Broadcom Software (CA) Mainframe Licensing
Broadcom’s 2018 acquisition of CA Technologies transformed the landscape of mainframe software licensing for enterprises. CA’s tools – spanning database management, system monitoring, security (ACF2, Top Secret), DevOps (e.g., Endevor), and workload automation (CA 7) – are now under Broadcom’s control.
CIOs at global and mid-sized enterprises must navigate new licensing strategies, pricing models, and vendor dynamics that emerged post-acquisition. This playbook provides a comprehensive guide for managing Broadcom (CA) mainframe software licenses.
We cover Broadcom’s post-acquisition behavior, negotiation tactics for multi-year deals, contract due diligence steps, SAM (Software Asset Management) best practices, comparisons with IBM and BMC alternatives, strategies to leverage competition, planning coexistent transitions, and recommendations for budgeting through 2025–2027.
Use this as a roadmap to optimize costs and maintain leverage in a changing mainframe software market.
Broadcom’s Post-Acquisition Licensing Behavior
Aggressive Enforcement & Price Increases: After absorbing CA, Broadcom adopted a markedly more aggressive stance on licensing and renewals. Multiple large customers have reported steep price hike demands at renewal, sometimes with increases of several hundred percent.
For example, UnitedHealthcare alleges that Broadcom demanded “hundreds of millions of dollars” more for the same CA software they had used for years.
Broadcom has shown a willingness to enforce contract deadlines strictly, even threatening to cut off access to mission-critical software if new terms (with higher fees) are not accepted.
This hardball approach is far from CA’s earlier, more relationship-driven style and has strained vendor relationships. CIOs now face a vendor that is unapologetic about leveraging customer lock-in for profit growth.
Pricing Standardization and “Cash Cow” Strategy: Broadcom’s model emphasizes maximizing the long-term’ share of wallet” from its largest customers. Post-acquisition, Broadcom moved to standardize pricing and eliminate deep legacy discounts that CA may have granted.
Many organizations that enjoyed custom deals from CA have seen Broadcom align them to a higher baseline price or offer fewer discounts, which boosts Broadcom’s margins. Broadcom’s standard contract terms often include predetermined annual uplift clauses (e.g., up to 7% yearly increase), indicating a strategy of routine price escalations.
This systematic approach treats mainframe software as a “cash cow”, focusing on highly regulated, risk-averse customers who are unlikely to switch. Broadcom’s executives have stated they prioritize roughly 600 top-tier accounts and are content to let smaller customers go.
In practice, this means that mid-sized enterprises may receive “take it or leave it” offers with little to no flexibility. In contrast, large global enterprises face pressure to accept significant increases unless they have protective terms in place. The result is pricing standardization at higher levels across the CA portfolio, along with a shift toward multi-product, high-value deals.
Product Bundling & Reduced Sales Support: Another hallmark of Broadcom’s post-CA behavior is an emphasis on bundling products and services. Broadcom often seeks to bundle renewals of CA software with other Broadcom offerings – even ones a customer neither wants nor uses. This bundling strategy can force clients into buying unwanted add-on software to continue receiving updates or support for the products they do need.
For instance, Broadcom has required some customers to upgrade to broader (more expensive) software suites or include additional tools as part of renewal, rather than allowing á la carte product renewals. This tactic not only raises costs but can also lead to paying for shelfware (unused licenses) just to maintain access to critical features.
At the same time, Broadcom drastically cut CA’s sales and support staffing after the acquisition, reducing personal account management. Many enterprises report that customer service quality declined , with fewer account reps and less negotiation leeway.
Broadcom’s focus is on efficiency and profitability, which, for customers, means price increases and potentially less support, in the words of one industry CEO. CIOs should be prepared for a tougher stance from Broadcom on contract enforcement and less proactive engagement on their account, especially if they are not among Broadcom’s largest clients.
Negotiating Enterprise-Wide Multi-Year Agreements
Rationale for Multi-Year Portfolio Deals: Given Broadcom’s pricing tactics, negotiating a multi-year, enterprise-wide license agreement (ELA) is one of the most effective strategies to secure pricing stability and discounts.
Rather than allowing each CA product to renew separately (with each exposure to potential hikes), CIOs should pursue a consolidated deal that covers the entire CA/Broadcom mainframe portfolio for a period (e.g., 3 to 5 years).
A portfolio ELA creates a larger, more strategic contract, which makes it harder for Broadcom to compete to win or retain, and thus unlocks higher discount tiers in many cases. It also locks in pricing for the term, shielding the organization from annual list price increases beyond any negotiated uplifts.
Many savvy customers anticipated Broadcom’s playbook and signed 3–to 5–year agreements before the acquisition close or renewal deadlines, buying themselves time and price protection. This approach can avoid the shock of 5x-10x cost surges that some experienced on annual renewals post-acquisition.
Benefits of Alignment and Bundling: When negotiating a multi-year deal, aim to co-term all CA product licenses to a single renewal date. This prevents Broadcom from picking off renewals one by one at different times, when your leverage is lower.
Instead, a single expiration concentrates your leverage – Broadcom will know you could potentially switch multiple products at once if unsatisfied, which they will want to avoid. Enterprise-wide commitments also let you leverage “bundled” discount structures legitimately in your favor: By committing to a broad set of products (e.g., database tools + monitoring + security together), you can often meet higher spend thresholds that qualify for volume discounts or more favorable price metrics.
For example, bundling CA 7, ACF2, and IDMS into a single deal may achieve an overall percentage discount that wouldn’t be possible if each were negotiated separately. Additionally, spreading cost increases across a bundle can give you the flexibility to allocate spend where it is most needed, while keeping the total contract value within budget expectations.
Avoiding Staggered Renewals: Staggered, product-by-product renewals are risky in the Broadcom era. A CIO playbook should include explicitly avoiding fragmented renewal schedules:
- Co-Term Agreements: If your current CA/Broadcom licenses don’t align in time, request a co-termed renewal. This might involve extending some licenses slightly or entering short bridge contracts so that all expire together. The goal is a single negotiation event rather than perpetual, piecemeal negotiations.
- Renew Early If Needed: If a particularly critical product’s contract is due sooner than others, consider renewing or extending it early to align with a larger deal. While you may pay a bit extra in the short term, it prevents you from being left with one product out of cycle (which Broadcom could exploit by imposing a big increase, knowing you can’t easily drop it).
- Lock in Renewal Caps: In multi-year negotiations, insist on caps for renewal rate increases for any optional extension years or renewal after the term. For instance, negotiate that maintenance or subscription renewal rates cannot increase more than, say, 3% per year (lower than Broadcom’s standard 7% cap). Baking such protections into the contract will hedge against future Broadcom pricing behavior if you continue beyond the initial term.
Enterprise Commitment Trade-offs: Entering a broad, multi-year ELA with Broadcom means committing significant spending and potentially standardizing on Broadcom for a few years. CIOs should weigh:
- The immediate cost savings (through bigger discounts and avoidance of extreme hikes) are offset by the flexibility they give up (it’s harder to drop or swap out a product mid-term).
- Ensure the agreement includes provisions for adding new licenses at the same discounted rates, so you don’t face a fourfold increase for incremental needs mid-term.
- Where possible, include a “transferable spend” clause: if you choose to stop using one product in the portfolio, you can apply its value to another Broadcom product. This isn’t standard, but in some enterprise deals, vendors allow a degree of shifting entitlements across products to account for changing needs.
In summary, consolidation is leverage. A multi-year enterprise-wide contract leverages your full Broadcom portfolio footprint to negotiate from a position of strength – it secures better pricing, guards against ad-hoc hikes, and streamlines vendor management by having a single master agreement.
Contract Due Diligence and Legacy Terms Verification
Audit Your Legacy CA Contracts: Before entering into any negotiations or renewals with Broadcom, CIOs must carefully audit all existing CA contracts, amendments, and order forms. The goal is to identify any legacy terms that can protect you or that Broadcom must honor.
Key items to verify include:
- Renewal Rights and Caps: Does your original CA contract offer a renewal term or extension at a fixed price or with a capped increase? Many CA agreements had clauses allowing renewal at the “same terms” or with an inflation cap. For example, UnitedHealthcare’s contract provided certain pricing protections on renewal, which Broadcom initially disregarded. If such terms exist, document them clearly as your defense against any breach of contract. Enforce those rights – Broadcom is legally bound to them as the assignee of the CA contract.
- Discount Levels: Note the discount percentages or special pricing you had with CA. Broadcom inherited the contract obligations and should honor those negotiated discounts for the life of the agreement. If your records show a 50% discount off the list price on a product, ensure that any quotes from Broadcom continue to reflect this baseline (adjusted only for allowed increases).
- Entitlements and Bundled Rights: Check if you have entitlements, such as unlimited usage of specific components, grandfathered pricing, or bundled products included at no additional cost. Under CA, you might have had, for instance, a dev/test environment license bundled for free with a production license – verify that Broadcom continues this practice. List out all such entitlements so none “disappear” during contract transfer.
Assignment and Reassignment Validation: Broadcom’s acquisition triggered the assignment of CA’s contracts to Broadcom (typically to CA Inc., now a subsidiary of Broadcom). It’s important to obtain written confirmation of this assignment and that all terms “survive” the change:
- Locate any assignment notices from CA/Broadcom around 2018–2019 that were sent to your legal or procurement department. If you cannot find one, proactively reach out to Broadcom for an official letter confirming that your contract dated XYZ with CA is now assumed by Broadcom under the same terms.
- Review the assignment clause in your CA contracts. Most contracts allow assignment in the event of acquisition. Ensure no terms were violated in that process (e.g., if consent was required, was it obtained or waived appropriately?).
- Have your legal counsel review the Broadcom standard “Foundation Agreement” or the new EULA if Broadcom asks you to sign one. Compare it side by side with your CA agreement. Note any differences, for example, Broadcom’s standard EULA allows up to a 7% annual fee hike, which might be less favorable than your CA terms. You may be able to resist signing new terms that remove protections you previously secured. Engage with Broadcom to confirm that existing entitlements remain in effect, even if new paperwork is required.
Ensuring Legacy Terms are Honored: Broadcom may push customers to transition to its updated licensing models or combined agreements. While it’s often acceptable to sign an updated agreement for administrative convenience, do not concede legacy benefits.
Insist on contract language (or an addendum) that explicitly carries forward your prior discounts, price locks, and usage rights. If Broadcom’s proposal omits these, treat it as a red flag and negotiate to have them inserted. In cases where Broadcom refuses to honor a clear term, be prepared to escalate the issue with the help of legal counsel.
As seen in recent litigation, courts have been sympathetic to customers on this point, even issuing injunctions to prevent Broadcom from terminating licenses in violation of the contract. The mere willingness to cite your contract chapter-and-verse (and mention those high-profile lawsuits) can pressure Broadcom’s negotiators to fall back in line. Document every communication where you assert your contractual rights.
Contract Reassignment Checklist: To streamline this due diligence, follow a checklist approach:
- Collect Documents: Gather all CA contracts, addenda, product schedules, proofs of entitlement, invoices, and any communications about the assignment.
- Extract Key Terms: For each product or license, note the term end date, license type (perpetual vs. subscription), metric (e.g., MIPS, MSUs, CPU), price, discount percentage, renewal options, and any special provisions (e.g., caps, bundling, transfer rights).
- Verify Assignment: Locate the assignment notice from Broadcom; if missing, request one. Ensure the notice states that all existing customer rights continue under Broadcom.
- SAM & Legal Review: Involve your SAM team and legal counsel to verify usage against entitlements (so you know if you’re under- or over-licensed) and to interpret any ambiguous clauses. For instance, legal can clarify if a “most favored customer” clause or price hold applies.
- Engage Broadcom Early: Well before renewal, send Broadcom a summary of your understanding of the contract terms that should govern renewal (e.g., “According to Section X, we have the right to a 1-year renewal at prior rates.”). Getting their written acknowledgment (or any disagreement) in writing before the eleventh hour is critical. This sets a factual basis and can help resolve any potential conflicts.
By performing thorough contract due diligence, CIOs can approach Broadcom negotiations armed with facts and contractual backing.
Do not rely on Broadcom to automatically apply your old terms correctly – make it your responsibility to uphold them. As industry advisors warn, it’s vital to “confirm your renewal rights and pricing protections for upcoming renewals” well in advance.
Software Asset Management (SAM) Best Practices for CA/Broadcom Software
A robust Software Asset Management program is indispensable when dealing with evolving licensing under Broadcom. Changes like product bundling or new metrics can lead to confusion and unintended cost unless you have a precise handle on your usage.
Here’s how CIOs should employ SAM to control Broadcom (CA) license costs:
- Conduct a Fresh Inventory: Perform a comprehensive inventory of all CA/Broadcom software deployed across your mainframe environment, including any distributed systems where CA products are used. Identify every instance, version, and usage metric (e.g., MIPS consumption, user counts) for products such as CA 7, ACF2, Top Secret, Datacom, IDMS, Endevor, SYSVIEW, etc. Leverage automated discovery tools or Broadcom’s asset management agents to ensure nothing is overlooked. This inventory provides a clear picture of what you have versus what you’re entitled to.
- Map Usage to Entitlements: For each inventoried product, map it to the licenses and capacity you’ve purchased. SAM tools can help flag any over-deployment or under-deployment. For example, if you own CA ACF2 for 5 LPARs but it’s installed on 6, you have a compliance gap. Conversely, you might find you’re licensed for more capacity (e.g., MSUs) than you use, indicating potential to reduce licenses at renewal. Tracking this ensures you’re aware of compliance status before Broadcom possibly audits or uses it as leverage.
- Identify Overlap and Redundancy: Mainframe environments often have overlapping tools, sometimes due to past acquisitions or siloed departments. As part of SAM, identify if you have multiple tools serving the same function. For instance, one business unit may use CA Endevor for source control, while another has adopted an open-source Git-based pipeline for mainframe DevOps. Alternatively, you might be running both CA SYSVIEW and IBM OMEGAMON for performance monitoring. Catalog these overlaps and assess if all are truly needed. Eliminating one in favor of a standard tool can save on licensing and support costs. Broadcom’s bundling of CA products might also have introduced functionality you already get elsewhere. E.g., a Broadcom bundle might include a monitoring component you don’t need because you use BMC MainView. Recognize those overlaps to avoid paying twice.
- Spot “Shelfware”: Use SAM data to identify any CA/Broadcom software that is installed but not actively used, or licenses purchased that remain unused in production (also known as shelfware). Common culprits may be development tools, optional modules of a suite, or legacy products that are still licensed “just in case.” For example, you might find that you have licenses for CA Datacom at a remote data center that has been decommissioned, or a workload automation module that hasn’t been used for jobs in a year. Identify these and quantify their maintenance costs. This prepares you to potentially reclaim value by discontinuing them at renewal or leveraging their cost in negotiations (“We can drop the X product if the pricing isn’t favorable”).
- Monitor Usage Trends: Beyond a static inventory, track usage trends over time, especially for capacity-based licenses. Broadcom’s mainframe pricing can depend on metrics like peak MSU (million service units) consumption. Use tooling (Broadcom offers tools like CA MICS Resource Management, or IBM’s SCRT reports) to see if your usage is rising, stable, or declining. If you plan to reduce your mainframe workload (e.g., offloading some apps to distributed or cloud environments), project how that affects your license needs. Document any planned reductions to negotiate lower usage-based fees. Conversely, if growth is expected, prepare to discuss additional capacity licenses – but aim to obtain them at the old pricing through your current contract, if possible (i.e., ensure the price remains stable for additional licenses to avoid four times the original cost).
- Optimize and Re-harvest: Engage the technical teams to optimize use. For instance, if you have MIPS or MSU licenses, tactics like workload capping or tuning could lower peak usage and save costs under sub-capacity pricing. If user counts matter, ensure dormant users are removed. Free up licenses by cleaning up, then see if you can reduce your license counts at renewal or repurpose them for another area that needs them (instead of buying new ones). Broadcom’s new Mainframe Consumption Licensing (MCL) model could be explored if your usage is highly variable – SAM data will tell you if a consumption (pay-per-use) model is more cost-effective than a fixed-capacity model.
- SAM Team Coordination: The SAM team should work closely with procurement and IT operations during Broadcom negotiations. Baseline data from SAM can counter vendor claims. If Broadcom says, “You need to buy 30% more capacity,” you can respond with empirical data showing stable utilization. Likewise, if Broadcom bundles an unwanted component, you can show you already have alternative tools (or lack usage of that component) to push back on its inclusion. A well-informed position grounded in SAM analytics strengthens your hand significantly.
- Prepare for Audits: Broadcom, like CA, reserves the right to audit its contracts (e.g., with 30 days’ notice). A strong SAM practice means you won’t be caught off guard. Simulate an internal audit: ensure proof of licenses is in order and deployment matches entitlements. If any compliance gap is found, decide whether to self-cure (e.g., uninstall or purchase additional licenses quietly) or disclose and negotiate a resolution. Avoiding a formal audit is ideal – they can be disruptive and potentially costly if findings are severe. Proactively fixing issues deprives Broadcom of a chance to levy back charges or force an upsell at high rates.
In essence, SAM is about knowledge and control. With an up-to-date inventory, clear usage visibility, and understanding of what you need (and don’t need), CIOs can approach Broadcom from a position of strength. This information will inform both negotiating the right license scope and considering any moves to alternative solutions.
Competitive Landscape: IBM and BMC Alternatives to CA Tools
Broadcom’s hardball tactics make it imperative to evaluate alternative vendors for each major software domain in CA’s mainframe portfolio. IBM, the mainframe OEM, and BMC, a leading third-party mainframe software provider, are the primary competitors in these spaces, each offering products that can replace or complement CA solutions.
By understanding these alternatives, CIOs can both improve their negotiation leverage with Broadcom and craft contingency plans for critical tools.
Below is a comparison of key product domains:
- Performance & Monitoring Tools: For mainframe performance monitoring, CA’s offerings, such as CA SYSVIEW, CA Mainframe Performance Management, or NetMaster for networks, compete with IBM and BMC. IBM provides the IBM OMEGAMON family, part of IBM Tivoli Monitoring for z/OS, which covers resource monitoring, performance tuning, and automation on IBM systems. BMC offers the BMC MainView suite and newer BMC AMI Ops (Automated Mainframe Intelligence) for comprehensive monitoring and operational analytics. These tools are roughly equivalent in functionality – all provide metrics for z/OS, CICS, DB2, IMS, and more, along with real-time dashboards and historical analysis. Some enterprises also use independent solutions, such as IntelliMagic or MVP software, for niche performance analysis. Consideration: If Broadcom hikes CA Sysview costs, you could leverage IBM, especially if you already license other IBM tools under a larger agreement, or BMC, which often pitches cost savings. BMC, in particular, has positioned itself as a “safe pair of hands” for former CA customers, highlighting its 24/7 support and continued R&D in mainframe operations. BMC openly markets to CA clients in “uncertain times” post-acquisition as a stable alternative. Feature-wise, all major vendors cover the bases, though switching monitoring tools entails re-training operations staff and converting any custom dashboards or automation scripts.
- Security & Compliance: CA Technologies was a leader in mainframe security with CA ACF2 and CA Top Secret, which are external security managers (ESMs) that control access to z/OS resources. The primary alternative is IBM’s RACF (Resource Access Control Facility), which is IBM’s native security subsystem for z/OS. Typically, a mainframe uses either RACF or one of the CA solutions as its security brain; they fulfill the same roles of user authentication, authorization, and logging. Many organizations have historically chosen CA ACF2/Top Secret for specific features or legacy reasons. Still, IBM RACF is now the more common default, and it is often included with z/OS in many cases. There is no direct BMC equivalent in this security manager space. BMC does not offer an ESM product, although it provides related security tools, such as BMC AMI Command Center for security and compliance reporting.Additionally, BMC partners with IBM or CA solutions. Migration Consideration: Moving from CA ACF2/Top Secret to IBM RACF is possible – IBM and services firms offer migration toolkits to translate rules and databases, but it is a major project that touches every system permission. Still, some have done it to eliminate third-party license fees. Example: If Broadcom dramatically raises the Top Secret maintenance cost, a CIO could evaluate shifting to RACF (which might involve a one-time migration cost but no ongoing third-party fee thereafter). In negotiations, pointing out that RACF is a viable (and vendor-supported) alternative can be a credible threat, since Broadcom knows a determined client can convert given enough time. Additionally, ensure Broadcom’s quote for security products accounts for competition; note that some IBM mainframe packages may bundle RACF at attractive rates if you commit to IBM’s broader software portfolio.
- Database Management Tools: CA’s portfolio includes database management systems and tools, such as CA IDMS (a network/IDMS database), CA Datacom (another non-relational DBMS), and a suite of DB2 and IMS tools, including CA Database Analyzer and CA Detector for DB2 performance, among others. IBM, of course, offers the databases themselves (DB2 for z/OS, IMS) and related utilities. At the same time, BMC has a strong line of DB2 and IMS management tools, including the BMC AMI Database suite and products such as BMC Catalog Manager and BMC Change Manager for DB2. For CA’s proprietary databases, IDMS and Datacom are legacy products with a niche but critical presence in some enterprises, often in government and finance. Alternatives here would be migrating to IBM Db2 or other modern databases. For instance, an IDMS application might be re-engineered to use Db2 (or even moved off mainframe to Oracle, etc.), and Datacom, similarly, could be retired in favor of Db2 or IMS. However, such migrations are non-trivial – these databases often underlie decades-old core applications. BMC doesn’t offer an IDMS replacement, but vendors like Software AG (with Adabas/Natural) or modernization firms can sometimes step in if you’re moving away from CA’s DBMS. For CA’s tools that manage IBM databases, such as CA’s DB2 performance tools, both IBM and BMC provide alternatives. IBM has its native tools, such as Db2 Performance Monitor, Query Monitor, and OMEGAMON for Db2, which may be licensed with Db2. BMC’s DB2 management tools are often highly regarded and sometimes more feature-rich than those of CA. BMC’s acquisition of Compuware enhanced its development and test database tools. Negotiation Tip: If you heavily use CA’s DB2 tools, you can solicit proposals from BMC for equivalent functionality; BMC often promises smoother integration with their MainView monitoring and can potentially undercut CA’s price for those tools.Meanwhile, if you’re one of the shops using IDMS or Datacom, you have a stronger vendor lock — Broadcom knows switching off those is a long game (years). You might instead negotiate a longer-term deal for those specific products or look for maintenance-only pricing (since there’s likely no new development on them). Push back on any large increase by highlighting the risk that you’ll start an exit plan (even if it’s multi-year) to migrate away.
- Workload Automation (Job Scheduling): CA 7 Workload Automation is a widely used mainframe job scheduler (originally known as CAScheduler). CA also offers CA ESP (another scheduler) and, on distributed systems, CA Autosys. However, focusing on the mainframe, BMC Control-M is the most direct competitor to CA 7. Control-M, from BMC, is an industry-leading enterprise scheduler that spans mainframe and distributed environments and is a common alternative in mainframe shops. IBM has its IBM Z Workload Scheduler (formerly known as Tivoli Workload Scheduler or OPC), which is another scheduling product available on z/OS. Many large enterprises schedule batch jobs via either CA 7, Control-M, or IBM’s scheduler. These tools all achieve similar goals, such as triggering jobs based on time or events, and managing job dependencies, but each has different scripting and definitions. Migration Feasibility: Moving from CA 7 to BMC Control-M is quite feasible with the right support – BMC often provides utilities or services to convert CA 7 job definitions into Control-M format. Similarly, migrating to IBM’s scheduler is possible, but perhaps less common, since Control-M has been aggressively marketed as a replacement for CA 7 in many cases. If Broadcom’s licensing for CA 7 becomes too onerous, bringing in BMC for a competitive bid is a strong option – BMC may offer attractive pricing and even transition services, as winning a replacement deal from Broadcom is a strategic win for them. Some organizations adopt a dual-vendor scheduling strategy as a transition, e.g., starting to run new workloads on Control-M while phasing out CA 7 over a year or two. During negotiations, demonstrating that you already have Control-M (even in a limited capacity) or that your team is training on it can signal a credible intent to switch. Because scheduling is so mission-critical (controlling nightly batches, etc.), Broadcom will be keen to avoid losing that footprint – using it to negotiate better terms or at least a commitment that they won’t arbitrarily hike prices beyond agreed-upon limits.
(Additionally, CA offers DevOps and change management tools like CA Endevor for mainframe source code management. The main competitors there are BMC, Compuware, ISPW, and Micro Focus ChangeMan, as well as newer Git-based pipelines with tools like IBM UrbanCode or Zowe integration. If Endevor licensing becomes an issue, note that BMC has integrated ISPW into its BMC AMI DevX suite as a modern alternative. The effort to switch SCM tools is significant – converting source repositories and build processes – but not impossible. Many mainframe dev shops are exploring modern DevOps which could either increase reliance on Broadcom’s tools (like Endevor, if kept) or involve replacing them with open-source driven workflows.)
Competitive Positioning: It’s worth noting that IBM and BMC both sense opportunity in Broadcom’s CA customer base. BMC, for example, acquired Compuware in 2020 to strengthen its mainframe portfolio and specifically targets CA customers seeking continuity.
IBM, on the other hand, often leverages its account relationships (as a hardware provider) to offer deals on software when third-party contracts are up for renewal. Industry data suggests that around fiscal year-end for CA/Broadcom (traditionally March), IBM and others ramp up “replacement” offers for customers considering a switch.
This means if you signal to IBM or BMC that you are unhappy with Broadcom, you may receive aggressive pricing or migration incentives to move to their platforms. These could include credits, free migration services, or bundling into existing agreements (for example, adding an IBM tool into your IBM MLC bill at a discount).
Use this competitive dynamic to your advantage – even if you ultimately stay with Broadcom, having a concrete alternative quote or migration plan from a competitor can heavily influence Broadcom’s offer.
Leveraging Alternatives to Improve Negotiating Leverage
One of the strongest cards a CIO can play in Broadcom license negotiations is a credible threat to move to an alternative solution.
Broadcom’s strategy relies on customer reluctance to change. Demonstrating that your organization has both evaluated and is willing to switch vendors undermines that assumption and pressures Broadcom to be more reasonable. Here’s how to strategically leverage alternatives:
- Perform Benchmarking/RFPs: Proactively engage in a benchmarking exercise or even a formal RFP for the mainframe software domains under Broadcom. For example, solicit input from BMC on what a migration from CA 7 to Control-M would entail and its associated costs, or ask IBM for a proposal to replace CA security with RACF, including any required services. Even if you don’t issue a full RFP, getting written estimates or trial licenses from competitors will give you hard numbers to compare. If BMC says they can replace your CA suite at 30% lower cost over 5 years, that’s powerful data to bring up with Broadcom (whether you share the exact figure or not). It also educates your team on the effort required, making the threat more credible because you understand what it takes.
- Build an “Exit Plan”: Develop an internal exit strategy document for each major Broadcom product. This plan would outline how long it would take, what resources are needed, and what the steps are to migrate to an alternative. For instance, an exit plan for CA Top Secret might say: “Migrate to RACF over 24 months, using vendor X’s migration toolkit, with Y internal FTEs and Z consulting cost, target completion by Q4 2026.” By having this, you can confidently tell Broadcom, “We have a transition plan and are prepared to execute it if needed.” The more concrete the plan, the more Broadcom must consider the real risk of losing your business. Importantly, involve stakeholders in creating these plans (operations, security, and application owners) so that they are feasible. This exercise also uncovers any hidden dependencies that Broadcom might assume keep you stuck; addressing those reduces true switching costs.
- Leverage Partial Moves (Dual Vendor): Even if you cannot switch everything away from Broadcom at once, consider a partial move or dual-vendor approach to show you’re not wholly dependent. For example, start using BMC’s Control-M for new cloud workloads or non-mainframe scheduling, or implement IBM’s OMEGAMON for monitoring alongside CA SYSVIEW. If Broadcom knows you already use a competitor in some capacity, it signals that extending that competitor to replace Broadcom entirely is not far-fetched. Some organizations adopt a strategy of “parallel running”: they license the alternative tool in parallel to Broadcom’s tool (perhaps in a smaller environment or for a subset of systems) as a pilot. This investment can pay off by increasing negotiating leverage – Broadcom will see that the alternative is operational and could be scaled up. Yes, running two tools means temporary cost duplication, but it can be a tactical investment to either enable a future cut-over or to gain immediate bargaining power.
- Use Timing to Your Advantage: Ideally, line up your engagement with alternatives well before your Broadcom renewal is due. If Broadcom senses you are scrambling last-minute, they may call your bluff. But if six months out, you are already testing a BMC tool, that seriousness is hard for Broadcom to ignore. Additionally, try to get any alternative quotes valid through your decision point around renewal time. Having a firm offer from BMC or IBM that coincides with Broadcom’s renewal deadline means you can immediately execute the alternative if Broadcom doesn’t come to an agreeable terms. Broadcom negotiators are trained to discern real threats from empty ones – having aligned timing and concrete plans firmly puts you in the “real threat” category.
- Know Broadcom’s Pressure Points: Broadcom cares most about its biggest revenue accounts, but it also doesn’t want negative press or lost deals in key product lines. If your enterprise is sizable, losing you to a competitor, especially in a public way, is something Broadcom will strive to avoid. High-profile departures could encourage others. Therefore, subtly communicate (without overtly threatening) that you are deeply reviewing alternatives and that your executive leadership is concerned about Broadcom’s direction. If negotiation talks stall, you might say, “Our CIO has instructed us to evaluate other vendors due to these pricing issues – we even have a board presentation on alternatives next month.” This often gets Broadcom’s attention to revisit the deal structure. You do not need to (and should not) be hostile; rather, calmly make it clear that all options are on the table.
- Engage Executives and Peers: Sometimes, escalating the negotiation to higher levels can help, especially if you have data on alternatives. If your procurement team is hitting a wall, an executive-to-executive conversation (such as your CIO to Broadcom’s account executive or even a higher-level executive) can underscore that the company is serious about making the switch. Highlight how a fair deal with Broadcom would be mutually beneficial, but that you have a fiduciary duty to consider cost-effective alternatives. Additionally, talk with industry peers (perhaps through user groups or Gartner events) – if others have swapped out Broadcom (CA) products, gather their success stories or lessons learned. Being able to mention, “Several other firms in our industry have migrated off CA 7 to Control-M successfully,” reinforces that switching is viable.
In summary, present Broadcom with a credible competitive threat: genuine alternative solutions, tangible plans to implement them, and the organizational will to follow through.
The goal isn’t necessarily to leave Broadcom – it’s to improve your terms by giving Broadcom a reason to avoid an outcome where you leave. However, you must also be prepared to execute the alternative if Broadcom remains unreasonable. This balanced approach ensures you won’t be left without options.
Transition and Coexistence Planning with Competitor Tools
Suppose the decision is made (now or in the future) to migrate away from a Broadcom (CA) solution to a competitor. In that case, CIOs should ensure a smooth transition plan that minimizes business risk.
Mainframe systems are the backbone of critical processes, so any tool replacement must be handled with care. Below are strategies and considerations for planning coexistence and migration:
- Phased Migration vs “Big Bang”: Opt for a phased transition wherever possible. For instance, if moving from CA 7 to BMC Control-M for workload automation, you might migrate one application or batch subsystem at a time rather than switching all scheduled jobs in one night. Run the new scheduler in parallel with the old for a period to validate that jobs execute correctly. Gradually increase the percentage of workload handled by the new tool until the old one can be retired. This phased approach can also apply to security systems (e.g., running ACF2 and RACF in parallel modes during cutover testing). However, in some cases, such as security or databases, parallel runs can be more complex (you might instead conduct a pilot on a non-production LPAR). Phased migrations allow learning and adjusting as you go, significantly reducing the risk of major outages.
- Data and Configuration Migration: Plan for how to migrate the rules, definitions, and data from the CA tool to the new tool. Each type of software has specific needs:
- Security: If moving from ACF2/Top Secret to RACF, you’ll need to export user profiles, access rules, dataset rules, etc., and import them into RACF equivalents. Tools and services exist to automate much of this process, but extensive verification is still needed to ensure that no permissions are lost or inadvertently changed. Double-run tests, where identical transactions are executed under both security systems to compare results, can be part of validation.
- Scheduler: For CA 7 to Control-M, convert job schedules, calendars, and dependencies. BMC often provides conversion utilities. Maintain a mapping document of any features that don’t translate one-to-one and outline how you will address them. For example, CA 7’s unique job numbering or forecasting reports might have different analogs in Control-M – ensure users are trained on new ways to achieve those tasks.
- Database: For migrating databases, such as IDMS or Datacom, to Db2, a significant data conversion effort is required. This might involve unloading data, transforming schemas, rewriting application calls, and then loading the data into the new database. Often, this is so involved that it’s part of a larger application modernization project. Plan for a parallel test environment where both databases run and results are compared for a full business cycle.
- DevOps/Tools: For developer tools like Endevor to another SCM, you’d migrate source code repositories and build configurations. Provide dual access during transition so developers can get used to the new system while still referencing the old as needed.
- Training and Change Management: An often-underrated aspect is the human factor. Your operations staff, developers, and support teams may have used CA tools for decades. Transitioning to a new tool means a learning curve and potentially resistance. Include a comprehensive training plan in the migration project. Engage vendor professional services or third-party consultants to conduct workshops for your team on the new product. Consider a champion user approach: identify a few tech-savvy team members to become experts on the new tool early, perhaps through pilot projects or formal training, and then have them mentor others. Update your runbooks, operating procedures, and documentation to reflect the new environment. The smoother the team adapts, the lower the risk of errors during and after the switch.
- Coexistence Strategy: During the transition period when both old and new tools are in use, define how they will coexist without conflict:
- Ensure that if both tools might act on the same target (e.g., two monitoring systems trying to auto-correct an issue, or two schedulers potentially triggering jobs), you deconflict their actions. Perhaps disable automation in one while testing the other, or partition the workloads between them.
- Watch out for resource overhead: running parallel tools can increase CPU or memory usage. Monitor system performance to avoid surprises in capacity. For example, running two security managers concurrently can have performance implications.
- Have a backup plan for each phase: if the new tool encounters a severe issue, you should be able to temporarily fall back to the old tool. This might mean keeping data in sync (e.g., continuing to update the CA Top Secret database even as RACF is phased in, until cutover is declared final).
- Vendor Support and Collaboration: When executing a migration, utilize vendor resources. IBM and BMC have a vested interest in a successful cutover, as they want a referenceable win. Leverage their support teams or even on-site assistance for those critical migration windows. They can often provide migration utilities and best practices from other clients who have gone through the same process. Conversely, maintain at least basic support with Broadcom during the transition – you want Broadcom to still assist if any issues arise on the legacy side until it’s fully retired. However, be discreet in communications; once Broadcom knows you are migrating, they may not prioritize your issues. Ideally, schedule the migration near the end of your Broadcom contract to minimize the period of dual maintenance payments.
- Testing and Validation: Rigorously test at multiple stages. Unit test each converted rule or job in the new environment, then system test end-to-end processes. For workload automation, run parallel schedules and compare outputs. For security, have users log in under both systems and verify access results. For the database, run query and transaction benchmarks to ensure performance and correctness in the new DB. User Acceptance Testing (UAT) is essential if end-users interact with the outcomes of these tools (such as reports, job results, etc.). Only after exhaustive testing should you decommission the Broadcom (CA) tool.
- Operational Readiness and Monitoring: Treat the cutover like a major go-live event. Have additional staff on hand and use a war-room style monitoring approach when you finally switch fully to the new system. Implement extra logging or alerts on the new system to catch anomalies that might have been overlooked. Sometimes, issues only surface under a production load – be prepared to react quickly in the initial days or weeks. It could be prudent to run a parallel run in production (if feasible) for a short period – for example, run the new scheduler to shadow the old one, or run both security managers (one enforcing, one logging) to catch any access differences, before fully handing control to the new one.
The bottom line: Mitigate risk through careful planning, phased execution, and support. Coexistence is a safety net; use it to ensure continuity. From the CIO’s perspective, communicate these plans to business stakeholders too – they should know that due diligence and incremental approaches are being used to protect the business during the transition.
When done right, transitioning off a Broadcom/CA tool can ultimately free the organization from vendor lock-in and lead to long-term cost savings or innovation. However, it must not jeopardize near-term operations, which is why cautious, well-managed change is needed.
CIO Recommendations and Planning for 2025–2027
Finally, we consolidate the playbook guidance into key recommendations for CIOs, focusing on license consolidation, procurement timing, and budget forecasting in the Broadcom (CA) mainframe context for the next few years:
1. Pursue License Consolidation and Optimization:
Treat your Broadcom mainframe software licenses as a portfolio to be rationalized and consolidated. Aim to combine contracts and eliminate unnecessary spend.
This includes:
- Portfolio License Agreements: Negotiate a single umbrella agreement for Broadcom software, as discussed, to leverage volume and co-term dates. This simplifies management and reduces the chance of something falling through the cracks (e.g., a small utility product auto-renewing at high rates).
- License Count Optimization: Use findings from your SAM analysis to adjust license counts. If certain licenses (such as CPU capacity or user seats) are underutilized, negotiate reductions at renewal or redeploy them elsewhere to avoid paying maintenance on idle capacity. Be mindful: Broadcom agreements may not allow mid-termreductions, so plan those changes for renewal time. Structure new contracts to allow for some flexibility if usage drops, even if it’s by giving notice X months in advance.
- Eliminate Duplicates: Wherever you have overlapping tools (e.g., CA vs. others), decide on a standard and remove the duplicates. Paying two vendors for the same functionality is a luxury most budgets can’t afford in 2025’s climate. If Broadcom’s tool is not chosen, plan to phase it out. If it is, ensure you’re not also paying IBM or others for equivalent features. Consolidation will not only save costs but also strengthen your negotiating position by concentrating your spend and demonstrating control over your environment.
2. Time Procurement for Maximum Advantage:
Timing can influence deal outcomes with Broadcom:
- Engage Early: Start renewal discussions at least 12 months before contract expiration, when possible. Early engagement can sometimes lead to incentives. For example, Broadcom might offer favorable terms if you renew well in advance, as it secures revenue for them. It also gives you time to escalate or explore alternatives without deadline pressure.
- Leverage Broadcom’s Fiscal Calendar: Broadcom is known to be financially disciplined. While CA’s traditional fiscal year ends in March, Broadcom Inc.’s fiscal year may differ (Broadcom’s fiscal quarters typically end around January, April, July, and October, aligned with financial reporting). If you can determine Broadcom’s year- or quarter-end, align your negotiations so that Broadcom has a motivation to close your deal by a quarter or year-end target. Vendors often become more flexible as the quarter ends, and they want to book revenue. Be cautious, though – Broadcom has shown a willingness to walk away from smaller deals, but for large ones, quarter-end can be leveraged.
- Avoid Last-Minute Negotiations: Don’t let your license expire in two weeks and still be haggling (like UHC’s case in 2025). That puts IT operations at risk (nobody wants to operate without a license or face a cutoff) and weakens your position. Always have a contingency, such as a brief support extension, if talks are ongoing and close to expiry. It may be worth negotiating an extension clause beforehand – e.g., the right to extend for 3 months at prorated fees if needed, to give both sides more time.
- Plan for Future Capacity Needs: When procuring new licenses or renewing, account for projected growth through 2027. If you expect, say, a 20% increase in mainframe workload as the business grows or new apps onboard, negotiate pricing for that additional capacity now. It’s better to lock in unit prices for future increments than to have to negotiate ad hoc in 2026 when Broadcom could charge a premium. Perhaps include an option in the contract: “The customer may license up to X additional MSUs at the same per-MSU rate.” Conversely, if planning reductions, consider including a flex-down option: “If MIPS usage decreases by 15% or more, the maintenance fees will decrease correspondingly.” (This is ambitious with Broadcom, but worth discussing, especially if you have credible downsizing plans.)
3. Budget Forecasting and Financial Planning (2025–2027):
Expect and model for increased spend on mainframe software, but manage the variables:
- Anticipate Price Inflation: Broadcom’s standard approach includes annual increases, up to approximately 7% in many contracts. It would be prudent to budget at least 5–7% annual increase in Broadcom software costs if you’re under multi-year maintenance, unless you have negotiated a lower cap. If your contract is expiring and you haven’t locked multi-year terms, budget for a potential step-change increase (even higher). Some enterprises have seen demands for 2x or more at renewal. While you will aim to avoid that, having funds earmarked (or a plan to mitigate features or licensing if faced with it) is wise. Communicate this risk to finance early – no surprises.
- Incorporate Hardware Capacity Changes: Mainframe software licensing often ties to the size of the machine or usage. If your organization plans hardware upgrades (e.g., migrating to IBM z16 in 2025–2026), note that if capacity increases, Broadcom licenses priced by capacity will also increase. Work with your capacity planning teams and include those projections. Sometimes, upgrading hardware can significantly increase effective MIPS capacity. Negotiate with Broadcom ahead of time how licenses will handle this (e.g., if you switch to a larger machine but partition it, etc.), ensuring the license model aligns. If the hardware upgrade will temporarily mean running both old and new versions (during migration), try to get a grace period where you don’t double pay Broadcom while transitioning.
- Scenario Plan for Alternative Execution: Since you may pursue alternatives to Broadcom for some tools, include the investment costs in your budget roadmap. For example, a migration project in 2026 might require $X in tools and consulting, but then might save $Y in recurring fees from 2027 onward. Lay this out clearly. Perhaps create two budget scenarios: a “Stay with Broadcom’ scenario (with their projected increases) and a “Migrate X and Y to a competitor’ scenario (with migration costs and then a different cost trajectory). This can aid decision-making at the CIO and board level about whether and when it’s financially beneficial to switch. It also helps justify short-term spending on parallel licenses or migration resources as an investment for long-term savings.
- Allocate Contingency Funds: Given Broadcom’s unpredictability, it’s wise to have a contingency in the IT budget specifically for software license pressure. This could cover unplanned license needs (e.g., if an audit reveals a shortfall and you need to make up for it) or additional costs if negotiations fall through and you have to extend for a high fee on a short-term basis. Having, say, 10% of the Broadcom spend as contingency might be a lifesaver. If you successfully negotiate everything without needing it, those funds can be reallocated or saved.
- Engage Finance on Contract Structuring: Work closely with finance to potentially structure payments in a way that suits both parties. Broadcom might prefer upfront payments (to book revenue) in multi-year deals; if you have cash, you might negotiate a better rate for paying upfront 2-3 years. If not, ensure finance is ready for annual pre-payments (common in maintenance contracts). Also, consider currency and tax implications if you are a global enterprise. Broadcom deals might be in USD – budget for exchange rate fluctuations if you report in a different currency.
- Monitor Broadcom’s moves: Keep an eye on Broadcom’s future strategy and any indications of changes (e.g., if Broadcom decides to alter its mainframe software pricing models again, or if it acquires another company that could be bundled in). For instance, Broadcom introduced a consumption-based model (MCL) – if they implement it, evaluate whether it could reduce your costs or not. Stay updated through 2025–2027 via Gartner analyses or user groups on Broadcom’s software pricing trends. Adjust forecasts if, say, Broadcom announces an across-the-board pricing reclassification or major change in support policy.
4. Strengthen Vendor Management and Communication:
Finally, treat the relationship with Broadcom as one that needs active management at the CIO level:
- Establish regular executive touchpoints with Broadcom Software leadership to discuss the roadmap, support issues, and your importance as a customer. Broadcom’s approach may feel transactional, but demonstrating your enterprise’s significance (in spend and influence) might earn some goodwill or at least attention when needed.
- Document all commitments Broadcom makes during negotiations (e.g., a promise of certain support levels or a discount if you add a product) – and incorporate them into the contract or a memorandum of understanding. Personal assurances can vaporize if your account rep changes.
- Coordinate among peer companies if possible. Some large mainframe users have formed informal alliances or user groups to share experiences dealing with Broadcom. While you must avoid any anti-competitive collusion, sharing strategies and perhaps approaching Broadcom collectively through user group feedback can make your voice heard (e.g., if many customers complain about a particular new policy, Broadcom might relent).
- Keep your CEO or CFO informed at a high level – mainframe software, once a quiet “keep the lights on” budget item, has gained board visibility due to these significant cost increases. Having executive backing for tough negotiation stances or potential vendor changes will empower IT leadership to make the best decisions without panic.
5. Consider Long-Term Mainframe Strategy:
A CIO playbook on licensing wouldn’t be complete without placing it in the context of your long-term mainframe strategy. Through 2027, is your enterprise leaning into the mainframe (with modernization and possibly increased usage), or aiming to reduce dependency through cloud and distributed systems? Your strategy will inform how you deal with Broadcom:
- If the mainframe remains a strategic platform, investing in stable vendor relations (whether with Broadcom or an alternative) is key – you may be willing to tolerate somewhat higher costs for guaranteed support and innovation. Ensure Broadcom’s product roadmap aligns with your needs (for example, support for DevOps and AI-Ops on mainframes, as Broadcom touts in its messaging).
- If you plan to downsize the mainframe footprint, you may be more aggressive with Broadcom, as you intend to have less usage or possibly sunset certain apps in a few years. In that case, don’t get locked into long contracts beyond what you need. You might negotiate shorter-term extensions or flexible arrangements – even if the per-unit cost is a bit higher, it could be more cost-effective than paying for 3 years when you only need 2. Also, for any applications slated to migrate off the mainframe by 2027, consider not renewing a long-term Broadcom license for their tools – maybe negotiate a 1-year renewal with the option to terminate earlier (though Broadcom might resist, you can try).
- Keep in mind the wider Broadcom software ecosystem: Broadcom also owns Symantec (security software) and now VMware. There may be attempts by Broadcom to cross-sell or bundle across these portfolios. As CIO, you should have a unified negotiation strategy. If, for example, you also use Symantec security products, see if a combined deal across mainframe (CA) and security can yield a better overall outcome – or conversely, be wary of Broadcom trying to condition one on the other (like UHC’s complaint about being forced to bundle VMware with CA renewal). Set an internal policy that each Broadcom domain will be evaluated on its merits, and you won’t blindly accept bundling that doesn’t fit your needs.
Conclusion: By following this playbook, CIOs can turn Broadcom’s acquisition of CA from a potential cost crisis into a manageable vendor relationship. The key is proactivity – in understanding Broadcom’s approach, consolidating and protecting your contracts, maintaining clear awareness of your software assets, and keeping competitive options in play.
With strong due diligence and negotiation backed by credible alternatives, enterprises can secure fair terms and maintain control over their mainframe destiny. Broadcom may be counting on inertia and dependency. Still, a savvy CIO armed with the right strategy can ensure their company continues to run its critical mainframe systems cost-effectively and with minimal disruption well into 2025–2027 and beyond.
