Broadcom’s efforts to ease concerns over its recent changes to VMware’s cloud licencing practices appear to have backfired.
Last week, Broadcom CEO Hock Tan attempted to reassure customers and investors with a blog post defending the company’s licencing practices.
Broadcom announced price cuts and increased flexibility for moving workloads between cloud environments, but CISPE has taken strong exception to Broadcom’s portrayal of the situation.
However, critics, including the Cloud Infrastructure Services Providers Europe (CISPE) trade group, reject the adjustments, arguing they fail to address core issues like price hikes and restrictive licencing terms.
The trade body, including Amazon and 26 small EU cloud providers, says Broadcom’s inadequate changes and needs to tackle the main issues.
According to CISPE, the subscription model itself is not the problem. “Our members already use subscription licencing,” the trade body stated in a press release. The real issues, it says, lie in “massive price hikes,” product bundling changes and unfair licencing terms that limit customer choice and lock them into Broadcom’s ecosystem.
The core of CISPE’s criticism centres on Broadcom’s new subscription terms, which they argue are “anti-cloud.” Unlike the traditional pay-as-you-go model standard in cloud services, the trade body argues that these terms force customers to prepay for virtual machine capacity they may not need.
“This is like being forced to pay, in advance, for a fleet of taxis that you may or may not use in the next three years”, the statement reads.
CISPE further criticises Broadcom’s software licencing practices, arguing they undermine the core value proposition of cloud services – on-demand access to resources. They view the offer of continued security patches for existing perpetual licence holders as “insulting,” forcing customers to subscribe for essential security updates.
Finally, CISPE aims for Broadcom’s lower prices and customer engagement claims. They assert that, in their experience, prices have skyrocketed by up to 12 times.
CISPE welcomed the European Commission’s intervention and urged a formal investigation into Broadcom’s practices.
“The ability for dominant software providers to unilaterally ‘pick winners’ by deciding who can and cannot licence their software is a clear form of discrimination,” CISPE said.
“We urge the European Commission and other powerful regulators to act to halt this abuse, damaging Europe’s shift to the cloud and digital growth. Formal investigations are needed now.”
Last week, a European Commission spokesperson confirmed that the antitrust regulator had requested information from Broadcom following complaints from trade groups and businesses.
The spokesperson added, “The Commission has received information suggesting that Broadcom is changing the conditions of VMware’s software licencing and support.”
Meanwhile, Broadcom maintains its changes provide more options for customers.
“Our simplified offering at a significantly reduced price responds to customer feedback and is focused on facilitating seamless workload management,” the company said.
