Top 10 Lessons from Broadcom vs Siemens
The ongoing Broadcom–Siemens licensing dispute has become a wake-up call for every VMware customer. This high-profile clash isn’t just a legal oddity – it’s a blueprint of what can go wrong when license agreements and usage drift out of sync.
The Siemens case matters because it sets a precedent: if a global enterprise can get entangled in a bitter software licensing fight, no one is safe.
It underscores critical lessons from VMware and Siemens about how aggressively a vendor can become post-acquisition and how easily licensing missteps can escalate.
In short, this saga conveys a clear message: proactive license management is now mission-critical to avoid a similar battle.
Below, we break down ten key lessons from the Broadcom vs. Siemens situation. Each lesson highlights a pitfall made evident by the dispute, the risks it poses, and what you should do to protect your organization.
These insights come from a licensing advisor’s perspective – a strategic, skeptical view to help you stay one step ahead of vendor tactics.
For a complete overview, read our ultimate guide – Broadcom Audit Defense 101: Strategies to Handle Broadcom/VMware/CA/Symantec License Audits.
Lesson 1: Expect Drastic Changes After Vendor Acquisitions
Pitfall:
Assuming a vendor’s licensing and pricing will remain business-as-usual after a major acquisition. Many VMware customers didn’t anticipate how Broadcom would overhaul VMware’s business model overnight. This complacency left them unprepared for sweeping changes.
Risk:
Following its acquisition of VMware, Broadcom swiftly eliminated perpetual licenses in favor of subscriptions and bundled products. Prices for support and renewals spiked dramatically – some organizations saw maintenance costs increase by as much as 800%–1,500%.
Even a telecom giant projected a 1,050% price increase on its VMware bills. If you’re caught flat-footed by such changes, you could face budget crises, project delays, or an urgent scramble for alternatives. Perpetual licenses that you thought would serve you for years might suddenly become unsupportable, leaving critical systems in limbo.
What You Should Do:
Anticipate and plan for licensing upheaval whenever your key vendors get acquired or make big strategic shifts.
Practical steps include:
- Stay informed: As soon as an acquisition is announced, seek information on the new owner’s strategy. Assume pricing and terms will change – often not in your favor.
- Lock in terms early: If possible, negotiate contract extensions or renewals before the acquisition finalizes. For example, secure multi-year support on existing terms to buy breathing room.
- Assess the impact: Quickly review how a new licensing model (such as subscription bundles) affects your entitlements. Identify which systems might lose support or incur higher fees.
- Engage management: Inform executives of potential cost impacts following the acquisition. Early awareness can trigger budget adjustments or approvals to explore other options proactively.
Drawn from the Siemens scenario, this lesson is clear: a vendor’s takeover can flip your licensing table overnight. Prepare accordingly, so you’re not forced into reactive decisions when prices skyrocket or products get repackaged.
Lesson 2: No Customer Is Immune to Aggressive Enforcement
Pitfall:
Believing that being a large or loyal customer will shield you from strict compliance enforcement. It’s easy to assume a vendor wouldn’t risk a fight with a big account or certain industries – a dangerous assumption, as Siemens learned. Broadcom’s VMware did not shy away from taking a marquee customer to court.
Risk:
If even global enterprises and key accounts can be targeted, so can you. The Siemens dispute shows that poorly governed software licenses can lead to public, costly battles, regardless of your size or history with the vendor.
Nonprofits, educational institutions, hospitals, and government agencies – none were spared from Broadcom’s post-acquisition price hikes and tough stances.
If you assume “they need us more than we need them,” you risk underestimating the vendor’s willingness to play hardball. The fallout can include lawsuits, substantial true-up bills, or termination of services that disrupt your business operations.
What You Should Do: Treat software compliance and negotiations with seriousness, no matter who you are. Concretely:
- Maintain compliance rigorously – whether you’re a big company or a small one, have full visibility into your licenses and usage (more on that later). Don’t expect grace just because of your profile.
- Leverage your value, but don’t rely on goodwill. Use your spending power to negotiate better terms (such as discounts or concessions), but ensure they are in writing. Never assume an informal understanding will prevent enforcement.
- Prepare for audits/fights – Even as a major customer, have a plan if the vendor audits you or demands changes. Internal teams should know how to respond without admitting fault or escalating unnecessarily.
- Join customer advocacy groups – Sometimes, large customers band together (formal or informal user groups) to share information and push back on unfair terms. Being part of these can provide early warnings and collective influence, although results vary.
Siemens and others learned that size doesn’t grant immunity. In this Broadcom audit lessons saga, the takeaway is to always act as if you could be the next target – and manage your licensing position diligently to withstand scrutiny.
Also read, Top 10 Lessons from Broadcom vs AT&T: What VMware Customers Should Learn.
Lesson 3: Verify Before You Share – Audit Surprise Can Backfire
Pitfall:
Handing over deployment data or license inventories to a vendor without a thorough internal review. In the Siemens case, what began as a routine request for support turned into an inadvertent self-audit.
Siemens provided VMware a list of all the software it was running, hoping to get a support extension – not realizing that the list included products for which it lacked licenses. This was essentially an unplanned audit, and it set off the entire conflict.
Risk:
Sharing raw usage data with your vendor can be like opening Pandora’s box. If that data reveals any license shortfall (even unintentional), you’re immediately on the defensive.
In a worst-case scenario, the vendor might not only demand a license true-up but also sue for copyright infringement, as Broadcom did, turning a compliance issue into a full-blown legal battle.
At the very least, you’ll face hefty fees, back maintenance costs, and a damaged relationship. The element of surprise shifts to the vendor’s advantage – they now know exactly where you’re non-compliant before you can remediate.
What You Should Do:
Treat every vendor request for usage data as a high-stakes event. Here’s how to approach it:
- Never send unverified data – Audit yourself first. If a vendor requests an inventory (even under the guise of a “health check” or support renewal), have your IT asset management (ITAM) team and legal team review it. Scrub out any deployments you’re unsure about. Verify entitlements for each item on the list.
- Provide only what’s required – You are often contractually obligated to cooperate with audits, but that doesn’t mean you should volunteer extra information. Respond with precisely the data and scope the contract demands – nothing more.
- Address issues quietly – If your internal review identifies unlicensed installations or overuse, resolve them before disclosing the findings. You may be able to purchase additional licenses or reconfigure deployments to become compliant, thereby avoiding a flagrant violation scenario.
- Control the process – Designate a single gatekeeper (for example, your SAM manager or compliance officer) to communicate with the vendor during audits. This prevents well-meaning IT staff from accidentally sharing data dumps without oversight.
- Document everything – Keep records of the data provided and when it was received. If a misunderstanding arises later, you have a paper trail of your cooperation and transparency.
The Broadcom vs. Siemens dispute provides a stark example: an audit surprise can come from your own hand if you’re not careful. Always double-check before you deliver any information to a vendor that could be used against you.
Lesson 4: Read the Fine Print – Jurisdiction and Terms Matter
Pitfall:
Overlooking “boilerplate” contract clauses like governing law, jurisdiction, and dispute resolution. In calmer times, it’s easy to skim past these legal details.
But when a relationship goes sour, those buried clauses can dictate the rules of engagement – and you might find them stacked against you. Siemens found itself debating where the case should be heard (in the U.S. vs. Germany), a decision heavily influenced by prior contract terms.
Risk:
If your contract specifies all disputes must be resolved in the vendor’s home turf (for example, a U.S. state court favored by the vendor), you could be fighting on their battlefield.
Different jurisdictions mean different laws: VMware’s lawsuit against Siemens in the U.S. invoked copyright infringement, which carries the potential for higher damages and injunctions, whereas a contract dispute in Germany might have been more limited in scope.
The fine print can also include clauses about license termination, audit rights, or notification periods that, if not understood, leave you legally vulnerable. In short, you risk losing before the fight even begins if the contract terms favor the vendor.
What You Should Do:
Never treat a software agreement as non-negotiable boilerplate – especially for major, strategic software like VMware.
Proactive steps:
- Negotiate legal clauses – Whenever possible, negotiate the venue and governing law. If you’re a global company, consider advocating for disputes to be heard in your region or at a neutral location. Even if a vendor insists on their jurisdiction, you can seek a compromise (e.g., arbitration in a neutral country).
- Include protective language – Try to add clauses that provide cure periods for compliance issues (time to rectify any shortfall before the vendor takes legal action). Also seek to limit liability for unintentional license breaches and avoid any language that concedes too much, such as overly broad audit access rights.
- Understand your obligations – Ensure you are fully aware of what the contract requires in the event of a dispute. For example, how many days do you have to respond to an audit request? What laws apply if there’s a disagreement? Map these out so you won’t inadvertently waive rights or miss deadlines.
- Engage legal expertise – Have your legal counsel review all license agreements with an eye to worst-case scenarios. A small clause about “injunctive relief” or “equitable remedies” could mean the vendor can shut down your use of the software quickly if they claim a breach. Be aware of this in advance and plan accordingly.
- Jurisdiction strategy – If a conflict is brewing (for instance, you suspect a major compliance issue), consult with counsel on the best jurisdiction to resolve it. Sometimes, as a customer, you might initiate a legal action in a favorable court first, rather than waiting to be sued elsewhere. This is an advanced strategy, but the Siemens case shows that jurisdiction jockeying can be pivotal.
The lesson for VMware customers is to review the fine print now – it can save you from significant headaches later. A contract is not just a formality; it’s your first line of defense if things go wrong.
Lesson 5: Not All Features Are Free – Beware the “Included” Functionality
Pitfall:
Assuming that if a software feature is accessible, you’re allowed to use it under your existing license. Many products (VMware included) have tiered features or add-ons that are technically present in the software installation but require separate licensing.
In the Siemens dispute, one argument was that Siemens utilized VMware features it hadn’t paid for, perhaps believing they were part of the base product since those features weren’t locked out.
Risk:
Vendors sometimes leave premium features visible (without greying them out or requiring a special key), essentially trusting (or tricking) customers to comply with license terms. If your teams enable or use these extra capabilities, you could quietly fall out of compliance.
The risk is two-fold: you don’t realize you’re on the hook for additional licenses (budget surprise), and the vendor can later claim you breached the agreement by using unlicensed functionality (legal surprise).
This “feature trap” can lead to nasty true-up bills or, worse, accusations of intentional misuse. It’s a gotcha that can catch even well-intentioned tech teams off guard.
What You Should Do:
Approach all software features with a compliance mindset. To avoid feature-related pitfalls:
- Map features to entitlements – For each software product, maintain a matrix of which features or modules you have rights to use. Cross-check it against what’s available in the UI. If something is available but not covered in your purchase documents, assume it’s off-limits.
- Communicate to your teams – Educate administrators and engineers that just because a button or option exists doesn’t mean “it’s free.” Clearly inform them which features are allowed. In VMware environments, for example, if certain automation or management functions require higher licensing tiers, ensure they are aware of the boundaries.
- Technically restrict access – If possible, configure the software to disable or hide features you haven’t licensed. Some vendors provide ways to enforce license limits (like not exceeding CPU/RAM quotas, or not enabling certain modules). Use these controls to prevent accidental misuse.
- Regularly audit licenses for features – Include feature usage in your internal audits. It’s not just about how many copies are running, but what they’re doing. If a report or log indicates the use of an advanced feature, flag it and investigate whether it was properly licensed.
- Clarify in writing – When in doubt, ask your vendor in writing if a given feature is included in your edition. This can be valuable evidence in the event of a dispute. For example, obtain an email confirmation from your VMware representative that Feature X is considered part of the Enterprise edition you purchased. If they can’t confirm, that’s a red flag that you may need to license it separately.
The Siemens case illustrates how assumptions can be costly. Never take an unlocked feature for granted – double-check its licensing status before your organization starts relying on it.
Lesson 6: Monitor Your Usage Continuously (Trust, but Verify)
Pitfall:
Failing to actively track software deployments and consumption, and assuming you comply until told otherwise. Many companies only discover they’ve exceeded license limits when the vendor comes knocking (often at renewal or audit time).
With VMware, this is especially risky – its ubiquitous presence in data centers and the ease of spinning up new virtual hosts can lead to “license sprawl” if not properly managed.
Risk:
Without continuous monitoring, minor license overuses can snowball into major compliance gaps. It’s common for organizations to find they’ve deployed more virtual machines, CPUs, or features than their licenses cover – perhaps due to a fast-moving project or shadow IT activity. VMware (now Broadcom) has historically been aggressive in auditing customers; one industry survey found a significant percentage of enterprises had been audited by VMware in recent years.
The consequences of unmonitored usage range from an unexpected true-up bill in the hundreds of thousands (or millions) of dollars, to immediate suspension of support, to the kind of legal showdown we see with Siemens.
Additionally, lacking visibility means you can’t forecast or budget accurately, which is a significant operational risk in itself.
What You Should Do:
Make license tracking a routine, not a once-a-year scramble. Key actions:
- Implement SAM tools – Utilize Software Asset Management tools or vendor-provided tools to track VMware license consumption across your environment. Don’t rely solely on vendor portals (for example, VMware’s own licensing portal) without verification – maintain your own records.
- Set internal alerts – Configure thresholds that alert you when usage nears your licensed limits. For instance, if you’re licensed for 100 CPU sockets and you’re about to provision number 95, someone should get a notification. This ties back to one of the Broadcom audit lessons: if you catch it first, you can act before it becomes a violation.
- Quarterly self-audits – Conduct regular internal audits of your VMware deployment. Reconcile what’s deployed versus what you have purchased. Identify discrepancies proactively. Doing this quarterly (or at least biannually) ensures that there is no significant drift by year-end.
- Involve multiple teams – Break down silos between IT operations, procurement, and finance. The operations team might deploy new servers without considering the license implications; procurement might purchase licenses without understanding how they’re used. Establish a communication loop to ensure deployment plans and license entitlements remain aligned.
- Keep proof of compliance – maintain documentation, such as purchase records, license keys, and deployment logs, that prove your compliance status. If questioned, being able to quickly show “here’s what we have and here are the licenses to cover it” can shorten an audit and build trust (or at least demonstrate your diligence, which may stave off harsher penalties for any shortfall).
In summary, visibility is power. Continuous monitoring of VMware usage is your best defense against unwelcome surprises. It’s far cheaper and easier to adjust course in October than to face an audit finding in December.
Lesson 7: Have a Plan B – Don’t Bank on Status Quo
Pitfall:
Relying on a single vendor with no contingency plan if things go wrong. Many VMware customers were deeply invested in VMware’s platform and assumed they could continue on the same path indefinitely.
When Broadcom changed the rules (and costs), those without an alternative strategy felt trapped – exactly the position you never want to be in during a vendor negotiation.
Risk:
Without a backup plan, you have zero leverage. If VMware is running your private cloud, your disaster recovery, your development labs – and you’ve never evaluated other solutions – Broadcom knows you’re unlikely to walk away no matter what they charge or do. That can lead to extortionate pricing and one-sided terms.
Beyond pricing, there’s operational risk: if a vendor decides to terminate support (as Broadcom threatened for perpetual licenses) or issues a cease-and-desist to third-party support providers, can your business continue to run?
In Siemens’ case, they faced the prospect of losing VMware support while still being reliant on the software – a very fragile position. Not having a Plan B means you might have to accept whatever the vendor demands, or risk downtime and chaos.
What You Should Do:
Develop and maintain an exit strategy and contingency measures for critical software well in advance of when you need them.
Consider the following:
- Alternate vendors/technologies – Regularly assess the landscape of alternatives to ensure optimal performance. For virtualization, for example, explore other hypervisors or cloud solutions (Nutanix AHV, Microsoft Hyper-V, open-source KVM, etc.). You don’t have to switch immediately, but knowing your options and their pros/cons is powerful.
- Pilot projects – Run small pilot deployments on alternative platforms. This builds internal familiarity and proves out its viability. Even if you don’t migrate now, you’ll gain a better understanding of the effort and be able to estimate the cost/time required if you need to pivot away from VMware.
- Third-party support – If the vendor’s support terms become unreasonable, identify if third-party support providers exist for the software. (Be cautious: Broadcom has aggressively issued cease-and-desist letters to firms offering VMware support. But in some cases, especially for older versions, third-party support might still be an option to extend the life of your systems temporarily.)
- Cloud as a Safety Net – For some workloads, consider whether public cloud or containerization could replace VMware usage in a pinch. This might not cover everything and can introduce new costs, but it’s part of thinking outside the box if you need to reduce dependence on the vendor.
- Financial reserve for transition – In budgeting, include a contingency fund for license emergencies or migrations. If Broadcom doubles prices again next year, do you have funds earmarked to potentially initiate a replatforming project? If you plan, you might.
- Document your Plan B – Create an internal document that outlines what you’d do if you had to leave the vendor or if they were to withdraw support. Who would lead the transition project? What systems are the highest priority to replace? This kind of playbook can significantly reduce reaction time and panic in the event of the worst happening.
The key lesson is to never be completely captive to a single vendor. Broadcom’s handling of VMware has shown that companies need alternatives in their back pocket to avoid being squeezed. Even if you never fully leave VMware, just having a credible Plan B strengthens your hand.
Lesson 8: Negotiate Proactively – Don’t Wait for a Crisis
Pitfall:
Engaging in tough negotiations only when your back is against the wall. Customers who waited until renewal time – or until after receiving a giant bill or breach notice – found themselves with little negotiating leverage.
In the Siemens saga, by the time lawyers were involved, collaboration had broken down. A reactive, last-minute approach to license problems often leaves you with take-it-or-leave-it offers from the vendor.
Risk: Delay is costly.
If you postpone addressing licensing concerns, you may miss opportunities to secure better terms or avoid drama.
For example, if you ignore Broadcom’s announced changes until your support is about to lapse, you could end up hurriedly accepting an unfavorable subscription deal to keep the lights on. Or, if you discover compliance issues internally but wait for the vendor to find them, any goodwill or easy resolution options might evaporate – instead, you’re facing penalties or lawsuits.
By not being proactive, you also signal to the vendor that you’re disorganized or desperate, which undermines your position in any negotiation.
What You Should Do:
Take the initiative in managing and negotiating your VMware agreements.
Here’s how to stay ahead:
- Engage early – The moment you see potential trouble (such as license overuse or upcoming support changes), initiate a dialogue with the vendor. It’s better to approach VMware/Broadcom saying, “We see X issue and want to discuss options,” rather than waiting for them to accuse you. Early engagement can lead to creative solutions, such as transitional licenses or payment plans, that wouldn’t be offered in an adversarial scenario.
- Use renewal cycles wisely – Don’t treat renewal as a paperwork exercise. Start discussions 6–12 months prior to your VMware agreement expiration. In those discussions, leverage anything you can: maybe you’re considering moving some workload to a competitor (mention it), or you have budget constraints (explain them). Vendors often have more flexibility if they know you’re planning and are willing to explore alternatives.
- Negotiate contract clauses each time – Each renewal or license purchase presents an opportunity to refine the terms. Push for initiatives such as a cap on annual price increases, adding a contractual grace period for compliance issues (e.g., 30 days to purchase extra licenses if over-deployed, without penalty), or locking in certain discounts for future expansions. You won’t get what you don’t ask for.
- Escalate if needed – If your account manager can’t or won’t help, escalate to their management or your own executive who can interface with the vendor’s executive team. Large deals can sometimes get special terms approved if there’s enough at stake on both sides. Don’t be afraid to have high-level conversations well before any deadline.
- Stay calm but firm – A strategic, skeptical tone serves well. Signal that you expect hard-nosed tactics (so the vendor knows you’re not naive), but you’re here to find a mutually acceptable path. Avoid emotional reactions or ultimatums you can’t follow through on (“We’ll rip everything out!”) unless you genuinely mean it. Instead, use data and plans: “According to our analysis, moving X% of workloads to Y alternative is feasible if we can’t reach a fair deal.” That gets attention.
By negotiating proactively, you convert potential surprises into planned outcomes.
Think of it as steering the ship before you hit the rocks, rather than rebuilding after a shipwreck. Broadcom’s approach with VMware may be aggressive, but a well-prepared customer can still negotiate from a place of strength by being one step ahead.
Lesson 9: Treat License Compliance as a Serious Corporate Risk
Pitfall:
Treating software licensing issues as just an “IT problem” or a trivial contract matter. In reality, as the VMware–Siemens clash demonstrates, license compliance can explode into a multi-dimensional corporate crisis – legal, financial, and reputational.
Many companies fail to elevate this issue to the proper level of attention, leaving it off the executive radar until it’s too late.
Risk:
If software compliance isn’t on your risk register, you’re underestimating it. A vendor dispute can lead to lawsuits in federal court, potential injunctions shutting down software usage, millions in damages, and public embarrassment. In Siemens’ case, the allegations of unlicensed use put a spotlight on their internal controls (or lack thereof), and the fight made headlines.
For other companies, imagine being forced to announce that a key system might be turned off due to licensing issues – it’s not just about money, but also about business continuity and trust on the line.
Neglecting this risk means you may not have allocated the necessary resources (budget for SAM tools, staff for compliance, and legal advice) and lack a crisis plan. You essentially gamble your critical IT infrastructure on nothing going wrong, which is hardly a sound strategy.
What You Should Do:
Incorporate software license management into your broader governance, risk, and compliance (GRC) framework.
Steps to achieve this:
- Executive oversight – Ensure that senior leadership (CIO, CFO, or the board audit committee) is aware of the software license compliance status and associated risks. Regularly report on it just as you would on cybersecurity or financial audits.
- Risk register – Add an entry for “software license non-compliance or vendor dispute” in your enterprise risk register. Evaluate its likelihood and impact. For many large enterprises using VMware, the impact could be high (think: critical systems at stake). This forces discussion on mitigation plans (which many of the lessons here address).
- Internal audits and controls – Engage your internal audit department to periodically assess software license compliance processes. They should test if your organization can account for all VMware installations and licenses, and if policies are being followed. This independent check can identify gaps before an external audit is conducted.
- Policy and training – Have clear corporate policies on software use and compliance. Train employees (especially in IT and procurement) on those policies. Make it clear that unauthorized software use or failure to comply with license terms constitutes a violation of corporate policy, just like any other compliance lapse.
- Legal Preparedness – Collaborate with your legal team to develop a playbook for responding to licensing disputes or audit findings. This includes knowing when to engage outside counsel specialized in software licensing and how to handle communications (both internal and external media statements) if it goes public. Essentially, practice your response so you’re not making it up under pressure.
When managed as a business risk, license compliance receives the necessary resources and attention to prevent disasters. The Broadcom vs. Siemens battle drives home that this isn’t a niche IT issue – it’s a core business concern that warrants top-level priority.
Lesson 10: Weigh Your Options – Comply, Migrate, or Hybrid Strategy
Pitfall:
Falling into an all-or-nothing mindset when facing a licensing crunch – e.g., either blindly pay whatever the vendor asks, or attempt to rip-and-replace the software overnight. Knee-jerk reactions are risky.
Some VMware customers, upon seeing Broadcom’s new terms, felt they had to flee the platform immediately; others resigned to paying up without exploring alternatives. Both extremes can be costly mistakes if not carefully evaluated.
Risk:
Making a rash decision on something as foundational as your virtualization platform can have severe consequences. If you simply acquiesce to steep demands (such as compliance fees or subscription costs) without challenge, you may overpay by millions and still be stuck with onerous terms in the long term.
On the other hand, attempting a rushed migration away from VMware could cripple your IT operations if done without proper planning – imagine spending huge sums on new infrastructure or cloud services, incurring unexpected performance issues, or missing a critical feature your business needs.
There’s also a middle-ground risk: trying to half-migrate without a clear strategy, which can result in maintaining two systems (and paying for both) longer than anticipated. Each path – staying, leaving, or a hybrid approach – has significant implications.
Not choosing the optimal path for your situation is a pitfall in itself.
What You Should Do:
Perform a strategic analysis of how to move forward, using the dispute’s spotlight to inform your decision.
Consider these approaches:
- Option 1: Stay and comply (strategically) – If you determine VMware is still the best technical choice for your business, plan to comply but on your terms. Negotiate the best deal possible (as discussed), possibly by trimming unnecessary VMware products to reduce costs. Optimize your usage to avoid paying for what you don’t need (consolidate workloads, eliminate unused features). Essentially, if you stay, do so smartly and with tight license governance to prevent future issues.
- Option 2: Migrate away (gradually) – If trust is broken or costs are unsustainable, outline a migration plan. This likely spans 1–3 years (as many have noted, moving off VMware is not trivial). Identify less critical applications that can be moved to alternative platforms first to gain experience. Factor in costs for new licenses, re-training staff, consulting help, and parallel running during transition. Ensure leadership understands the investment required – it may still be worthwhile for long-term independence and savings, but it’s not a quick win.
- Option 3: Hybrid approach – You might choose to stay with VMware for core systems (where changing would cause the most harm) but diversify on the margins. For new projects or edge cases, try a different solution. Or maintain VMware for on-premises environments but shift some workloads to the public cloud, thereby reducing your VMware footprint. This hybrid tactic can gradually decrease your reliance on the vendor and give you leverage without a full rip-and-replace.
- Regularly revisit the decision – Whatever you do now, continue to evaluate it. The market will evolve: Broadcom’s stance might soften if enough customers push back, or alternatives might become more compelling. Set a cadence (such as an annual strategy review) to ask, “Are we still on the right path with our VMware strategy, or do we need to pivot?” Don’t let inertia dictate your future state.
- Learn from peers – Talk to industry peers (discreetly) about what they are doing. Many enterprises are in the same boat, deciding how to handle the “VMware under Broadcom” era. There’s value in learning from others’ successes or failures – it can inform your own choice.
In essence, this final lesson is about being deliberate and informed. Whether you double down on VMware or chart a new course, do it with your eyes open and a solid plan. The worst outcome is to do nothing and simply hope for the best. The Broadcom–Siemens episode shows that hope is not a strategy – action is.
Action Checklist for VMware Customers
If you’re a VMware customer facing renewals, audits, or uncertainty after the Broadcom takeover, here’s an actionable checklist to start moving in the right direction immediately:
- ✅ Review Your VMware Contracts Now: Pull out your VMware licensing agreements. Note any upcoming renewal dates, support end dates for perpetual licenses, audit clauses, and jurisdiction specifications. Flag any terms that could pose a problem (e.g., US-only jurisdiction, no grace period for compliance issues).
- ✅ Inventory All Deployments: Develop a complete inventory of your VMware products, versions, and features in use. Map these against your purchased licenses. This will highlight any gaps or questionable usage. Do this before any official audit or renewal negotiation so you know your position.
- ✅ Tighten Internal Compliance: Immediately implement the following if not already in place:
- Regular internal license audits (schedule them).
- A policy that no usage data goes to vendors without management approval.
- An approval process for deploying new VMware instances or enabling new features (to ensure licensing is accounted for each time).
- ✅ Engage Vendor Early: If your renewal is within the next 12 months or you’ve identified a compliance shortfall, initiate a conversation with your VMware/Broadcom account rep soon. Express your desire to find a solution and ask about options (e.g., promotional bundles, migration programs, or flexible payment terms). Starting the discussion on your terms beats waiting for an ultimatum.
- ✅ Explore Alternatives (Proof of Concept): Pick a non-critical workload or environment and test it on an alternative platform. For instance, try a small deployment on Hyper-V, Nutanix, or an open-source virtualization stack. This will provide you with insight into feasibility and performance, informing your long-term strategy and offering you talking points in negotiations (“We’ve successfully run X on Y, so we have choices”).
- ✅ Connect with Peers or Advisors: Reach out to industry peers, join user forums, or consult licensing experts. Understanding how others are navigating Broadcom’s VMware licensing can spark ideas for your own approach. An experienced licensing advisor can also identify negotiation levers you might miss.
- ✅ Update Risk Assessments: Meet with your risk management or internal audit team to officially document the risk exposure from VMware license changes. This often galvanizes executive support for necessary actions (such as approving a budget for additional licenses, tools, or even legal counsel).
- ✅ Set Executive Briefing: Prepare a brief for your CIO/CFO or relevant execs outlining the situation (rising costs, Siemens case precedent, our current compliance stance, and options to respond). Having leadership backing will make it easier to execute any tough decisions, whether that’s spending money now to true-up or funding a migration project later.
- ✅ Document Everything: Keep a detailed log of all communications with the vendor (emails, meeting notes) and of your internal compliance activities. If things ever escalate, these records demonstrate that you acted in good faith, which can be important in both negotiations and legal contexts.
- ✅ Stay Alert: Lastly, keep watching the VMware/Broadcom landscape. News updates, future lawsuit outcomes (like the Siemens case’s resolution), or policy changes can all impact your next move. Consider assigning someone the role of “licensing watcher” to disseminate relevant intel internally. In a rapidly changing scenario, information is power.
By following this checklist, you’ll be in a much stronger position to handle renewals or audit risks. It’s about being prepared, not scared – taking initiative rather than reacting at the last minute. Each step you take now is one less surprise down the road.
Read about our Broadcom Audit Defense Service.
