Broadcom – VMware and Legacy Suite Unbundling

Executive Summary

Broadcom’s acquisition of VMware (and earlier CA Technologies) is driving a fundamental shift in software packaging and pricing models. CIOs and IT sourcing leaders must prepare for suite-based licenses being retired in favor of component-based (or new bundled) subscriptions, often at significantly higher costs.

For VMware customers, legacy bundles like vCloud Suite or vRealize Suite may no longer be offered. This means that each component, such as the hypervisor, operations management, and automation, may require separate licensing or inclusion in Broadcom’s new, limited set of bundles. Former CA Technologies products have similarly seen restructured pricing models that increased costs for existing customers​.

CIOs need a proactive playbook to map their current usage, evaluate the criticality of each tool, anticipate pricing changes, and negotiate favorable terms during this transition.

This report provides a detailed analysis of Broadcom’s packaging approach and actionable strategies for CIOs to mitigate risks.

Key recommendations include:

• Inventory and Map Suite Components: Break down existing VMware and CA suite deployments into individual products and features.
• Assess Business Criticality: Identify which components are mission-critical versus those that are nice to have.
• Anticipate Pricing and Licensing Changes: Model the financial impact of Broadcom’s subscription and per-component pricing compared to legacy bundle costs.
• Engage Early and Negotiate Hard: Don’t wait – secure transitional discounts, lock in multi-year pricing, or preserve legacy terms whenever possible.
• Prepare a Response Plan: Ensure your organization is ready to adjust usage, budgets, and contract strategy as Broadcom phases out legacy bundles.

Throughout this playbook, “What CIOs Should Do Now” sections offer focused, practical steps to take immediately. By acting early and methodically, CIOs can navigate Broadcom’s licensing overhaul with minimal disruption and protect their IT budgets.

Broadcom’s Post-Acquisition Licensing Shake-Up

Broadcom’s late-2023 takeover of VMware introduced sweeping changes to product packaging, licensing, and pricing. Within weeks of the deal closing, Broadcom eliminated VMware’s perpetual licenses and moved all offerings to subscription-only models​.

This was accompanied by a dramatic consolidation of VMware’s product portfolio into only a few high-level offerings​. Instead of VMware’s myriad editions and suites, Broadcom now emphasizes “component-based” subscriptions – effectively requiring customers to license each major product or functional component separately (or as part of a new bundle), rather than enjoying broad bundles at a discounted rate.

A clear goal drives Broadcom’s approach: to maximize recurring revenue and upsell opportunities. By restructuring packages, Broadcom can charge for previously bundled features and compel customers to pay for capabilities they may have once received as part of a larger suite.

Under VMware’s old regime, a customer might have purchased vCloud Suite (which included vSphere, vRealize Operations, and Automation, among others) for a single price.

Under Broadcom, that same customer may have to subscribe to vSphere (core virtualization) and Aria/vRealize products separately, or upgrade to an expansive bundle like VMware Cloud Foundation to cover the same components.

In effect, Broadcom is unbundling legacy suites and introducing its packaging:

• Reduced Portfolio Complexity: Broadcom collapsed VMware’s catalog into as few as four core offerings. For example, VMware’s flagship Cloud Foundation (a comprehensive private cloud suite) is now one of the primary options, alongside a new vSphere Foundation bundle for core virtualization with added management tools​. Many former standalone or niche products, such as vSAN storage or NSX networking, are no longer sold à la carte – they are available only as part of these bundles or as add-on subscriptions. This “simplification” means customers often have to buy a broader solution than they want, leading to overspending on unused components.
• Component-Based Subscription Pricing: All licensing has moved to subscription, often measured on granular metrics. Broadcom introduced a per-core licensing model for VMware vSphere, replacing VMware’s old per-CPU model, with a minimum of 16 cores per CPU​. This effectively prices each unit of compute power and can inflate costs for modern multi-core servers. In parallel, software that was bundled as part of a suite now has individual price tags. For instance, if vRealize Operations (vROps) was previously included in a suite or enterprise license under Broadcom, it may require a subscription or inclusion in a higher-tier bundle. A new offering like vSphere Foundation now bundles vSphere with “intelligent operations management” (elements of vROps/Aria) for a higher price than vSphere alone. Customers using standard vSphere must subscribe to an add-on if they need those operations tools, essentially separating vROps from vSphere unless a higher bundle is chosen.
• Legacy Suite Retirement: Well-known VMware bundles such as vCloud Suite and vRealize Suite are being phased out in favor of Broadcom’s packages. Former CA Technologies product suites have likewise been re-examined. Broadcom has a track record of retiring or repackaging acquired software suites and then selling the core components individually. When Broadcom acquired CA, it “swiftly restructured pricing models, leading to significant cost increases for existing customers”​, often by altering how suites were sold. Broadcom also divested some products, for example, by selling off CA’s Veracode business, and tightened its portfolio to focus on what it deemed core. The result is that CIOs can no longer assume any bundle or enterprise license will persist – every element of the tech stack may need to be licensed anew or under a different construct.

In summary, Broadcom’s post-acquisition strategy replaces legacy bundle deals with a leaner set of offerings that require paying for each component or capability. This shift has profound implications for cost and vendor management, which we analyze next.

Implications of Moving from Suites to Components

The shift from suite-based licensing to Broadcom’s component-focused model presents several challenges and impacts:

• Significant Cost Increases: The most immediate effect is financial. Many organizations are reporting substantially higher quotes from Broadcom for equivalent functionality. In a recent survey, nearly 75% of IT decision-makers expected their VMware bills to at least double after the acquisition. Gartner has observed that some clients’ costs have tripled under the new model. Broadcom’s aggressive pricing was further evidenced by one large enterprise facing an astonishing 1,050% increase in annual VMware costs under Broadcom’s proposed terms​.
  In contrast, that extreme may be an outlier; 2x-3x price hikes for similar usage are not uncommon​. Broadcom’s history reinforces this trend: after acquiring CA and Symantec, it introduced higher fees. It slashed discounts for smaller customers, forcing many to swallow steep increases or reconsider their toolsets​. In short, unbundling suites often means paying more overall – either you buy multiple separate subscriptions (each with its own cost) or you upgrade to a larger Broadcom bundle that includes everything (likely at a premium price).
• “Pay for What You Don’t Use” Effect: Ironically, Broadcom’s so-called portfolio “simplification” can reduce flexibility and increase waste. By bundling previously optional components into a few all-encompassing packages, Broadcom is effectively telling customers: you must pay for the full banquet, even if you only eat a few dishes. One industry CEO described Broadcom’s approach as “the Broadcom banquet is ‘eat what you like, pay for it all.’” Customers don’t want to be forced into buying capabilities they won’t use. For example, an organization that only needs vSphere and vSAN might still have to purchase the entire Cloud Foundation suite (which includes NSX, Aria Operations, etc.) just to get those two, because standalone vSAN and NSX licenses have been discontinued. This leads to paying for shelfware – owning software licenses for components that remain idle. It also complicates internal chargeback or cost allocation, since the bundle’s cost must be spread across multiple teams even if one team doesn’t benefit from all components.
• License Compliance and Complexity: Unbundling suites means each product now comes with its own licensing terms, metrics, and renewal cycles. This can increase the administrative burden on IT asset management teams. There is a risk of compliance issues if, for instance, a feature that was once freely accessible as part of a suite now requires a specific license key under Broadcom. CIOs must ensure they fully understand the new licensing rules to avoid inadvertently using unlicensed components. Broadcom is known for enforcing compliance strictly – their sales teams have shown a willingness to trigger audits if they suspect customers are using software beyond their entitlements. The granularity of component licenses (e.g., tracking CPU core counts for vSphere or capacity for storage products) requires closer monitoring of usage to stay compliant and optimize costs.
• Impact on Budgeting and Forecasting: Under legacy suites, costs were more predictable – one bundle of maintenance or subscription covered a broad set of tools. Now, CIOs must budget for the subscription of each component, which may all renew at different times or at varying rates. Some components may be priced in ways that scale differently (for example, vSphere by cores, but vRealize/Aria by managed VM count or per user, etc.), adding complexity to forecasting. Total Cost of Ownership (TCO) comparisons between the old and new models can be eye-opening. In many cases, the total cost of ownership (TCO) over 3-5 years will be higher with component-based licensing, even when accounting for not paying for unused components. This is because Broadcom has generally raised unit prices across the board. In one example reported by industry press, a company found it was paying 175% more for roughly the same VMware capabilities after Broadcom’s changes​. Some customers are even paying up to ten times more for the “same services” after renegotiation​, especially if they were on very favorable legacy contracts. These increases can strain IT budgets and may require CIOs to seek additional funding or make cuts elsewhere.
• Risk of Product or Feature Loss: Another implication of Broadcom’s packaging changes is the possibility that certain legacy suite features might be discontinued or not carried forward. Broadcom has not hesitated to cut products that don’t align with its core focus. If any tools in your VMware or CA suites are deemed non-strategic by Broadcom, there is a risk that they could be shelved or receive minimal investment. CIOs should watch for announcements of end-of-life or “end of availability” for products that were once part of bundles. For instance, if a VMware bundle included a niche tool that Broadcom hasn’t included in its new bundles or addons, that tool’s future is uncertain. Similarly, some former CA products might only be available on older versions without new features, unless customers migrate to Broadcom’s chosen replacement product. This means that organizations might lose functionality or support unless they adopt Broadcom’s preferred component, which may be a more expensive platform or a cloud service alternative.

Given these impacts, CIOs must act quickly to understand exactly how Broadcom’s licensing overhaul will affect their environment. The next sections outline strategies to systematically respond, ensuring no component is overlooked and no cost increase catches you by surprise.

What CIOs Should Do Now – Understand the Change

• Educate Your Team: Ensure your IT procurement and architecture teams fully understand Broadcom’s new licensing model. Share summaries of changes (e.g., no perpetual licenses​, new core-based metrics, required bundles) so everyone is aware of what’s coming.
• Identify Affected Agreements: Review all current VMware and CA contracts to determine which ones are affected. Flag those that involve suite licenses or bundles (such as VMware Enterprise License Agreements, including vCloud Suite or any “suite” licenses from CA). These are the agreements most likely to be impacted by Broadcom’s unbundling.
• Schedule Vendor Briefings: Proactively reach out to your Broadcom or VMware account manager to request a detailed briefing on upcoming packaging changes. Get written documentation of the new product SKUs that correspond to your current suites. This will clarify how each functionality will be sold as we advance.
• Join Customer Communities: Engage with user groups or forums for VMware and CA customers, keeping discussions vendor-neutral. Hearing how other enterprises interpret the changes can validate your understanding and reveal nuances (for example, learning if vROps is now charged separately from peers in the community).

By thoroughly grasping Broadcom’s new rules of the game, CIOs and their teams can move from a reactive stance to a proactive planning mode, as detailed in the next sections.

Mapping Legacy Suite Usage to Individual Components

“You can’t manage what you don’t measure.” The first critical step in responding to Broadcom’s pricing shift is to map out all the components your organization currently uses under any suite or bundle license.

This creates a clear picture of what you have – and what you stand to lose or pay more for when those suites are unbundled.

1. Inventory All Suites and Products:

Start by listing every VMware and former CA Technologies product deployed in your environment. Include version numbers and the type of license (perpetual vs subscription, bundle name if applicable).

For VMware, identify if you own any bundled offerings such as vCloud Suite (which contains vSphere, vRealize Operations, etc.), vRealize Suite, vSAN+NSX bundles, or vSphere with Operations (vSOM). For CA, list any suites (for example, CA Application Performance Management suite, CA Security bundle, etc.) and the individual tools under them.

This inventory should distinguish core components from add-ons. Example: If you have the vRealize Suite Enterprise, note that it includes vRealize Operations, Automation, Log Insight, and Lifecycle Manager – these are the components to map individually.

2. Map Entitlements to Components:

Break down each suite license into its constituent components and record your entitlements and usage for each. For each component, document:

• Entitlement Details: How is it licensed in the suite (unlimited usage, or a specific capacity)? For example, vRealize Operations might entitle you to monitor X number of VMs or endpoints within the suite.
• Current Usage Level: Are you using that component? If yes, how heavily? For instance, maybe vRealize Log Insight was included, but you never deployed it – that’s an unused component. Or you have vSAN as part of a bundle and currently have 50 TB of vSAN deployed.
• Dependency & Integration: Note which components are integrated or work together in your environment. Sometimes, suites have tight integration, such as vRealize Automation feeding into vRealize Operations. Understanding this helps anticipate the effort if a component is removed or licensed separately.

3. Identify “Hidden” or Indirect Usage:

Some suite components may be so embedded that they are taken for granted. For example, vRealize Operations might be feeding alerts into your enterprise monitoring dashboard, or a CA suite component might be embedded in a larger workflow.

Talk to the engineering and operations teams to uncover any use of suite components that may not be immediately obvious. A common oversight is assuming a component isn’t used just because it wasn’t separately installed – it may still be leveraged via an integrated suite installer or a feature toggle. Document these findings.

4. Map to Broadcom’s New Offerings:

Using information from Broadcom (obtained via documentation or your account team), correlate each legacy component to Broadcom’s new equivalent product or service. Broadcom’s four core VMware offerings likely cover these components in different ways.

For example:

• If you use vSphere (hypervisor) and vRealize Operations, under Broadcom, this could require both a vSphere subscription (likely vSphere Enterprise or vSphere Foundation) and an Aria Operations (formerly vROps) subscription, unless you opt for a bundle like Cloud Foundation that includes both.
• If you use CA Service Management Suite, Broadcom may have broken it down into separate products (such as incident management and asset management), each licensed separately now. Create a mapping document or table that shows: Legacy Suite Component -> Broadcom new product name/sku -> License metric (e.g., per core, per user, etc.). This will be invaluable for planning and cost estimation.

5. Highlight Discontinued Items:

Mark any components for which there is no direct one-to-one replacement in Broadcom’s catalog. These might be features Broadcom dropped. For instance, if a minor VMware tool or a CA utility isn’t in the new price list, flag it.

This doesn’t always mean an immediate loss of use (you might be able to continue using an older version for a while), but it signals that you eventually need an alternative plan for that function.

By the end of this mapping exercise, you will have a granular view of your toolset in the new world. Many CIOs are surprised at the complexity uncovered – perhaps dozens of individual license items, where there were previously a few suite licenses. But this clarity sets the stage for the next step: determining what’s truly important.

What CIOs Should Do Now – Inventory and Mapping

• Appoint an Owner: Assign a project lead (from IT asset management or sourcing) to drive the inventory and mapping effort. This ensures accountability and keeps progress on track.
• Use Automated Tools: Leverage license management tools or scripts to extract usage data for each component. For VMware, vCenter and vRealize Suite Lifecycle Manager can report on deployed products. For CA, use the existing asset management system. Automation reduces manual errors in inventory.
• Engage Application Owners: For each component, involve the application or infrastructure owner who relies on it. Have them confirm whether the tool is actively used and what the impact would be if it were unavailable. This not only validates the inventory but also prepares business stakeholders for potential change.
• Document in a Central Repository: Store the mapping information in a central spreadsheet or database accessible to the sourcing, IT, finance, and technical teams. Include fields for legacy suite name, component, current usage, Broadcom equivalent, and notes on importance. This will become the single source of truth as you proceed to analysis and negotiation.
• Review Contractual Terms: In parallel, review the contracts for any clauses related to divestiture or acquisition impacts. Some enterprise agreements might have clauses for product substitutions or protections if a bundle is broken up. Note anything that could be leveraged later (for example, the right to certain credits if a product is discontinued).

Completing the inventory and mapping is a foundational step – it arms CIOs with the knowledge of “what do we have and need” under the new paradigm. With this in hand, the focus can shift to evaluating the necessity and value of each component.

Evaluating the Criticality of Each Tool

Not every component in a software suite delivers equal value to the business. Broadcom’s unbundling presents an opportunity (albeit a forced one) to re-evaluate the necessity of each tool in your VMware or CA portfolio.

CIOs should distinguish mission-critical components from those that are nice-to-have or redundant. This analysis will help you identify areas where you can potentially cut costs or negotiate more effectively, and where you need to invest to ensure continuity.

1. Categorize Components by Criticality:

Using the mapped list from the previous step, assign a criticality level to each component:

• Tier 1 – Mission Critical: Systems without which major business operations would stop or be severely impacted. For example, VMware vSphere hypervisor is Tier 1 for most, as it runs business workloads. A CA mainframe performance tool might also be Tier 1 if it is integral to core banking transactions.
• Tier 2 – Important but Replaceable: Tools that provide significant benefits but have workarounds or alternatives (internal or third-party) if needed. For example, vRealize Operations might fall here – it greatly helps with monitoring and capacity planning, but in a pinch, you could survive with basic vCenter alerts or another monitoring tool (keeping in mind that we focus on negotiating within Broadcom’s ecosystem, not switching vendors).
• Tier 3 – Low Impact/Nice-to-have: Components that were included in suites but see little use or provide marginal benefit. A reporting module or niche automation feature might fall into this category, especially if your team has never fully adopted it.

Get input from the operational teams and business stakeholders on this classification. This step is crucial for identifying where you have leverage to potentially drop a component versus where you need to ensure a component remains available.

2. Assess Business and Technical Dependence:

For each component, write a brief description of why it’s in its criticality tier. What business process relies on it? What would the impact be if you lost it or if it became prohibitively expensive?

For instance:

• vRealize Operations (vROps): Provides proactive performance analytics and dashboards for the virtualization team. Impact if lost: reduced visibility into capacity, potential risk of downtime going undetected, higher manual effort to monitor dozens of hosts. Workaround: Use vCenter’s built-in monitoring and open-source tools as a short-term measure, but long term would need a comparable monitoring solution.
• NSX Data Center: Underpins network virtualization and micro-segmentation in the private cloud. Impact if lost: cannot manage virtual networking or security policies, which would break application connectivity. No viable workaround internally; must be retained (Tier 1).
• CA Project Portfolio Management (Clarity): Used by PMO for project tracking. Impact if lost: moderate disruption to project tracking, but data could be exported to an alternative or even spreadsheets temporarily. Important, but could find another solution if necessary (Tier 2).

This analysis not only clarifies the importance but also prepares talking points if you need to justify dropping something or pushing back on pricing for a critical item with Broadcom.

3. Identify Redundancies or Overlaps:

Check if any components provide overlapping functionality. In suites, two tools may sometimes have similar features. Broadcom’s new packaging might force you to rethink whether you need both.

For example, VMware’s vRealize Operations and an older CA capacity management tool might both be monitoring infrastructure – do you truly need to continue licensing both under Broadcom’s terms? If not, one could be deemed non-essential. Eliminating redundant components can soften the blow of cost increases by reducing the scope of what you must renew or replace.

4. Prioritize Components for Negotiation Focus:

With criticality in mind, decide which components you will fight hardest to protect in terms of favorable pricing and terms. These are typically Tier 1 components – you cannot drop them, so you must ensure Broadcom’s changes don’t make them untenable.

For these, plan to negotiate caps on price increases or extended support for legacy versions until you can budget for the new model. Conversely, for Tier 3 items, you have the option to walk away if Broadcom’s offer is too expensive.

Knowing this ahead of negotiations is powerful: you can tell Broadcom, “We don’t need X if it’s priced unreasonably,” and be willing to remove it from the deal (and from your environment) to save costs.

5. Consider Future Needs:

Also, think strategically – are there components you aren’t using heavily now but plan to use in the future? Perhaps your cloud strategy envisioned greater use of VMware automation tools next year, or a CA security module was going to be rolled out.

Factor those into criticality with a forward-looking lens. You may decide to accelerate some deployments now to lock in licensing (if that’s possible before Broadcom makes changes), or, conversely, postpone them until you see how the pricing shakes out.

Through this evaluation, CIOs can develop a clear understanding of what pieces of their software landscape are indispensable and which are negotiable. This sets the stage for crafting a response to Broadcom’s pricing – either paying for what’s truly needed, negotiating on nice-to-have items, or eliminating unnecessary costs.

What CIOs Should Do Now – Assess and Prioritize

• Facilitate a Stakeholder Workshop: Bring together application owners, architects, and business unit leaders for a workshop to review the list of components and agree on criticality tiers. This ensures consensus and surfaces any concerns early, for example, if a business unit considers a tool more critical than IT had realized.
• Develop “Drop Plan” Scenarios: For each Tier 3 (low-criticality) component, outline what it would take to drop it. Document how you would transition off that tool or what manual process might fill the gap. This becomes leverage in negotiation – you have a fallback plan if Broadcom won’t deal.
• Consolidate Redundancies: If two tools overlap, decide which one to keep now. For instance, if you have overlapping VMware and CA monitoring tools, choose one and plan to discontinue the other. This simplifies negotiations and reduces costs.
• Align with Enterprise Architecture Roadmap: Cross-check the criticality assessment with your 3-5 year IT roadmap. Ensure that any component deemed non-critical doesn’t suddenly become important due to a new project; if it does, adjust its priority. Conversely, if a future initiative will require a new Broadcom component (such as adopting VMware Tanzu for containers), factor that into negotiations – you might bundle it in now at a better rate, if possible.
• Secure Management Buy-In: Present the findings to senior management or an IT steering committee. Get endorsement on which components are must-haves versus optional. This backing is crucial when you go to Broadcom negotiations. If you decide to walk away from a component, you need leadership’s support, as it may mean a capability loss or internal change.

With a firm grasp on what you have and what you need, the next challenge is to tackle the impending pricing changes head-on. In the following section, we explore how to prepare financially and logistically for Broadcom’s new pricing model and how to mitigate its impact.

Preparing for Pricing Changes and License Discontinuations

Armed with an inventory and criticality assessment, CIOs should now turn their attention to forecasting the financial and operational impact of Broadcom’s new licensing scheme.

Preparation is key: by anticipating changes, you can take steps to cushion your organization from budget shocks or disruptions. This section covers how to model pricing scenarios, plan for transitions, and handle any discontinuation of legacy licenses.

1. Gather Preliminary Pricing and Terms:

If possible, obtain indicative pricing from Broadcom for the new subscriptions corresponding to your needs. Even if you’re not yet in a formal renewal negotiation, ask your account manager or reseller (if any remain in the channel) for ballpark quotes. Broadcom may provide a mapping of old SKUs to new SKUs, along with their list prices.

Pay attention to the licensing metrics (per core, per 100 VMs, per user, etc.) and ensure you can translate your usage into these units. For example, if vRealize Operations is sold per CPU or VM under a subscription, calculate how many units you would require based on your current usage.

Also, inquire about any transitional programs – Broadcom has offered “trade-in” incentives (e.g., credits for unused terms on perpetual licenses) and may have promotional discounts for early adoption of subscriptions.

2. Model Multiple Scenarios:

Create a financial model comparing at least three scenarios:

• Scenario A: Status Quo (Legacy Pricing) – what you would have paid if VMware/CA licensing stayed as it was (e.g., maintenance renewals on suites, etc.). This is your baseline.
• Scenario B: Broadcom New Model – Full Usage – assume you continue using everything you use today, but now you pay for each component under Broadcom’s pricing. Calculate the annual cost. This likely shows a steep increase. For instance, you might find that what was a $1M/year VMware ELA could become $2.5M/year when broken down into individual subscriptions at list prices, given the 2-3x+ hikes many see.
• Scenario C: Broadcom New Model – Optimized Usage – assume you drop or reduce some components (Tier 3 or redundant ones identified earlier) to save costs. Maybe you decide not to license a marginal product, or you reduce the footprint of a component (e.g., archive some virtual machines to reduce vRealize Operations count). Calculate the cost under this trimmed usage. This scenario shows the benefit of rightsizing and could reduce the cost somewhat compared to Scenario B (though it will likely still be higher than A).
• (Optional) Scenario D: Extreme Cut or Alternative – if feasible, model a scenario where you drop a major portion of Broadcom’s portfolio (for example, if some workloads could be moved off VMware to the cloud or you retire a CA product entirely). We don’t recommend switching vendors lightly, but knowing the “nuclear option” cost gives perspective. In some cases, it may show that even with migration costs, dropping a tool is cheaper over the long term than paying Broadcom’s new fees. Use this only for internal analysis and as a negotiating backdrop, not as a first course of action.

3. Identify Budget Gaps:

Compare these scenarios to your current IT budget and any forecasts you’ve given to finance. If Scenario B or C shows a 50% or 100% increase, you need to flag this internally early. No CFO likes the last-minute surprises of a budget overrun.

Prepare a briefing for finance explaining that, due to vendor-driven changes, costs may rise and that you are working to mitigate this. If you have a budget cycle coming up, incorporate the worst-case estimates so that funds can be allocated if needed. It’s easier to budget for it and save money if you negotiate a lower price than to have no budget and scramble to find funds.

4. Plan for Contractual Gaps:

Determine if there will be any gap in coverage or support due to the transition. For example, if your VMware support renewal is due in 6 months but Broadcom says they won’t renew it (forcing a subscription move), you might face a period where you either have to accept the new model or risk being unsupported.

To avoid any lapse:

• Engage Broadcom to possibly extend support on current terms for a short period while negotiations continue. (AT&T’s lawsuit case was about enforcing a contract extension for support​.) You may not want to litigate, but it shows the importance of aligning contract timelines.
• If certain products are being discontinued, get clarity on their end-of-support dates. Mark these on your calendar and ensure plans are in place to migrate or replace those by then.

5. Mitigation Tactics:

There are a few ways to lessen the immediate impact of price changes:

• Co-term and Multi-Year Deals: If possible, negotiate to co-term new subscriptions such that they all renew at the same time and ideally secure a multi-year rate. A three-year subscription deal with fixed pricing can protect against annual increases (and Broadcom is likely to continue raising prices each year​). Multi-year deals may also come with better initial discounts.
• Lock-in Legacy Metrics: If Broadcom introduces new licensing metrics (such as per-core instead of per-CPU), check if they offer grandfathering of the old metric for a transition period. Perhaps you can negotiate, for example, “we will move to subscription but treat our 8-core CPUs as one unit for the first renewal” to avoid a spike due to core count. This might be a long shot, but in some cases, vendors allow a phase-in of new metrics.
• Volume Commit Discounts: Broadcom may be more willing to discount if you commit to broader usage of their portfolio. Be cautious, since that can mean buying things you don’t need. However, if you genuinely foresee adopting more of their products, such as using more VMware cloud services or additional CA tools, bundling those into the negotiation could give you leverage for a package deal discount.
• Monitor Support Levels: Broadcom’s model might also tie support tiers to the new subscriptions (e.g., standard vs premium support). Ensure you’re not automatically charged for a high support level you don’t need. If they include “enhanced support” in the bundle (as they touted with Cloud Foundation subscriptions), determine if that’s useful or if you can opt for a lower-cost support level.

6. Prepare the Organization:

Communicate with your IT teams about possible changes in how they access software. If some licenses might not be renewed, plan the operational adjustments. For example, if a monitoring tool’s license might lapse, have procedures to use an alternative data source.

If a less critical tool is dropped to save costs, inform its user base early and provide guidance on manual processes or other tools they can use. Internally, this is change management – don’t underestimate the need to get buy-in from users if you decide not to continue certain software due to Broadcom’s pricing.

By thoroughly preparing on the financial and operational fronts, CIOs can approach negotiations and transitions from a position of readiness. You’ll know your numbers, your must-haves, and your fallback plans, which makes for a much stronger negotiating posture.

What CIOs Should Do Now – Financial Planning and Risk Mitigation

• Run a “Pre-Mortem”: Convene a meeting with your finance and operations leads to imagine it’s a year in the future and the Broadcom transition went poorly. Identify what went wrong (e.g., “we didn’t budget enough, and had to emergency fund an extra $2M” or “product X support expired before we had a new license”). From this exercise, extract actions to prevent those failures now (like securing budget approvals or extension agreements in advance).
• Engage Vendor Early for Quotes: Don’t wait until the last minute to get pricing. Even if your renewal is 9 to 12 months away, start the conversation now. Early insight into Broadcom’s pricing lets you prepare management and possibly synchronize the transition with budget cycles. It also signals to Broadcom that you are on top of the changes (they may be less likely to spring surprise terms on a well-prepared customer).
• Create a Transition Timeline: Map out key dates, such as when current contracts expire, when cancellation notices need to be issued (if required), and when you want to finalize new agreements, among others. Include internal deadlines like “decision on dropping Tool Y by Q2” or “complete cost modeling by March 31”. This timeline will guide your team’s activities and ensure nothing slips through the cracks.
• Stay Abreast of Broadcom Announcements: Continuously monitor any communications from Broadcom or VMware about product packaging. Changes are evolving – for instance, Broadcom halved the price of one bundle (VMware Cloud Foundation) after feedback​, and introduced a new mid-tier bundle (vSphere Foundation) as of late 2023. These updates can impact your strategy; for example, a price cut could reduce your projected costs, or a new bundle might better fit your needs. Subscribe to newsletters or blogs from independent licensing experts for timely updates.
• Brief the Board or C-Level: If the financial stakes are high (and for many large enterprises they are, given VMware’s ubiquity), consider briefing your board or C-suite on the situation. Position it as a major vendor management initiative. This way, if you need executive intervention later (e.g., CEO-to-CEO talks or approval for a big upfront payment to secure a deal), your leadership is already aware of the context.

By now, you have mapped your usage, assessed criticality, and prepared for financial impacts. The groundwork is laid. Next, we focus on the execution: engaging with Broadcom in negotiations and securing the best possible outcome for your organization.

Negotiation Strategies for the Broadcom Transition

Facing Broadcom’s tough stance and substantial pricing shifts, CIOs must adopt robust negotiation tactics. Broadcom is known for its no-nonsense, profit-driven approach – one analyst characterized it as holding a knife to customers and saying, “This is what you have to do, or you’re out​.”

In this environment, typical vendor negotiation playbooks need to be augmented with a more assertive and creative strategy. Below are tactics and considerations for negotiating with Broadcom (VMware and CA divisions) to navigate suite unbundling:

1. Engage Early and Control the Timeline: Do not let Broadcom dictate the renewal timeline. As mentioned earlier, start discussions 6 months or more before your contracts expire. Broadcom has been known to use time pressure (e.g., last-minute ultimatums) to force customers into accepting deals​. By initiating talks early, you remove that leverage.

Set a negotiation schedule with clear milestones, such as proposal exchange and internal review. If Broadcom reps know you are well-organized and have time to consider alternatives (even within their offerings), they may be more willing to work with you on details rather than risk you walking away out of principle.

2. Leverage Your Legacy Investments:

If you still have active perpetual licenses with support or an Enterprise License Agreement (ELA) that hasn’t expired, use that as a bargaining chip. Broadcom wants to convert these into subscriptions quickly; they’ve even offered trade-in discounts of around 50% in some cases to incentivize the conversion.

Insist on getting credit for the value of what you’ve already paid. For example, if you bought a 3-year VMware ELA that included vRealize Suite and you’re only 2 years in, you have a year of paid entitlement left – don’t let that go to waste. You could negotiate something like this: Broadcom converts you to the new model but gives a credit or discount equivalent to the remaining value.

Similarly, if you have perpetual licenses, note the years of support fees paid and negotiate a trade-in deal (e.g., a reduced subscription price for the first term). Broadcom’s initial strategies have included such concessions, but they won’t give them unless you ask firmly.

3. Aim for Price Protections:

Given the upward price trajectory, try to bake in safeguards. For instance, negotiate a cap on annual price increases (e.g., no more than a single-digit percentage increase per year for the next three years) or, better yet, lock the price for a multi-year term. If you agree to a subscription now, try to secure renewal options at predefined rates.

Broadcom might resist, but emphasize that you need stability to sell this transition to your team internally. If they offer a steep first-year discount, ensure it’s not just a bait with a huge jump later – specify in the contract what the costs will be for Years 2 and 3. The goal is to avoid unwelcome surprises, such as a 20% increase in year two.

4. Negotiate Bundles vs. Components Wisely:

You have mapped what you need – now use that knowledge. Broadcom may push you toward one of their core bundles, such as Cloud Foundation, as a one-stop solution. Compare the bundle price to the sum of the individual components you truly need. If the bundle includes three things you won’t use, it might be cheaper to buy two components separately, even if the list prices are high. On the other hand, if you genuinely need most of the pieces, the bundle could offer some convenience or a slight discount.

Propose custom bundling:

Broadcom may have some flexibility to create a custom SKU for your organization that includes a specific set of components at a mutually agreed-upon price. This essentially recreates a mini-suite tailored to you, even if it’s not a publicly offered suite. For example, if you need vSphere, vRealize Operations, and NSX but not the full Cloud Foundation, ask if they can price those three as a package for you. You won’t know unless you ask – and the worst case is that they say no, in which case you can proceed with individual licenses.

5. Seek Transitional Arrangements:

If the new model is cost-prohibitive, don’t be afraid to request a transitional arrangement. For instance, a phase-in pricing plan where you pay a smaller increase in Year 1 and then step up to the full rate in Year 2 or 3. This can help your organization absorb the change over multiple budget cycles. Broadcom might agree if it secures a longer commitment.

Another angle is to ask to extend the current terms for a short period (e.g., “allow us to renew our support for one more year on the old model while we evaluate the new subscription options”). Not all customers will get this, but large customers or those who ask convincingly sometimes do secure short-term extensions.

AT&T’s legal fight indicates Broadcom can bend (they gave AT&T a one-month extension pending talks). You can negotiate without litigation by simply making the case that you need a bit more time to transition due to internal approval processes, etc. (especially if your renewal fell very soon after the acquisition – an argument that you didn’t have enough notice).

6. Don’t Underestimate Your Leverage:

Remember that while Broadcom appears to hold the cards, they also have strong incentives not to drive away all customers. VMware’s customer base is huge, and if even a significant minority refuses to accept the terms, it could hurt Broadcom’s revenue or create public backlash.

We’re already seeing discontent in the market, and some customers are exploring exits. Use this context subtly: you might mention to Broadcom reps that your management is considering “all options” given the increases— a hint that you could reduce your dependence on them. You don’t need to threaten to leave (and indeed, you may not intend to), but signaling that you are not completely captive can make them more flexible.

If you have any alternative platform in use (e.g., another hypervisor in a small corner of your business), you could mention you’d rather grow that footprint than overpay – again, not as a direct threat, but as a matter-of-fact part of your strategy. Broadcom’s worst fear is that customers will find alternatives en masse, so show that you have at least done some contingency planning.

7. Terms and Conditions Matter:

Pay attention to non-price terms too. Ensure the contract language doesn’t lock you into unfavorable conditions, such as:

• Strict Audit Clauses: Try to get some audit relief – e.g., require reasonable notice and limit audits to once a year, etc. Broadcom will likely keep rights, but you can add fairness language.
• License Flexibility: If you’re subscribing to a specific number of units (cores, users, etc.), check if the contract allows for some downgrading or transferability. For example, if you downsize your environment, can you reduce the number of subscriptions at renewal? Or, if you migrate some on-premises VMware workloads to VMware Cloud (also owned by Broadcom), can you transfer the credits?
• Termination and Penalties: Avoid multi-year commitments that have severe penalties if you exit early. You want the option, however unlikely, to change direction if needed in a couple of years.
• Legacy Usage Rights: If you still have perpetual licenses, ensure the contract doesn’t nullify your rights to those. Even if support ends, you can still technically use your perpetual licenses indefinitely (although they will be unsupported). Broadcom’s new contract should not contain language that revokes that right upon moving to subscription – unless they compensated you. Watch for any “relinquishment” clause.

8. Involve Independent Expertise (Quietly):

Consider using an independent licensing advisor or consultancy to support your negotiations. Firms like Redress Compliance (and others) specialize in VMware and software licensing negotiations. They can provide benchmarks (e.g., what percentage discount others are getting, typical contract clauses to watch out for) and help craft counterproposals.

Be cautious to keep them in a behind-the-scenes role; Broadcom may not love seeing a third party in negotiations, so use their advice to inform your strategy and perhaps have them review contract drafts. Their neutrality and experience can help you spot gotchas you might miss. If you choose this route, do your due diligence – ensure the advisor is truly independent and has a track record with Broadcom’s previous deals, including CA, Symantec, and VMware.

9. Document Everything:

Keep a detailed record of all communication with Broadcom. If they make verbal promises (“we’ll give you a 30% discount if you sign by X date”), get it in writing or by email. This protects you in case of personnel changes or misunderstandings. Also, having a paper trail can be useful if disputes arise (though hopefully it won’t come to legal measures, documentation is your friend if it does).

In negotiations with Broadcom, the key is to be firm, data-driven, and creative. Expect a hardball approach from their side, but come prepared with your facts (usage data, cost models) and a clear ask. Know your walk-away points (for each component if not the whole deal), and equally know what is a win for you (e.g., keeping increase within X%, or getting an extra year of support on a legacy product).

It may take multiple rounds, and involvement of higher-ups (don’t hesitate to escalate to a Broadcom VP or even a polite letter to Broadcom’s CEO Hock Tan, if you’re a major customer – sometimes that can trigger a better account response team).

What CIOs Should Do Now – Negotiate and Secure Value

• Assemble a Skilled Negotiation Team: include members from IT, procurement, legal, and finance. Everyone should be aligned on objectives and fallback positions. Conduct internal prep meetings to role-play discussions with Broadcom, so your team presents a unified front.
• Set a Target Outcome: Define what success looks like. For example: “Total VMware cost increase < 20% YoY, and maintain rights to use X and Y features.” Having a target (and a stretch target) lets you measure proposals against something. Share this target with Broadcom as needed (“We need to be around 15% over current spend, or we can’t make this work internally”).
• Use Benchmark Data: If you have access to any industry benchmarks or peer insights, use them. Saying “we know of others in our industry who renewed around X% increase” can strengthen your case. Be careful not to divulge confidential info – generalize the source (“industry reports” or “independent advisors have seen…”).
• Document Concessions in Contract: Ensure every concession or special condition is explicitly written in the final agreement. If Broadcom agrees to, say, a flexible component count or a certain add-on at no charge, put it in the contract or an addendum. Handshakes don’t count once you’re under the new regime.
• Maintain a Professional Tone: Broadcom’s negotiators might be blunt, but they remain professional and fact-focused. Avoid emotional appeals and focus on the business impacts. For example, instead of saying “this is unfair,” say “this cost level is beyond what our budget can absorb, which will force us to consider reducing our footprint – something we’d prefer to avoid. Let’s work on a solution that allows us to continue our broad use of VMware products.” This frames it as a problem to be solved together.

By negotiating proactively and knowledgeably, CIOs can often soften the blow of Broadcom’s changes. Perhaps you won’t get the same sweet deals you had before, but you can very likely do better than the first quote on the table.

The final step is to learn from others – how are other enterprises handling this? We’ll look at some anonymized case examples next.

Pricing Comparison Scenarios: Suite vs. Component Licensing

To illustrate the financial implications of Broadcom’s approach, consider a hypothetical example of an enterprise that was using VMware’s vCloud Suite and how costs might compare under the legacy model versus Broadcom’s new model. (Note: These scenarios use simplified, hypothetical numbers for illustration – actual prices will vary, but the relative differences reflect industry reports.)

Company Profile: Mid-size enterprise with 100 CPU sockets of VMware vSphere, previously licensed via vCloud Suite Enterprise (which included vSphere Enterprise Plus + vRealize Suite components).

They also use NSX for network virtualization on half of those hosts, and vSAN on 20 TB of storage.

• Legacy Suite-Based Licensing (Pre-Broadcom): The company had a VMware Enterprise License Agreement (ELA) that effectively provided vCloud Suite Enterprise for 100 sockets, along with NSX and vSAN licenses. The annual support and subscription cost for this bundle was $1,000,000. This covered all components (hypervisor, management, networking, storage) in one price. The pricing metric was per CPU socket (with unlimited cores) for the suite, and a separate capacity metric for vSAN, which was, for example, $ 60,000 per year for 20 TB. Overall, they were paying approximately $1.06 million per year.
• Broadcom Component-Based Pricing (Post-Acquisition): Broadcom no longer offers vCloud Suite. The company now has a few options:
  • Option 1: Subscribe to VMware Cloud Foundation (VCF) for all 100 hosts. This would include vSphere, vSAN, NSX, and Aria (vRealize) in one bundle. Broadcom’s list price for VCF is high, but they announced a 50% list price reduction to encourage adoption​. Even with that, assume VCF costs $20,000 per host/year (hypothetical). For 100 hosts, that’s $2,000,000/year – roughly double the legacy cost. This includes everything, possibly with some premium support.
  • Option 2: License individual components separately. The company could subscribe to vSphere + Aria Operations, and add NSX and vSAN a la carte (if Broadcom allows separate sale via add-ons):
    • vSphere subscription (Enterprise equivalent) at, say, $5,000 per 16 cores. Each host has 2 CPUs, each with 20 cores (40 cores in total per host). That’s 3 * 16-core packs per host (rounded up), so $ 15,000 per host. For 100 hosts, vSphere costs $1.5 M.
    • Aria Operations (vROps) for 100 hosts (assuming around 2,000 VMs) might be, say, $300 per VM per year, which is $ 300,000 (or if per CPU, maybe another $ 500,000).
    • NSX for 50 hosts – if priced per CPU, maybe $4k per CPU * 100 CPUs = $400k.
    • vSAN for 20 TB – if moved to subscription capacity licensing, perhaps $10k per TB = $200k.
    • Total Option 2 ≈ $1.5M + $0.6M + $0.4M + $0.2M = $2.7M/year. This is higher than Option 1 (which suggests Broadcom wants to incentivize you to take the full suite like VCF). The individual sum is approximately 2.5 times the legacy cost (which aligns with reports of 2- 3 times increases).
  • Option 3: Optimize usage under the new model. The company decides to drop vRealize Automation (since they weren’t heavily using it) and initially forego Aria Operations by using only basic vCenter monitoring. They also reduce NSX usage to 30 hosts (for critical segments only). Under this optimization:
    • vSphere = $1.5M (same 100 hosts).
    • Aria Operations = $0 (drop it).
    • NSX = 30 hosts * 2 CPUs * $4k = $240k.
    • vSAN = maybe they archive some data and reduce to 15 TB = $150k.
    • Total ≈ $1.89M/year. This is still ~80% higher than $1.06M, but significantly less than $ 2.7 M. The trade-off is that they lost some functionality (no vRA, reduced NSX scope, less vSAN capacity).

From the above, it’s clear that the way you slice it matters. Broadcom’s bundling might ironically be the “cheapest” way to get everything (Option 1), but it forces you to pay for all components. If you truly need all the pieces, you face a roughly 2x cost increase (in our example).

If you pick and choose components (Option 2), you may end up paying even more because standalone pricing can be punitive. The best approach financially (Option 3) was to trim usage and only pay for critical components, which still resulted in a higher cost than before.

Still, the increase was moderated (~80% increase instead of 150% or more).

Now, consider a former CA Technologies suite example for comparison:

Scenario: CA Suite Unbundled: A company used CA’s suite for IT monitoring and service management, which included CA APM (Application Performance Management), CA Service Desk, and CA UIM (infrastructure monitoring) under one enterprise agreement for $500k/year. After Broadcom acquired CA:

• Broadcom offers each as a separate subscription. The company needs APM and Service Desk, but can live without UIM (they have partly transitioned to another monitoring tool).
• CA APM now costs $ 300,000/year standalone for their usage tier, Service Desk costs $ 250,000/year, and UIM (if they kept it) would have been $ 150,000/year. If they license all, it’s $ 700,000 (a 40% increase for all components). By dropping UIM, they pay $550k – still a 10% increase for less functionality. They negotiate a 3-year deal at $ 500,000 per year to keep costs flat in exchange for a longer commitment, essentially convincing Broadcom to maintain its old bundle price in return for a three-year renewal. This was an acceptable outcome: no increase, but they did drop one component and had to commit for a longer period.

These scenarios underscore the importance of evaluating total cost under different licensing combinations. CIOs should perform similar analyses with their data. Include not just license fees but also operational costs in TCO:

• If you drop a tool, is there a cost to hire more staff or use a manual process instead?
• If you take a new bundle, are there training or implementation costs for components you didn’t use before but are now paying for?

In many cases, the component-based model will lead to higher total cost of ownership (TCO), but by identifying which components yield the most value per dollar, you can make informed decisions about what to keep and what to cut.

To further guide these decisions, let’s look at how some enterprises are navigating Broadcom’s licensing approach.

Enterprise Adaptation Case Studies (Anonymized)

Case Study 1: “Global Bank Co.” – Preserving Value by Early Renewal

A global financial services company, which uses VMware vCloud Suite across thousands of VMs, took a proactive stance as soon as the Broadcom acquisition was finalized. Situation: They had an Enterprise License Agreement (ELA) that was due to expire in 12 months, covering vSphere, vRealize Operations, and Automation.

Challenge: Broadcom’s initial communication indicated their ELA would not be renewed under the old terms, and ala carte pricing would triple their costs.

Actions: The CIO initiated executive-level talks with Broadcom within a month of the acquisition’s close. Leveraging the bank’s strategic importance (they’re a top-50 VMware customer), they negotiated an early renewal: essentially signing a new three-year agreement before the existing one lapsed, which carried over much of the bundle pricing.

In return, Broadcom got the bank to agree to transition all licenses to subscription by the end of that period and slightly increase their coverage (adopting one new product, vRealize Log Insight, as a show of good faith). Outcome: The bank secured a deal where year-1 cost remained at legacy levels, and years 2 and 3 have a capped single-digit percentage increase. This gave the bank time and budget stability to plan for the post-year-3 period, and Broadcom secured a committed customer through the transition.

The key lesson is that early, high-level engagement and a willingness to commit longer can protect you from the worst of the price hikes – essentially, negotiate a bridge to Broadcom’s model rather than falling off a cliff.

Case Study 2: “Tech Manufacturer Inc.” – Rightsizing and Selective Adoption

A multinational manufacturing company relied on both VMware and CA products. They had VMware vRealize Suite for cloud management and a legacy CA network monitoring tool.

Situation: After Broadcom’s changes, they faced a 100% increase on the VMware side and an announcement that their CA tool would be end-of-sale in 1 year (with a Broadcom alternative available at a higher cost).

Challenge: They needed to cut costs or find a budget for roughly an extra $2 million annually if they kept the status quo. Actions: The IT leadership performed a deep usage analysis. They discovered that within the vRealize Suite, they were underutilizing vRealize Automation – only a few test/development processes were using it.

They decided to drop vRA instead of subscribing to its new version, focusing on retaining vRealize Operations for monitoring, which was deemed critical. For the CA network tool, since it was being phased out, they opted not to adopt Broadcom’s replacement. Instead, they expanded the use of VMware’s NSX visibility features and an open-source tool to cover that gap, staying within the allowed guidance as NSX was already in use.

They approached Broadcom with this plan and negotiated a package: they purchased a Cloud Foundation bundle for VMware, which included NSX (giving them some network monitoring capabilities) and vRealize Operations, but not Automation. They also negotiated a one-year extension on the old CA tool support to have more time for its replacement.

Outcome: Their VMware annual spend increased by only around 30% (instead of 100%), as dropping vRA saved a significant amount, and Broadcom offered a bundle discount for committing to Cloud Foundation for 3 years. The CA tool was sunset on its terms after a year.

The lesson here was selective adoption – by understanding what they could live without and consolidating needs into one bundle, the company minimized cost impact and avoided paying for a Broadcom replacement that they didn’t truly need.

Case Study 3: “RetailCorp” – Negotiating a Custom Bundle

A large retail chain was using a mix of VMware products: vSphere, vSAN, Site Recovery Manager (SRM), and vRealize Log Insight, but not the entire vCloud Suite. They purchased these à la carte historically.

Situation: With Broadcom’s new model, some of these (vSAN, SRM) were only offered as part of bigger bundles or costly add-ons. The initial quote to cover their environment with Cloud Foundation (including SRM, etc.) was nearly 2.5 times their current spend, which was a non-starter for their CFO.

Actions: RetailCorp’s CIO took a hard line in negotiations, essentially saying they would forgo SRM and look for alternate DR solutions if Broadcom couldn’t meet their budget constraints. They also pointed out that they didn’t use NSX at all, and thus Cloud Foundation was giving them no value there.

After multiple rounds, Broadcom offered a custom bundle: for a price about 50% higher than their current one, they packaged vSphere, vSAN, SRM, and Log Insight for the retailer, excluding NSX. This was not a standard SKU, but an accommodation to keep the customer. The deal was structured as a two-year subscription, giving Broadcom a chance to upsell NSX later, perhaps, but at least locking RetailCorp in for those components.

Outcome: The retailer avoided a 150% cost jump and settled for a 50% increase with a tailored bundle. They did have to agree to evaluate NSX during that period (Broadcom’s ask), but not to purchase it outright. The takeaway is that if a customer is ready to drop a product (like SRM) and has a credible plan, Broadcom may prefer to make a custom deal to keep the customer using their stack, albeit at a slightly reduced scope.

Case Study 4: “HealthOrg” – Facing the Ultimatum

Not all stories are positive. A mid-sized healthcare organization with a modest VMware footprint (and no large leverage) encountered the brunt of Broadcom’s policies.

Situation: They used vSphere and vCenter extensively, with vRealize Operations for monitoring, under a smaller license set. Post-acquisition, Broadcom told them their only option for renewal was to move to the vSphere Foundation bundle (which included more than they needed) at an annual cost that was 3x their previous spend.

Challenge: Being relatively small, they lacked influence, and their attempts to negotiate were met with inflexibility— a “take it or leave it” stance. They considered alternatives, such as shifting some workloads to the public cloud or using another hypervisor for new projects, but in the short term, they couldn’t remove VMware from their hospitals.

Actions: Ultimately, HealthOrg negotiated for time; they signed a one-year subscription (instead of three) at a high price, essentially buying a year to decide on their long-term strategy. During that year, they engaged consultants to optimize their VMware usage and also started a pilot with an alternative virtualization platform for non-critical workloads.

Outcome: In the short term, they had to absorb the budget hit (reallocating funds from other IT projects). However, they used the year to reduce their VMware host count through consolidation and plan a partial migration.

When they returned to the table the next year, their needs were smaller (they had 20% fewer hosts to license), and they had an RFP out for potential alternative solutions. This time, Broadcom offered a modest discount to retain the remaining business.

The lesson here is that even if you have little leverage, you can buy yourself time and trim costs internally to improve your negotiating position later. It also underscores that not every customer will get a friendly deal – contingency planning (even if it means exploring other vendors down the line) can be necessary.

These case studies highlight various approaches, including early proactive negotiation, strategic scope reduction, pushing for custom deals, and worst-case acceptance with a plan to regroup. Every organization’s context is different, but the common thread is active management of the situation. CIOs who treat Broadcom’s licensing changes as a major initiative – involving executive attention, rigorous analysis, and possibly creative technical adjustments – tend to fare better than those who renew and accept whatever terms are given.

Now, synthesizing all of the above, we conclude with a checklist of what CIOs and IT sourcing leaders should do immediately to navigate Broadcom’s approach to packaging.

What CIOs Should Do Now – Final Action Plan

In summary, Broadcom’s shift from suite-based licensing to component-based (and new bundled) pricing for VMware and former CA products presents challenges that can be overcome with diligent action.

Here is a consolidated action plan for CIOs and IT sourcing leaders:

• 1. Develop a Comprehensive Inventory: Document every VMware and CA product in use, especially those obtained via bundles. Know your current entitlements and usage in detail.
• 2. Pinpoint Business-Critical Components: Classify each component by its criticality to the business. Focus negotiations on protecting and securing favorable terms for Tier 1 critical tools, and be ready to drop or find workarounds for lower-tier ones if necessary.
• 3. Engage Stakeholders and Set Expectations: Communicate with finance about potential cost increases and with operations about possible changes in toolsets. Early transparency ensures you have support when tough decisions arise.
• 4. Get Clarity from Broadcom: Don’t operate on assumptions. Request official information about product packaging changes that are relevant to you. If something is unclear (e.g., “Will vRealize Suite be renewed or do I need Aria subscriptions?”), Press the vendor for answers in writing.
• 5. Plan Your Financials: Model best-case, expected, and worst-case cost scenarios for the next 3-5 years under Broadcom’s model. Use these models to inform your budgeting and establish negotiation targets (e.g., “keep the increase under 50% over 3 years” might be a target).
• 6. Leverage Timing: If your current contracts expire in 2024 or 2025, you are among the first wave facing these changes. Use that to your advantage by requesting transition assistance, such as discounts, credits, or extensions. Broadcom might be more flexible early on to avoid a rash of customer losses. If your renewal is further out, monitor the outcomes of early renewers (via Gartner, forums, or advisors) to calibrate your approach.
• 7. Strengthen Negotiating Posture: Gather all leverage you can – know your alternatives (even if not ideal), align internally on must-haves and walk-aways, consider engaging a licensing expert, and if you’re a big account, be prepared to escalate within Broadcom. Enter negotiations with a data-packed proposal of your own rather than just reacting to their quote.
• 8. Secure the Deal and Conduct an After-Action Review: Once negotiations conclude, thoroughly review the final contract to ensure the accuracy and completeness of all negotiated points. After signing, do an internal post-mortem: What went well? What could we improve next time (e.g., in 3 years at renewal)? This is a learning opportunity, as Broadcom’s tactics with VMware may serve as a template for other vendors as well – having a skilled negotiation team pays dividends beyond this instance.

Final Thought: Broadcom’s unbundling and repricing strategy is a textbook challenge in vendor management. It tests an organization’s ability to adapt quickly, analyze its technology value, and stand its ground in negotiations.

By following a structured playbook – inventory, assess, plan, negotiate, and adapt – CIOs can turn this challenging situation into an opportunity.

It’s a chance to clean up unused software, reinforce internal financial discipline, and ultimately ensure that your company is only paying for the technology value it truly needs. In the end, the goal is to navigate Broadcom’s changes with minimal disruption and position your IT portfolio for success under the new licensing paradigm.

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