Broadcom’s Acquisition of VMware – It’s Worse Than You Think: Part 2 of 2

In Part 1 of our 2-part series, we examined the sweeping software licensing changes that tech giant Broadcom put into place after its $61 billion acquisition of VMware in late 2023. Broadcom’s elimination of perpetual licenses along with a sudden shift to bundled subscription offerings created the perfect storm of uncertainty and fear in the market because of Broadcom’s new software licensing compliance tactics. These changes have significantly affected organizations that rely on VMware software and have increased concerns about software licensing compliance, contract renewals, and long-term IT planning. And those new software licensing compliance tactics certainly deserve your company’s attention, if you are to weather the storm.

In Part 2, we discuss Broadcom’s aggressive approach to software licensing enforcement in the form of high-profile legal battles and what your company should be doing to protect itself.

Be Aware! The Litigation Risk is Real

Regarding threatening and even launching litigation, Broadcom stands out as a software license vendor. In our experience, most vendors shy away from litigation. In stark contrast, Broadcom is approaching software licensing enforcement more aggressively and without any discernible hesitation to enter litigation. Broadcom’s aggressive approach has led to multiple lawsuits involving enterprise customers related to its acquisition of both VMware and CA Technology.

There have been at least three sizable litigations spanning the last 2-3 years that have centered around the fallout from Broadcom’s acquisition of VMware and CA. These cases illustrate the legal and business risks organizations may face when negotiating VMware subscription renewals, software support, and licensing rights following the acquisition. We briefly discuss these below.

Fidelity Investments:

• Fidelity filed suit November 3, 2025, accusing Broadcom of threatening to terminate VMware access and arguing that two years (or less) were needed for migration away from VMware virtualization software.
• Fidelity sought to renew its subscription to VMware virtualization software after Broadcom’s acquisition and claimed that Broadcom refused.
• Fidelity moved to voluntarily dismiss the lawsuit in January 2026 after Broadcom agreed to a continuation of services and software.

UnitedHealthcare:

• After UnitedHealthcare met with Broadcom to discuss CA mainframe software renewals in March 2025, UnitedHealthcare submitted a renewal order only to be notified of contractual violations a week later.
• A week after that – and with CA software licensing scheduled to expire – Broadcom extended the license expiration until April 18, 2025 for negotiations.
• UnitedHealthcare filed a complaint a few days later, alleging breach of contract and claiming that a transition to alternative mainframe software would take years. It claimed that Broadcom threatened UnitedHealth with higher prices if UnitedHealth tried to enforce contractual rights through litigation.
• The complaint also alleged significant VMware software price increases. The case is still active with no preliminary injunction hearing scheduled yet.

AT&T:

• AT&T filed suit August 29, 2024, accusing Broadcom of seeking to “retroactively change existing VMware contracts to match its new corporate strategy” and saying this violates its pre-acquisition contractual rights.
• AT&T claimed that Broadcom demanded AT&T purchase unwanted, bundled VMware software subscriptions/services and refused to honor VMware support services renewal rights that were set to expire September 8, 2024.
• The complaint claimed Broadcom threatened to cut off essential support for thousands of VMware virtual machines running AT&T’s infrastructure unless AT&T agreed to the new licensing terms – potentially jeopardizing network stability and services.
• In November 2024, AT&T and Broadcom reached a confidential settlement-in-principle.

In addition to these matters, there are at least three additional litigations that reflect Broadcom’s post-VMware approach to software licensing, contract enforcement, and customer negotiations:

• VMware v. Siemens. Ongoing matter regarding VMware’s allegations that Siemens unlawfully sought support for unlicensed VMware software.
• State of the Netherlands v. VMware. Facing a sharp increase in renewal fees, the executive arm of the Ministry of Infrastructure and Water Management in the Netherlands decided to de-platform VMware and requested a two-to-three-year extension to allow time for the transition. Broadcom refused. In the summer of 2025, the Hague District Court entered an order finding that Broadcom breached its duty of care by failing to provide adequate exit support for systems managing vital national infrastructure. The Court ordered that Broadcom must provide maintenance updates, bug fixes, and technical assistance for two years, facing extensive penalties (€250,000 per day up to €25 million maximum) for non-compliance.
• Tesco v. Broadcom. Tesco initiated legal action against Broadcom, VMware, and Computacenter alleging that Broadcom refused to honor a contract that gave Tesco the option to acquire software at predetermined prices and ongoing software support services. Tesco seeks at least £100 million in damages, claiming Broadcom’s licensing changes violate contractual renewal rights for perpetual licenses purchased in 2021.

What Should Your Company Be Doing?

Considering the sudden and unpredictable risk engendered by Broadcom’s acquisition of VMware and CA, organizations should proactively review their VMware licensing strategy, contractual rights, and software asset management practices. The time to put in place policies and procedures is now.

Here are a few thoughts on how to approach the turbulent waters ahead:

Involve counsel early on. Early legal review can help preserve contractual rights, reduce licensing risk, and improve negotiating leverage.

Assess your options now. If you have term licenses or support contracts, do not wait until the eve of their expiration to review your options. Broadcom negotiations move fast and are laden with landmines. Figure out what your company needs and wants with plenty of time to put a plan in action. Organizations should also evaluate migration timelines, renewal strategies, and potential alternatives before entering negotiations.

Do not sign anything without extensive review. Broadcom has put in place a myriad of proffered agreements that are geared towards terminating perpetual licenses and inserting other unfavorable and highly burdensome terms. It takes time and experience to ensure your rights are preserved when entering into an agreement of any type. Careful contract review can help identify changes affecting perpetual licenses, subscription terms, software support obligations, audit rights, and pricing commitments.

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As always, feel free to reach out to us. We are always interested in hearing from our friends and colleagues regarding their experiences and sharing what we have seen. We also welcome questions about VMware licensing, Broadcom contract negotiations, software audits, and related compliance concerns.

In the interim, stay safe out there. The risk is real!

(Note: Please click here to read Beeman & Muchmore's Part 1 of 2 blog on Broadcom's acquisition of VMware.)

Published on March 23, 2026