Broadcom’s licensing clampdown: Subscription-less VMware users face legal ultimatum

Perhaps most concerning for enterprises, some organizations have reported receiving these legal threats even after completely migrating away from VMware technologies. One user on Reddit described receiving a cease-and-desist letter despite having already transitioned entirely to Proxmox, raising questions about Broadcom’s tracking capabilities and enforcement criteria.

The notices universally include audit threats, with Broadcom asserting it “may exercise its right to audit Customer as well as any other available contractual or legal remedy” against companies it suspects of non-compliance.

“The audit threat is particularly problematic,” said a CIO of an Indian Bank, who requested anonymity due to ongoing negotiations with the company. “Even if you’ve done nothing wrong, an audit requires significant resources to prepare for and respond to.”

Experts suggest Broadcom is testing expansive interpretations of intellectual property rights that could establish new industry precedents

“If left uncontested, this action could trigger new legal precedents around the enforceability of licence terms long considered dormant,” Gogia warned.

C-suite crisis management

The enforcement campaign comes amid Broadcom’s controversial restructuring of VMware’s business model, which eliminated perpetual licenses and increased subscription costs substantially for customers. Many companies have switched to competitors, citing higher cost and “not-so-friendly” practices by Broadcom.