Negotiating with Broadcom – Best Practices

Executive Summary:

Broadcom’s acquisition of VMware has dramatically changed the tone and tactics of enterprise software negotiations. CIOs must adjust to a vendor that is far less flexible and highly financially driven in its approach.

This CIO playbook provides an overview of Broadcom’s negotiation style and offers concrete strategies for negotiating effectively for VMware (and other Broadcom-acquired software, such as Symantec and CA) contracts.

It offers guidance on dealing with steep price increases, rigid terms (like mandatory multi-year commitments and 20% late-renewal penalties), and how to push back constructively.

The goal is to equip CIOs with a pragmatic plan – from early preparation and stakeholder alignment to escalation tactics and leveraging the entire Broadcom portfolio – to secure the best possible terms.

Use the actionable recommendations and examples in this playbook to navigate renewal discussions with confidence and insight.

Broadcom’s Post-Acquisition Negotiation Style and What It Means for CIOs

Broadcom is known for a “profitability-first” ethos, especially after its major software acquisitions. Unlike the more customer-centric approach VMware had in the past, Broadcom’s style is often described as “take it or leave it” with minimal wiggle room on terms​.

In practice, this means CIOs will encounter a tougher stance during renewals:

• Less Flexibility on Pricing and Discounts: Broadcom believes that VMware was too generous with discounts in the past, and it has tightened its discounting significantly. Many organizations now struggle to get even half the discount percentage they used to enjoy under VMware​. Broadcom’s sales teams are rigorously financially driven – every contract is viewed through a lens of maximizing revenue and margin. As a result, initial renewal quotes often come in much higher (5× or more in some cases) than previous VMware contracts, with limited willingness to negotiate those rates down.
• Rigid Bundles and Terms: Broadcom has simplified the VMware product portfolio into a few big bundles, and perpetual licenses have been eliminated. Customers must transition to subscription bundles (e.g., VMware Cloud Foundation) even if they only need a subset of features. This “all-or-nothing” packaging forces many to pay for products they don’t use. Contract terms have also become more rigid – for example, Broadcom requires multi-year commitments (often 3-year minimum) on renewals of core products, removing the option of convenient annual renewals​. Such terms are designed to lock in customers and revenue predictability for Broadcom. Still, they reduce flexibility for CIOs who may prefer year-to-year agility or are considering alternative solutions.
• Strict Renewal Policies (and Penalties): Perhaps most concerning is Broadcom’s hard-line stance on renewal timing. Missing a renewal deadline now triggers a hefty 20% “late renewal” penalty on your contract​. In other words, if your support/subscription lapses even briefly, Broadcom will charge roughly 20% extra when you eventually renew – a practice virtually unheard of under VMware’s old regime. This punitive fee puts enormous pressure on IT leaders to renew on time (or early). CIOs must treat renewal dates as immovable deadlines, since Broadcom has zero tolerance for delays. Internal budgeting and approval processes need to accommodate these strict timelines; otherwise, organizations risk an automatic price hike. Pushing back on this penalty is difficult, so the strategy is to avoid it in the first place (more on that in the Recommendations section).
• Focus on Top-Tier Customers: Broadcom’s sales attention is largely skewed toward its biggest “strategic” clients​. After acquiring VMware, Broadcom reduced the VMware partner and reseller ecosystem and moved many accounts in-house, prioritizing the largest enterprises. Smaller and mid-sized customers have reported feeling deprioritized – some were even dropped to self-service or partner-only status if they didn’t meet revenue thresholds. For CIOs, this means that if your organization is a major account (e.g., a Fortune 500 company or otherwise significant), you may have a dedicated Broadcom account team but will likely face very aggressive sales tactics. If you’re a smaller client, you might have less direct support and find Broadcom even less responsive to special requests. In either case, expect negotiations to focus strictly on financial terms, with less emphasis on the relationship-building and flexibility that VMware’s teams might have shown previously.

Implications for Renewals: The upshot of Broadcom’s approach is that renewal negotiations can feel like high-stakes showdowns. CIOs need to prepare extensively and not assume any “goodwill” pricing or easy exceptions.

Every ask (like retaining a past discount or getting a contractual concession) will likely need strong justification and possibly escalation to higher-ups. The following sections outline strategies to level the playing field and achieve more favorable outcomes despite Broadcom’s tough posture.

(Table 1 below provides a quick comparison of the VMware vs. Broadcom approach to give context to CIOs entering negotiations.)

Table 1: VMware vs. Broadcom negotiation approach – understanding the shift in vendor behavior.

Key Negotiation Strategies for CIOs

To effectively negotiate with Broadcom, CIOs need to adopt a proactive and well-prepared strategy. The following best practices will help you counter Broadcom’s tough stance and improve your leverage at the bargaining table.

Each tactic is aimed at addressing specific challenges – from sticker shock on pricing to inflexible contract terms – and turning those around to favor the customer. Combining these strategies will put you in the strongest position to secure a fair deal:

• Start early and involve procurement and finance: don’t wait until the last minute to begin your renewal process. Broadcom’s strict policies and timelines mean delays can cost you dearly (e.g., that 20% late fee). Begin internal preparations at least 12 months before renewal: conduct budget planning, get your CFO and procurement teams on board early, and set clear goals for the negotiation. An early start gives you time to evaluate alternatives and also line up executive support. By engaging well ahead of the contract expiration, you avoid being cornered by Broadcom’s time pressure tactics. For example, one large enterprise started renewal discussions a full year in advance, which allowed them to escalate issues and still close before the deadline, completely sidestepping Broadcom’s penalty fee. Involve procurement professionals from the outset to help map out negotiation tactics, validate pricing benchmarks, and ensure all internal approvals are ready when needed. Early involvement of finance also means you can secure funding for a potential price increase or a multi-year deal before you’re up against the clock.
• Audit Your Current Usage and Rights: Knowledge is power in any negotiation. Take the time to conduct a thorough audit of your VMware (and other Broadcom software) usage before meeting with Broadcom. Inventory all licenses, deployments, and features in use. Identify under-utilization – are you paying for 1000 cores when only 800 are in active use? Are you licensed for components you don’t need (e.g., NSX or vSAN features that came as part of a bundle)? By pinpointing your real needs, you can avoid Broadcom upselling you unnecessary components. Additionally, document any entitlements or special terms you have from past VMware contracts. For instance, you may have an Enterprise License Agreement (ELA) that allowed extra deployment capacity,
  price caps on renewals, or grandfathered support rates. These prior commitments are critical leverage – insist that Broadcom honor them in the new contract or provide equivalent value. (One tip: if your previous VMware ELA included a clause capping price increases at say 5% annually, bring that up and push Broadcom to include a similar cap as we advance). By coming to the table with detailed usage data and legacy contract facts, you not only prevent Broadcom from overcharging you for unused licenses, but you also strengthen your case when asking for continuity with pre-acquisition promises.
• Aggregate Your Demand across Broadcom’s Portfolio: Broadcom tends to pay more attention when the deal size is large. Wherever possible, bundle and coordinate your negotiations to increase the total contract value on the table. If your company also uses other Broadcom-acquired products, such as security software from the Symantec portfolio or mainframe and DevOps tools from the CA Technologies portfolio, consider aligning their renewal timings to coincide with your VMware negotiations. By presenting a combined front (e.g., “We are renewing VMware, Symantec Endpoint Protection, and CA 1** products all at once”), you create a bigger deal that Broadcom’s team will want to win. This can open the door to broader concessions, like an overall discount applied across the portfolio or more favorable terms on one product line in exchange for commitments on another. Even within VMware, co-term all your VMware licenses so they renew together, rather than piecemeal. Broadcom is more likely to offer concessions for a larger, consolidated renewal than for many small, separate ones​. Leverage this by negotiating one master agreement covering all your Broadcom software needs; not only will you get volume-based bargaining power, but you’ll also simplify management with one contract. Example: A multinational firm synchronized the renewal of its VMware ELA and a Symantec security contract to the same date, turning two $5 million deals into one $10 million negotiation. In the end, they secured an extra 5% discount across both and additional flexibility in payment terms. This result would have been much harder to achieve if each had been negotiated in isolation.
• Escalate to Senior Broadcom Contacts When Needed: Don’t hesitate to go over your account manager’s head if you’re facing unreasonable terms. Strict guidelines often bind Broadcom’s front-line sales reps and might reiterate “policy.” If you hit a wall with your assigned rep or sales team, engage higher-level Broadcom executives or account directors. For strategic enterprise customers, involving your CIO, CTO, and CFO in discussions with Broadcom leadership can be effective. High-level engagement signals to Broadcom that this deal is a top priority and that you are committed to receiving fair treatment. It can sometimes prompt exceptions or creative solutions that a lower-level rep could not offer. For instance, some government sector CIOs have successfully escalated to VMware executives in Broadcom’s division to negotiate special terms when standard channels were unyielding. Use formal escalation paths if they exist (like an Executive Sponsor program), or simply request that a Broadcom account director or even a VP join a call to review your concerns. When you do escalate, be sure to articulate the long-term partnership value of your account (“We intend to spend $X million on Broadcom software over the next 5 years, but need these terms to make that viable.”). Broadcom, seeing a significant future revenue stream, may be more flexible in keeping you as a referenceable customer.
• Leverage Competitive Alternatives (Selectively): While migrating away from VMware or other Broadcom software is not a quick or easy process, having a credible Plan B can dramatically improve your negotiation outcome. Broadcom’s hardline stance tends to soften only when they believe a customer might walk away. As a CIO, you should invest in evaluating alternative solutions proactively – even if you prefer to stick with VMware, you need the optionality. Identify specific areas where you could replace or reduce VMware usage: for example, consider if some new workloads can go to a public cloud or use a different hypervisor (Hyper-V, Nutanix AHV, KVM, etc.), or if another vendor’s tools could replace certain security functions from Symantec. You don’t need to bluff unrealistically; instead, document a plausible migration plan for portions of your environment. Then, during negotiations, make clear that you have options. Mention pilot projects or RFPs underway (“We are testing Hyper-V for our branch offices” or “evaluating alternative endpoint protection for 2024”). Competitors are actively targeting disaffected VMware customers with “migration incentives,” and Broadcom is aware of this. By calmly stating that you will migrate some share of workloads to other platforms if the Broadcom deal isn’t acceptable, you create pressure on them to consider concessions. One enterprise reported that after outlining a plan to shift 30% of their VMware estate to the cloud, Broadcom surprisingly came back with a special three-year offer priced at roughly the cost of one year – an extraordinary concession aimed at retaining the customer for the long term. The lesson: you don’t necessarily have to leave VMware, but you must show that you could. This will make Broadcom think twice about taking a completely inflexible stance.
• Push Back on Punitive Terms & Seek Flexibility: In Broadcom’s standard contracts, many terms are tilted in their favor, but that doesn’t mean you can’t negotiate them. Scrutinize the fine print for any punitive clauses such as the 20% late renewal fee, rigid “no downsizing” commitments, or audit rights that are too intrusive. Make it a negotiation point to remove or soften penalties: for example, ask for a reasonable grace period on renewals or a one-time waiver of the 20% fee if circumstances cause a slight delay. Similarly, if Broadcom’s proposal doesn’t allow you to reduce license counts over a multi-year term, push for an exception that lets you decrease usage by X% if your business shrinks or you optimize your environment. Broadcom will resist these changes, but if you’ve shown you’re prepared and have alternatives, you may get some concessions. At the very least, raising these issues puts Broadcom on notice that you are an informed customer. During one negotiation, a retail industry CIO pointed out that a proposed contract had no clause for returning or exchanging unused licenses, and managed to negotiate the right to swap a certain number of licenses for other products if they were not used, rather than being stuck paying for shelfware. Reference any VMware promises you had: for instance, if VMware had previously committed to let you flex usage up or down in an ELA, use that history to argue for similar flexibility now. Remember, everything is on the table in a major enterprise negotiation – even if Broadcom’s default answer is “no”, persistence and a solid business rationale can carve out important exceptions.
• Consider Multi-Year Commitments and Partnership: Broadcom’s endgame is to secure long-term revenue, so use that to your advantage. If you have confidence that your organization will remain with VMware’s technology for a while, you can offer a longer commitment in exchange for better terms. For example, propose a 3-year or 5-year renewal instead of just 1 year, but only if Broadcom significantly improves pricing or contract conditions. In negotiating such a deal, insist on price locks or caps – you want to shield your company from any further Broadcom price hikes for the term​. Emphasize the partnership aspect: “We’re willing to commit for five years, but we need stability and the right price to justify that investment on our side.” This framing appeals to Broadcom’s financial motives while also positioning your company as a key long-term client (which they might treat more carefully). Be cautious, however: don’t extend the term beyond what your IT roadmap allows. If you expect to migrate away from a product in 3 years, don’t sign a 5-year deal just for a discount. It’s about finding the sweet spot where a multi-year agreement secures value for both parties. Broadcom has been known to provide small discount incentives for multi-year prepayments or commitments. Locking in a multi-year deal in 2025 could save you from the rumored annual increases in 2026 and 2027. In sum, show Broadcom you’re interested in a win-win long-term relationship – if they make the terms palatable, they’ll keep a loyal customer; if not, you’re ready to explore other options when the time comes.
• Document Everything and Get Promises in Writing: As a final note, ensure that every concession, discount, or special term discussed is documented in writing. Broadcom’s negotiations can be complex, and verbal assurances might not make it into the final contract unless you insist. If a sales rep says, “We’ll waive that fee” or “You’ll get X% off if you sign by next week,” politely ask them to send an email confirming it and ensure it is reflected in the contract or an amendment. Having a paper trail is crucial for holding Broadcom accountable later, especially given the personnel changes that often follow acquisitions. Likewise, carefully review the final agreements to verify that the clauses for flexibility, service levels, and other key points are exactly as negotiated. Don’t rely on trust—rely on contract language.

Actionable Recommendations for CIOs

In summary, here is a checklist of actionable steps and best practices for CIOs preparing to negotiate with Broadcom.

These recommendations distill the strategies above into concrete actions you can take before, during, and after the negotiation process:

1. Align and Educate Your Team Early: kick off renewal planning 12-18 months. Brief your procurement, finance, and technical teams about Broadcom’s new licensing model and hardball tactics. Assign roles – for example, procurement to gather pricing benchmarks, IT to audit usage, and finance to model budget impact. An early start ensures you won’t be caught off guard by Broadcom’s timeline and gives you room to maneuver.
2. Audit Your License Usage and Needs: Conduct a comprehensive internal review of all VMware, Symantec, and CA software usage. Identify redundant or underused licenses that can be eliminated. Document what features and capacity you truly need going forward. This audit report will serve as your fact base to counter bundle offerings and avoid overbuying. Use it to craft a requirements list to present to Broadcom, focusing on what you need (and pointing out what you don’t need).
3. Gather Historical Entitlements and Agreements: Pull out your last VMware contracts, ELAs, or any commitments made by VMware’s team. Make a summary of favorable terms you had (discount percentages, price protections, special use rights, etc.). Use this in negotiation to ask Broadcom to match or honor those prior commitments. For example, “Our 2020 VMware ELA included an 18% discount and allowed 10% growth without additional charge – we expect continuity on similar terms under Broadcom, given our long relationship.” Even if Broadcom doesn’t fully agree, this sets a benchmark and rationale for why you deserve better terms than a net-new customer.
4. Develop a Negotiation Game Plan: Formulate your negotiation strategy and walk through scenarios with your team. Decide on your “must-haves” (e.g., no 20% penalty, at least X% discount, ability to drop certain products) and “trade-offs” (what you’re willing to concede, such as longer term or slightly reduced scope). Also, outline an escalation path: who in your organization will engage if talks stall (e.g., CIO, CFO), and request to schedule meetings with Broadcom executives well in advance if needed. Having a game plan ensures you present a united front and don’t make ad-hoc decisions under pressure.
5. Engage with Broadcom using your data and Requirements: When negotiations start, lead with a fact-based approach. Share your prepared usage data and requirements checklist. Make it clear you are informed about their changes (acknowledge you’re aware of the subscription model, core-based pricing, etc.), but also firm about what you need adjusted. For instance: “We understand everything is subscription now, but given we only use vSphere, we need a solution that doesn’t force us to pay for unused products. Here is our usage profile – let’s work out a fitting configuration and price.” Showing that you’ve done your homework sets the tone that you expect a thoughtful response, not just a standard quote.
6. Bundle Negotiations for Leverage: Time your VMware contract discussion to coincide with any other Broadcom product renewals, such as security or mainframe, if possible. Let Broadcom know that these are linked. Use language like “We’re looking at our Broadcom relationship holistically – including VMware and the Symantec tools – and we need an overall package that makes financial sense.” This signals that Broadcom could lose more than just one product’s revenue if they don’t work with you, upping the stakes on their side.
7. Refuse to Accept Boilerplate Penalties: If Broadcom’s proposal includes onerous terms (late fees, no cancellation, no reduction), address them head-on. Propose reasonable modifications: e.g., “We need a 30-day grace period on renewal to accommodate our internal approval process,” or “If we commit to 3 years, we should have the option to reduce our license count by 15% in year 2 or 3 if business needs change.” Not all requests will be granted, but you can put the spotlight on unfair terms and often negotiate at least partial relief (for example, some customers negotiated that the 20% late fee would only kick in after a 30-day lapse, effectively getting a short grace period). Always ask – the worst they can say is no, but if you don’t ask, you definitely won’t get it.
8. Escalate and Communicate Value: If you’re hitting a brick wall with the sales reps, elevate the discussion. Arrange for your CIO or another C-level executive to speak with Broadcom’s regional VP or account director, emphasizing your company’s loyalty to VMware’s technology and the sizable investment at risk. Sometimes, higher-ups can approve an extra discount or a custom term; they have more flexibility than they let on. When escalating, frame requests in terms of partnership: “We want to continue as a marquee customer for VMware. Let’s find a solution that works for both of us so we can sign a multi-year deal and be a strong reference for Broadcom.” This approach can turn an adversarial negotiation into a more collaborative problem-solving session.
9. Evaluate Alternatives and Make Them Known: Quietly continue exploring alternatives (such as other vendors or cloud migrations) during the negotiation period. You don’t need to threaten outright, but make mentions like, “Our board is curious about what moving to the cloud would cost compared to this renewal,” or “We’ve had demos of alternative endpoint security solutions.” Showing that you have a Plan B not only strengthens your resolve but also keeps Broadcom wary of overplaying their hand. If negotiations still don’t yield acceptable results, be prepared to pilot those alternatives to maintain credibility (and as a true fallback plan).
10. Consult Independent Licensing Experts (if needed): Broadcom’s contract nuances and hard tactics can be challenging even for experienced teams. Consider engaging an independent software licensing advisory firm, such as Redress Compliance, to support your negotiations. These experts have insight into Broadcom’s pricing trends and can identify contract pitfalls you might miss. They can also help benchmark the deal against other customers. An independent third party can provide negotiation scripts and fallback positions based on industry experience. Note: Ensure any consultant is truly independent and vendor-neutral (unlike, say, vendors who might push you to their services); the idea is to empower your team with knowledge, not to outsource the relationship. Using experts as behind-the-scenes advisors can be especially helpful for complex multi-product deals across VMware, Symantec, and CA portfolios.
11. Secure Multi-Year Protections (if signing long-term): If you do decide to sign a multi-year agreement with Broadcom, nail down protections: put a cap on annual price increases, include performance/service SLAs, and clarify what happens if products are discontinued. For example, if Broadcom bundles change or a product you use reaches end-of-life in 2026, ensure you have the right to an equivalent product or a refund or credit. These clauses guard you against future surprises. Multi-year deals can be beneficial in stabilizing costs, but only if they are airtight. Don’t assume Broadcom’s standard multi-year contract has your interests at heart – edit it until it does.
12. Maintain Executive Oversight and Regular Reviews: Even after the ink is dry, treat this vendor relationship as high-touch. Set up quarterly or biannual business reviews with Broadcom’s account team to monitor that promises (like improved support, roadmap commitments, etc.) are being kept. Keep your executive sponsors (CIO and CFO) informed about any emerging issues. This ensures that when the next renewal cycle comes, you are not starting from scratch – you have a documented history of issues and successes to reference. It also helps you continue the narrative of partnership, which can lead to better treatment over time.

By following the above steps, CIOs can regain some control in negotiations with Broadcom.

The key is preparation, persistence, and positioning – preparing your facts and team early, being persistent in pushing for fair terms, and positioning your company as a valuable customer (with choices) rather than a captive one. With these best practices, you can turn a daunting renewal process into a more manageable and even opportunity-rich exercise.

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