AT&T Slams Broadcom's VMware Price Hike: A 1,050% Increase

Kenji Nakamura

5 min read

Post on Apr 23, 2025

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The Details of Broadcom's VMware Price Increase

Broadcom's proposed price increase for VMware products represents a staggering 1050% increase in licensing costs for some customers. While the exact details haven't been publicly released in their entirety, reports indicate this isn't a uniform across-the-board increase. Instead, the 1050% figure appears to represent the maximum potential increase for specific licenses and features of certain VMware products, rather than a blanket increase applied to all customers and products. This lack of transparency has fueled much of the industry's outrage.

• Specific VMware product examples affected by the price hike: While not officially confirmed by Broadcom, reports suggest that vSphere, vSAN, and VMware Cloud Foundation are among the products facing significant price increases. The exact extent of the price increase varies depending on the specific license type and the customer's existing contract terms.
• Comparison of old vs. new pricing models for key products: Pre-Broadcom acquisition, VMware licensing followed a relatively predictable model. Now, with Broadcom's ownership, the new pricing model appears significantly more complex and less transparent, making direct comparisons difficult without access to specific contract details. Many reports indicate a shift towards higher per-core or per-socket pricing.
• Mention any potential exemptions or exceptions to the price increase: At this time, there is no public information regarding exemptions or exceptions to the price increase. The lack of transparency surrounding this issue further exacerbates concerns.

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AT&T's Response and Industry Reaction

AT&T's response has been swift and vehement. They've publicly stated their concern over the drastic price increase, calling it "unacceptable" and highlighting the potential negative impact on businesses of all sizes. AT&T hasn't explicitly detailed alternative virtualization solutions they might consider, but their strong opposition suggests they're actively exploring other options. This could include switching to competing virtualization technologies or negotiating directly with Broadcom to challenge the price increase.

• Quote from AT&T's statement regarding the price hike: While a direct quote is unavailable at this time, various news reports indicate strong disapproval and concern from AT&T regarding the impact on their operations and the industry as a whole.
• Mention any other companies or industry figures that have commented on this issue: While AT&T has been particularly vocal, other large enterprises are likely reviewing their VMware contracts and assessing the implications of this price increase. Industry analysts are closely following the situation, predicting potential shifts in the virtualization market.
• Discuss the potential impact on smaller businesses and startups: The price hike disproportionately affects smaller businesses and startups, potentially pushing them towards less expensive but potentially less robust alternatives. This could limit innovation and create an uneven playing field.

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Potential Legal Ramifications and Antitrust Concerns

The magnitude of the VMware price increase has raised concerns about potential antitrust violations. The significant jump in licensing costs could limit competition and stifle innovation within the virtualization market. Regulatory bodies, including the U.S. Department of Justice and the European Commission, might investigate this price increase to determine if it constitutes anti-competitive behavior.

• Discussion of potential antitrust violations: The sheer scale of the increase raises serious questions about whether Broadcom is leveraging its market dominance to artificially inflate prices.
• Mention any regulatory bodies that might investigate the price hike: Several regulatory bodies in various jurisdictions are likely monitoring the situation closely and could launch formal investigations.
• Mention any past precedents related to similar cases: While this case has unique aspects, there are historical precedents involving antitrust scrutiny of large tech companies and significant price increases for essential software.

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Long-Term Implications for Businesses and the Tech Industry

The Broadcom VMware price hike has far-reaching implications. It could trigger a wave of similar price increases from other software vendors, forcing businesses to reassess their IT budgets and long-term software strategies. The increased cloud computing costs resulting from this price hike may also accelerate the adoption of alternative technologies and strategies.

• Potential impact on cloud computing costs: VMware is a cornerstone of many cloud computing infrastructures. This price increase is likely to ripple through cloud service pricing models.
• Potential for similar price hikes from other software vendors: This could signal a trend toward significantly higher software licensing costs across the industry.
• The effect on IT budgets and business planning: Companies will need to re-evaluate their IT budgets and potentially explore alternative virtualization solutions, open-source alternatives, or more strategic cloud usage.

Related Keywords: Cloud computing costs, enterprise software future, IT budget planning, software licensing costs

Conclusion

Broadcom's unprecedented VMware price increase—a staggering 1050% for some—has sparked significant controversy, with AT&T leading the charge in expressing strong opposition. This drastic hike raises serious concerns about potential antitrust violations and its far-reaching consequences for businesses and the entire technology industry. The lack of transparency and the potential for similar price increases from other vendors create uncertainty and necessitate careful planning.

Call to Action: Stay informed about this developing situation and the potential impact of the Broadcom VMware price hike on your business. Monitor news and updates regarding this significant pricing change and consider alternative virtualization solutions if needed. Understanding the implications of this significant VMware price increase is crucial for effective business planning and cost management.