Thought Leadership
The US telecommunications group AT&T is making serious allegations against Broadcom, which acquired the software company VMware in 2022. The dispute centers on a price increase of 1050 percent for VMware products, as reported by TheRegister.
AT&T claims Broadcom is not honoring an existing contract that guarantees the telecommunications company two additional years of support services for VMware products. In an email to Broadcom CEO Hock Tan submitted as part of the lawsuit, AT&T Executive Vice President and General Manager Susan A. Johnson called the proposed price increase “extreme” and inconsistent with a strategic partnership.
AT&T now faces the challenge of possibly switching from VMware products to alternative solutions. However, this process is proving to be complex and costly. Gordon Mansfield, vice president of global technology planning at AT&T, estimates that simply selecting an alternative and preparing it for testing could take up to a year. The complete migration could even take years. Particularly explosive is the accusation that Broadcom might prevent other providers from selling certain products to AT&T, which would make it more difficult to switch to alternatives.
Meanwhile, Broadcom argues that AT&T is making extensive use of outdated and no longer supported VMware software. David J. Brickhaus, Vice President at AT&T, refutes this claim. He admits that only three percent of servers that do not host business-critical software are running older versions.
The legal dispute between AT&T and Broadcom is therefore coming to a head. The industry is following the case with great interest, as it could have far-reaching effects on future business relationships and pricing.
