broadcom’s negotiators are experienced, but if you come equally prepared and resolute, you can achieve an agreement that meets your business needs rather than just accepting their first offer.

FAQs: VMware ELA Negotiation Under Broadcom

Q: What has changed in VMware’s licensing under Broadcom?
A: Broadcom has dramatically changed VMware’s commercial model. The most significant shifts are the transition to subscription-only licensing (no new perpetual licenses or support renewals for older ones) and substantial price increases on VMware products. Broadcom has also consolidated many VMware products into a few bundles, which can force customers to purchase more than they previously did. In short, expect a tougher stance: less discounting, more rigid terms, and an emphasis on multi-year subscription deals. If your VMware renewal is coming up after the acquisition, assume the pricing and terms will not be “business as usual.” Prepare for a potentially sticker-shocking quote and very little flexibility unless you negotiate it.

Q: Do we have to convert our existing perpetual VMware licenses to subscriptions now?
A: If you want to stay current and supported, effectively yes. Broadcom has signaled that once your current support contracts for perpetual licenses expire, they won’t let you simply renew that support. They want customers to migrate into subscription agreements to get updates and support. You can technically keep running your perpetual-licensed software without support (there’s no “kill switch”). Still, you won’t receive any patches, security fixes, or new versions – which is a risk for enterprise workloads. There are third-party support providers for VMware that some companies consider as a short-term stopgap, but that’s a big step and not always viable for complex environments. The safer path, if you need to remain supported, is to negotiate a transition to a Broadcom subscription/ELA. In doing so, try to get credit for the investment you’ve already made. For instance, if you bought VMware licenses under a perpetual model in the past, mention that in negotiations – ask for a loyalty discount or a bonus because, in essence, you are being asked to pay for the software again as a subscription. Smart negotiation can ease the pain of that conversion.

Q: How can we avoid paying for VMware software we don’t use (shelfware)?
A: The key is discipline in scoping and flexibility in terms. First, conduct a thorough assessment of what you currently use and what projects are realistically scheduled. Don’t let Broadcom bundle “shiny object” products that lack a concrete deployment plan. If they insist a certain bundle is the only way, push back and say you need a custom SKU or carve-out (they may resist, but it flags the issue). Second, negotiate flexibility: for example, you might commit to a baseline and then add licenses only when needed at the same discount. Or negotiate a shorter term for a component you’re unsure about. Also, utilize techniques like phased deployment (don’t pay in full today for something you’ll deploy next year). Another tip: ask for periodic business reviews during the ELA, where you can swap out a limited number of unused licenses for other software of equal value – not all vendors allow this, but some large customers get clauses to exchange shelfware for other products or services. Finally, maintain internal accountability by tracking usage against your ELA entitlements. If you see something not being adopted as planned, you can address it at renewal (e.g., drop it or reduce quantities) – but only if you remember to, so keep it on your radar.

Q: Is it beneficial to combine VMware and other Broadcom-owned products in one enterprise agreement?
A: It depends on your situation. Broadcom will pitch a combined ELA if you have other Broadcom software (like Symantec security suites, CA mainframe tools, etc.) with the lure of simplicity and cost savings. If you truly need those products and they’re up for renewal around the same time, a unified deal might get you a higher overall discount. It also means one negotiation instead of several, which can save effort. However, the downside is that you lose flexibility. All those products will renew at once, and if you’re unhappy with one component, you lose leverage to change it independently. Additionally, budget-wise, a combined ELA could be a substantial lump sum, which may be more challenging to approve or manage internally. Some organizations prefer to keep, say, VMware separate from other software so they can evaluate that relationship on its own merits. A middle ground can be negotiating them in parallel to leverage total spend, but actually signing separate agreements (so you maintain the right to renew or not renew each independently). In any case, if you consider bundling, scrutinize the deal to ensure you’re not paying for something you have no intention of using. And make sure the bundle’s discount is truly better than what you’d get negotiating each product line on its own.

5 Actionable VMware ELA Negotiation Tips

Finally, here is a quick-hit list of five actionable tips to guide your VMware ELA negotiation with Broadcom.

These are practical steps to put into motion immediately:

1. Inventory and Plan Before Negotiating: Do Your Homework Upfront. Perform a data-driven inventory of your current VMware usage and forecast needs for the next few years. This ensures you only negotiate for what you truly need – and nothing more. By planning your requirements, you prevent vendor-driven overbuying and enter talks with a clear roadmap that anchors your decisions.
2. Use Your Shift to Subscription as Leverage: Broadcom is eager to transition customers to its new subscription model. Treat this shift as a bargaining chip. In exchange for moving off your comfortable perpetual licenses, ask for something in return – bigger discounts, extra support, or added value. Make Broadcom earn your commitment. For example, say: “We’re willing to sign a 3-year subscription, but in return we need a significant discount off list and some training thrown in.” Leverage the fact that you’re giving them recurring revenue to negotiate a better deal.
3. Build in Future Flexibility: Today’s needs might change tomorrow, so bake flexibility into the contract. Insist on terms that let you adjust as you go – such as price caps on renewals, the right to swap out one product for another if priorities shift, or the ability to reduce a portion of licenses at renewal if you overestimated. Also, push for cloud flexibility (e.g., the option to apply licenses to VMware Cloud or a similar platform) to keep your cloud journey open. By securing these options now, you avoid painful conversations later and ensure the ELA can adapt to your business over its term.
4. Don’t Overcommit – Phase Your Investments: Be very skeptical of any proposal that wants you to “buy it all now” for a slightly better price. It’s often not worth it. Instead, negotiate a phased approach: commit to your core needs now, and set checkpoints to add more if and when needed (at the same negotiated rate). This prevents paying for a bunch of software on day one that sits idle. It also shows Broadcom that you won’t be pushed into unnecessary spending just for a nominal bundle discount. Remember, a smaller deal that you fully use is better than a huge deal where half goes unused.
5. Keep a Credible Plan B: Always have an alternative in mind – and subtly let Broadcom know it. Perhaps you can extend your existing VMware versions for a bit longer, or consider shifting a pilot project to a public cloud provider instead of expanding VMware. Whatever it is, make sure Broadcom realizes you’re not entirely at their mercy. You don’t have to threaten outright, but mention things like “We’re evaluating AWS for some new workloads” or “The board is asking about contingency plans if we don’t do this VMware deal.” A credible Plan B, even if you prefer VMware, dramatically strengthens your negotiating position. It reminds the vendor that you have options and you’re willing to use them if pushed too far.

By following these tips, you’ll approach the VMware ELA negotiation with a strategic mindset and practical tactics.

The Broadcom era of VMware may be challenging for customers. However, with preparation, clear objectives, and a firm stance, you can still secure an enterprise agreement that delivers value, controls costs, and provides the flexibility your organization needs.

Negotiating with a skeptical eye on vendor promises and a focus on your long-term interests is the key to success. Good luck, and stay savvy!

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