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Last time we showed you that leaving is hard, slow and usually incomplete. So a fair question is what leverage you have left. The answer is quite a lot, but almost none of it is the thing people reach for first. Threatening to leave is the weakest card in this particular hand, because the vendor knows the completion statistics better than you do.
I am Claire, Daniel is with me, and this episode is about the four sources of leverage that actually move a Broadcom negotiation, in rough order of how much they are worth.
The strongest is the least exciting: the rights you already paid for. Look at what happens when customers assert them. T-Mobile wanted continued support. Broadcom wanted about twenty four million dollars for two more years across six products.
T-Mobile offered twenty million. The court compelled the support for five point two eight million, plus a five hundred thousand dollar undertaking. That is roughly a fifth of the ask, obtained by enforcing an existing right rather than negotiating a discount. UnitedHealthcare's filing produced a Broadcom stipulation to maintain access through judgment, without an injunction ever being granted.
And a Dutch court ordered exit support under a penalty of two hundred and fifty thousand euros per day.
The second is a gift, and it came from the chief executive on an earnings call. Hock Tan said that ninety percent of the top ten thousand customers had subscribed to Cloud Foundation, up from eighty seven percent a quarter earlier. Then he added this, carefully. They bought licenses to deploy it, it doesn't mean they are fully deployed.
And he called the next two years the hard work of getting them deployed. So the vendor has publicly conceded that a large share of what it booked is sitting undeployed. If your account team argues that you should pay for capability you are not using yet, that sentence is the answer, and it is theirs.
Third is timing, and you can read it straight off the accounts. Infrastructure software grew twenty six percent across the 2025 financial year. Then one point four percent in the following quarter. Then eight point eight.
That collapse is not a market problem, it is the one time perpetual to subscription conversion running out, and it means the growth now has to come from renewals rather than from conversions. There is a published number to hit and only your renewal to hit it with. CA's own filing tells you where those land: a substantial portion of our license agreements are executed in the last month of a quarter. Know which quarter you are in.
The fourth is structural and most buyers never use it. Ask for termination for convenience. Not because you intend to use it, but because Broadcom's revenue recognition depends on the commitment being non cancellable. A contract you can walk away from cannot be recognised the same way, which makes that clause genuinely expensive for them to concede.
That turns it into a priced asset rather than boilerplate. You can trade it away deliberately, for a cap on the next term or for price protection, instead of never asking and getting nothing for it. Ask for it early, so that giving it up is worth something.
One caveat we say out loud to every client, because it changes what you should be aiming at. Every credible alternative in this market is private equity owned and working toward an exit. BMC is splitting under KKR with an initial public offering explored at up to fifteen billion dollars. Rocket sits under Bain with a reported sale target of eight to ten billion.
Precisely is on its third private equity owner. So leaving Broadcom changes your counterparty. It does not exit the asset class, and the same pressures will arrive at the new vendor in due course. What a migration genuinely buys you is a reset of the contract terms at the moment your leverage peaks.
And the sharpest rhetorical asset in the whole engagement belongs to Broadcom. When CA was the challenger trying to win customers away from competitors, its own conversion literature said that vendor tooling is only a tiny aspect of the overall migration, that migration efforts exceed the annualized savings of switching, and that attempting one without the right skills is a recipe for chaos. Every argument their account team will use to tell you that leaving is impractical, they published first, in reverse. Read it back across the table.
Next time, Tom and Daniel take the VMware deal apart document by document.
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