Negotiating Audit Settlements with Broadcom
Introduction – Broadcom Audit Settlements in Context
So you’ve received the audit report from Broadcom (covering products from CA to Symantec to VMware). It likely comes with a hefty compliance claim – a bill for unlicensed usage. Don’t panic.
This is not a final invoice; it’s the opening move in a negotiation. After an audit, Broadcom’s process shifts from the auditors to the sales/account managers.
Their job is to turn those findings into revenue. In other words, Broadcom uses audits as a sales opportunity, not just a compliance exercise.
Treat the audit outcome as a starting point for a deal, not a verdict.
Your goal now is to convert the findings into a manageable business resolution rather than paying punitive penalties.
This playbook outlines a step-by-step strategy for CIOs, procurement leads, SAM managers, and legal teams to negotiate a fair settlement following a Broadcom audit.
For a complete overview, read our ultimate guide – Broadcom Audit Defense 101: Strategies to Handle Broadcom/VMware/CA/Symantec License Audits.
Step 1: Break Down the Audit Report
Thoroughly analyze Broadcom’s audit report the moment it lands. Leave no line item unchecked. Your objectives in this first step are to validate the findings and spot any exaggerations or errors.
Key actions include:
- Validate the Methodology: Ensure that the auditor used the correct license metrics and counting rules as specified in your contracts. Ensure they followed the product’s specific licensing terms (user vs. device, core counts, etc.). If the audit used assumptions or general rules not in your agreement, flag it.
- Identify Overstated Findings: Scrutinize the numbers for “inflation.” Auditors sometimes count phantom users (e.g., old accounts), inactive devices, or double-count virtual workloads. For example, ensure that a decommissioned server isn’t still counted or that one VM isn’t counted twice in overlapping software bundles.
- Document Every Disagreement: For each finding you believe is wrong or inflated, gather evidence. Pull login records, inventory listings, or usage logs that support your case (e.g., proof that 500 of the “1,000 users” identified haven’t logged in for a year). Create a log of discrepancies between Broadcom’s data and your data.
- Prepare a Response File: Start building a structured rebuttal document. For each audit line item, note whether you agree or dispute it, and why. Attach your evidence. This response file will serve as your ammunition when discussions begin. It shows Broadcom you’ve done your homework.
By breaking down the report methodically, you transform it from a scary bill into a set of negotiable points.
Knowledge is power – knowing exactly what’s valid and what’s overstated in the findings puts you in control of the next steps.
Step 2: Build Your Settlement Position
With your analysis in hand, formulate your own position on what the true situation is.
The goal here is to differentiate between real compliance gaps and inflated claims, and to decide what you’re willing to settle.
Here’s how to build that position:
- Acknowledge the Real Shortfall: Identify any findings that are clearly valid – for example, if you truly deployed 20 more licenses than purchased, or used features beyond your entitlement. Plan to address these in the settlement (you’ll likely need to purchase something to cover them). By accepting the undeniable issues, you show good faith.
- Challenge the Grey Areas: For findings that are ambiguous or seem like a stretch, be prepared to push back. Maybe the contract language is unclear, or Broadcom assumed a worst-case interpretation. Mark these items as negotiable and back them with your counter-evidence. You might argue, for instance, that certain installations were for disaster recovery or testing purposes and therefore not subject to full licensing.
- Separate Wheat from Chaff: Clearly separate the legitimate compliance gap from the “padding.” If Broadcom claims you’re short 100 licenses, but your analysis shows only 50 real under-licensed instances, base your strategy on that lower number. Do not let inflated numbers set the narrative.
- Calculate Your Counter-Offer Baseline: Determine what covering the real shortfall would cost in practice (e.g., purchasing those 50 licenses or subscriptions). This gives you a baseline for a reasonable settlement. It will almost always be far less than Broadcom’s initial ask.
- Document Your Rationale: In your response file or negotiation prep notes, write out why your position is fair. Maybe the audit used data from a dev environment accidentally, or you already have unused licenses that weren’t counted. Having a clear justification for your counteroffer will be crucial when you present it.
By building your settlement position upfront, you’re effectively drawing your line in the sand – distinguishing what you’ll pay for and what you won’t.
This sets the stage for a focused negotiation where you can concede on real issues but stand firm against overreach.
Read about Symantec audits, Symantec Software Audits Under Broadcom: Compliance Risks & Defense Tactics.
Step 3: Engage Broadcom’s Commercial Side
Once you’ve dissected the audit findings and set your own position, it’s time to bring Broadcom’s sales team into the conversation.
The auditors have done their part; now the ball is in the account manager’s court.
Your strategy is to reframe the issue from a compliance failure into a commercial opportunity:
- Open a Dialogue with the Account Manager: Proactively reach out (or respond) to Broadcom’s account rep or customer success manager. Acknowledge that you’ve reviewed the findings and are prepared to discuss a business resolution. This signals cooperation without conceding to the initial bill.
- Reframe “Penalty” as “Purchase”: Broadcom’s motivation is largely to sell more products. So steer the conversation toward what you can buy rather than what you should pay as a fine. For example, if the audit says you’re short on licenses, propose to purchase the needed licenses in the future. Emphasize that you want to properly license your usage moving ahead, rather than dwell on punitive back-charges.
- Explore a Forward-Looking Deal: Rather than a one-time penalty check, consider incorporating the resolution into a standard commercial agreement. Could you roll this into your upcoming renewal or a new Enterprise License Agreement (ELA)? Example: Instead of paying $500K in penalties for past VMware use, you offer to sign a new three-year ELA worth $500K that includes the additional VMware licenses you lack. This way, Broadcom gets a similar monetary value, but you get a tangible product and support in return.
- Negotiate Maintenance and Support Wisely: A common vendor tactic is to charge “back-maintenance” fees (support fees for the period you were out of compliance). Push to waive or reduce retroactive maintenance. Argue that you’re willing to pay for support on new licenses in the future, but punishing you for past periods doesn’t foster a positive relationship. Often, Broadcom will relent if it means closing a new sale.
- Bundle and Barter: If Broadcom sells multiple product lines to you (remember, they now encompass CA, Symantec, and VMware), you might consider bundling resolutions together. Perhaps you’re also open to renewing your Symantec security software – use that as a bargaining chip (“We’ll commit to renewing product X for 3 years if we can settle this audit reasonably”). Leverage the total relationship value.
By engaging Broadcom’s commercial side, you change the tone. It’s no longer an accusation of wrongdoing; it’s a discussion on how to move forward.
Always center the dialogue on partnership: “We want to make sure we’re aligned and properly licensed as we continue our relationship.” Broadcom’s team will be receptive if they see a deal on the horizon rather than a fight.
Step 4: Negotiation Tactics That Work
Now you’re in the thick of negotiations. Broadcom has likely presented an initial settlement figure or offer – don’t accept it at face value.
This is the stage to exercise smart negotiation tactics, using leverage and strategy to minimize the impact. Keep these tactics in your toolkit:
- Never Accept the First Number: Broadcom’s first settlement offer is almost always a high anchor. Treat it as a starting point. Even if it sounds shockingly high, respond as if it’s expected to come down. For example, if they demand $1 million, you might counter with evidence and offers that bring it down to a fraction of that. Vendors expect savvy customers to negotiate.
- Use Time to Your Advantage: Avoid acting in a rushed or desperate manner. If Broadcom sets a short deadline (“sign in 10 days or the offer is off the table”), calmly request more time, citing internal approvals or budget review. High-pressure tactics are often a bluff to prevent you from countering. By slowing down the process (within reason), you signal that you have options and will not be bulldozed.
- Highlight Your Loyalty and Future Business: Remind Broadcom of the bigger picture. Emphasize how long you’ve been a customer and the significant investment your company has in Broadcom’s technologies. Mention upcoming projects or growth that could involve Broadcom products. The message: “We want to continue and even expand our use of your software, but we need this issue resolved fairly to justify that future investment.” This leverages Broadcom’s interest in future revenue.
- Introduce Alternatives (Tactfully): Without making open threats, you can allude to having options. For instance, if negotiations stall, mention that you are evaluating other solutions or have been considering moving certain workloads to alternative platforms or cloud services. Broadcom pays attention if it senses it might lose future business. Even the hint that you could shift away from, say, VMware to a competitor, can make them more flexible.
- Stick to Contractual Facts: If Broadcom’s claim includes items that go beyond your contract terms (e.g., maintenance fees beyond what the contract stipulates, or penalties not in the agreement), point that out. It shows you know your rights. Politely say you intend to settle within the bounds of the contract. If needed, imply that your legal team has reviewed the claim. The possibility of a legal challenge to an overreaching audit claim may prompt Broadcom to reconsider its unreasonable stance.
- Escalate to Higher-Ups if Necessary: Sometimes an account manager will hold a hard line (“take it or leave it”). If you’re getting nowhere, don’t hesitate to escalate within Broadcom. Involve your CIO or CFO to call Broadcom’s regional VP or another senior executive. Higher management at Broadcom may have more authority to approve discounts or creative solutions – especially if a big future relationship is at stake. A respectful escalation can break a deadlock when lower reps say “no” to everything.
- Maintain a Unified Front: In negotiations, ensure your team (procurement, IT, and legal) is on the same page. Broadcom should hear one consistent message. If they sense division on your side, they may exploit it by pressing the more lenient stakeholder. So align internally on what your limits are and who will take the lead in talks.
- Keep it Professional, but Firm: Throughout the back-and-forth, remain courteous and professional. A collaborative tone can invite concessions more than an adversarial one. However, being firm is different from being combative. State your points with confidence, back them with data, and repeat your key asks (e.g., “we need that back-maintenance waived to get this done”) as needed. Professionalism, coupled with persistence, is hard for a vendor to dismiss.
Example Negotiation Flow – From Audit Claim to Resolution: To illustrate, imagine Broadcom’s audit claim says you owe $800,000 for 100 unlicensed units, including penalties. After your analysis, you determine that only 60 units were truly unlicensed, and the rest is an overcount.
You counter by offering to purchase those 60 licenses on a new 3-year agreement – which might cost roughly $300,000 – and ask Broadcom to waive any penalties or back fees. You highlight that this purchase commits you to Broadcom’s platform in the long term.
Broadcom, keen to secure a sale and maintain the relationship, comes back with a revised offer of, say, $400,000 for an ELA that covers the 60 licenses and adds some extra products.
After a bit more haggling, you settle at $350,000 in new licenses/subscriptions.
Result: Instead of an $800K bill with no value gained, you’ve turned it into a $350K investment in software that solves the compliance issue and even enhances your environment. Broadcom closes the deal, and you avoid a budgetary nightmare.
In sum, effective negotiation can drastically reduce the cost of an audit settlement.
It’s about using evidence, leverage, and commercial savvy to transform Broadcom’s initial demand into a palatable agreement.
Step 5: Structure the Settlement Agreement
Reaching an agreement in principle is great – but it’s not the end. You need a well-documented settlement arrangement to protect your organization going forward.
Many companies make the mistake of settling on a handshake or a vague email. Instead, insist on a clear, written settlement (often an amendment or addendum to your contract). Key elements to include:
- Scope of Resolution: The agreement should explicitly state that it covers all licensing findings for the period that was audited. For example, “This settlement resolves all license compliance issues identified in the audit report for the period up to [Date].” This prevents Broadcom from revisiting these issues later.
- Your Obligation: Clearly document what you are doing as part of the settlement – e.g. purchasing X licenses, or trueing up maintenance on Y products, or perhaps paying a one-time fee (if any). Each component of what you agreed to give should be listed.
- Broadcom’s Obligation (Release of Claims): The settlement must state that Broadcom accepts these actions as a full resolution. Language like “Broadcom agrees that upon Customer’s fulfillment of the above obligations, no further fees or claims will be pursued for the audit period in question.” This is your protection against double jeopardy in future audits. No double-charging – you don’t want the next audit to charge you again for the same past usage.
- No Admission of Fault (if possible): If your legal team prefers, include that this settlement is a commercial compromise, not an admission of intentional non-compliance. This can protect you in case of any future legal interpretations.
- Updated License Entitlement: Ensure that the agreement confirms your new entitlements after settlement. If you purchased 60 licenses as part of the deal, the document should acknowledge that your license count for Product X is now 60 more. This helps avoid confusion later about what you own.
- Confidentiality Clause: Broadcom often wants confidentiality, and you might, too. The deal you get should not become a benchmark for others (and you don’t want it publicly known that you had a shortfall). A common NDA clause stipulates that neither party will disclose the settlement terms. Just make sure it doesn’t bar you from consulting with legal or internal advisors – it should target external disclosure.
- Future Audit Alignment: If possible, tie the settlement to any upcoming contract renewal. For instance, include a provision that your master agreement will be updated to reflect any new licenses and possibly improved audit terms (like clearer audit processes or a moratorium on auditing you again for a year or two). This isn’t always feasible, but it’s worth considering if a renewal is on the table.
Example Settlement Clause (Draft Language):
“This Settlement Agreement confirms that all license compliance issues identified in the Broadcom audit report dated Sept 30, 2025 are fully resolved. Customer agrees to purchase an additional 60 licenses for [Product] and Broadcom agrees to waive any retroactive maintenance or penalty fees related to the audit findings. Broadcom further releases Customer from any claims or fees for any unlicensed use of [Product] prior to the date of this agreement. Both parties acknowledge that this settlement is a compromise to avoid dispute, and agree to treat its terms as confidential.”
The above is an illustration, not legal advice – but it captures the idea. Everything is spelled out: what you’re buying, what they’re waiving, that it’s done and closed, and that it’s private.
Once such an agreement is signed (and you fulfill any purchase commitments), you can breathe easier knowing this audit won’t come back to haunt you.
Audit Settlement Checklist
Use this quick checklist to ensure you cover all bases in a Broadcom audit settlement:
- ✅ Review & Verify Findings: Thoroughly review the audit report against your own data. Confirm license metrics and identify any errors or overcounts.
- ✅ Document Counter-Evidence: For each disputed item, gather proof (system logs, inventories, contracts) and prepare a clear rebuttal.
- ✅ Calculate True Exposure: Determine the genuine shortfall (if any) in licenses and what it would cost to remediate properly.
- ✅ Engage the Account Team: Approach Broadcom’s sales reps to discuss a commercial solution rather than cutting a penalty check.
- ✅ Propose a Resolution Plan: Offer to purchase licenses or subscriptions to cover needs, negotiate terms like waived back fees, or bundle the fix into an upcoming renewal/ELA.
- ✅ Negotiate Firmly: Don’t accept the initial offer. Use evidence to highlight your importance as a customer and challenge unfair charges.
- ✅ Document the Agreement: Get a written settlement or contract amendment that outlines exactly what both sides commit to and closes out the audit claims.
- ✅ Verify Entitlements Post-Settlement: After the deal, update your internal records with any new licenses and ensure you’re now in compliance moving forward.
- ✅ Plan for Future Compliance: Learn from this experience – improve tracking, maybe negotiate better audit clauses at your next renewal, and avoid falling into the same trap again.
By following this checklist, you can systematically go from audit shock to a stable resolution.
Read about Broadcom vs Tesco and what to learn: Broadcom vs Tesco: Top 10 Lessons for VMware Customers.
FAQs
Q: Can Broadcom charge back-maintenance in an audit?
A: Broadcom will often try to include back-dated maintenance fees as part of the audit claim. This means they want you to pay support fees for the period during which you used licenses without proper entitlement. However, these fees are negotiable. If your contract doesn’t explicitly mandate paying maintenance for past unlicensed use, you have grounds to push back. Many companies succeed in getting back-maintenance reduced or waived during settlement, especially if they agree to buy new licenses in the future. The key is to make the case that you’re ready to invest in a future relationship (and pay maintenance on new licenses), but punitive retroactive fees will strain that relationship.
Q: Should I accept Broadcom’s first settlement offer?
A: No. The first offer from Broadcom is typically an opening gambit – and it’s usually inflated. Treat it as a starting point for discussion. Just as you wouldn’t pay the sticker price on a car without negotiation, don’t pay an audit claim without question. Review the offer against your own analysis. Craft a counteroffer that addresses the real compliance issues at a more reasonable cost or via a purchase. Broadcom’s representatives expect negotiations; in fact, they often have the authority to come down from the initial number, but only if you push back. Always respond with a well-reasoned counter (e.g., “We’ve looked at your claim of $1M. By our calculation, it should be about $300k, and here’s why…”). You’ll be surprised how often the final settlement ends up much lower than the initial ask.
Q: How do I push back on inflated audit findings?
A: The best tools against inflated findings are data and contract language. Start by calmly presenting your evidence that contradicts the overstatement – for instance, “Broadcom reported 1,000 installations, but here are records proving 300 of those were decommissioned systems.” Stick to facts and numbers. Additionally, please refer to your license agreements or product usage rights: if Broadcom interprets something more strictly than the contract states, point that out. It’s also effective to ask questions: “Can you help us understand how you arrived at this number? Our independent analysis shows a different figure.” This places the onus on Broadcom to justify its claim, often revealing weaknesses. By demonstrating you’ve done detailed homework and are willing to challenge politely, you signal that you won’t be a pushover. Broadcom, facing a well-prepared customer, will usually soften its stance on questionable portions of the findings.
Q: What should a settlement agreement always include?
A: A solid settlement agreement should include a few critical elements:
- Resolution of Specific Audit Period: It must state that the settlement resolves all compliance issues for the period that was audited (so Broadcom can’t double-dip on this later).
- What the Customer Will Do: This section should outline your commitments – e.g., purchase X licenses, pay Y amount, implement specific controls – whatever you agreed upon.
- What Broadcom Will Do: Crucially, it should say Broadcom accepts this remedy in full and releases you from further claims for that audit’s findings. In other words, once you do your part, the matter is closed.
- No Future Penalties for Past Issues: Include language that Broadcom won’t seek penalties or fees in the future for the same past usage. You don’t want a change in Broadcom personnel a year from now, which could revive old issues.
- Confidentiality: Both parties often include a confidentiality clause to maintain the privacy of the terms.
- Updated License Entitlements: It’s wise to document what your new license count or entitlement is after the settlement (so there’s no confusion later about what you own).
In summary, the agreement should clearly close the chapter on the audit, detail the give-and-take, and protect you from any surprise revisits of the issue. Always have your legal team review the settlement language to ensure it aligns with these points and doesn’t introduce new risks.
Read about our Broadcom Audit Defense Service.
