AT&T Slams Broadcom's VMware Price Hike: A 1,050% Increase

Axel S�rensen

5 min read

Post on Apr 24, 2025

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The Staggering 1050% VMware Price Increase

The sheer magnitude of the VMware price increase is breathtaking. Broadcom's new pricing structure has left many existing VMware customers scrambling to understand the implications.

Details of the Price Hike

The price hike affects a range of VMware products, with some experiencing increases far exceeding the average 1050% figure. While precise details remain somewhat opaque, reports indicate significant increases across various licensing models.

• Specific product names and previous vs. new pricing: Precise figures are not yet publicly available for all products, but anecdotal evidence from AT&T and other affected companies points to extremely significant jumps in costs for core VMware vSphere, vSAN, and NSX offerings.
• Percentage increase for different licensing models: The percentage increase varies depending on the licensing model, the specific product, and the customer’s existing contract. Some reports suggest that perpetual licenses have seen the most dramatic increases.
• Impact on different sized businesses (small, medium, large): While large enterprises like AT&T have the resources to publicly challenge the increase, smaller and medium-sized businesses (SMBs) are likely to feel the brunt of this price hike disproportionately, potentially impacting their budgets and competitiveness.
• Geographic regions affected by the price hike: While the impact is global, the specific pricing adjustments and their effects may vary slightly depending on regional factors and existing contracts.

AT&T's Public Response and Concerns

AT&T's vocal opposition to the price hike signals a potential turning point in the relationship between enterprise customers and software vendors. Their response highlights the growing concerns about unchecked price increases in the enterprise software market.

AT&T's Statement and Actions

AT&T publicly denounced the price hike as unreasonable and unjustified. They've expressed serious concerns about the impact on their IT budget and the potential implications for their operations.

• Quotations from AT&T executives regarding the price increase: Specific quotes from AT&T executives condemning the price increases as "unacceptable" and "exploitative" have been widely reported in the tech press.
• Specific concerns raised by AT&T (e.g., impact on budget, fairness of the increase): AT&T has publicly stated the significant impact on their IT budget, questioning the fairness and justification of such a dramatic price increase for existing customers.
• Potential legal actions or negotiations being considered: While not explicitly stated, the intensity of AT&T's response suggests the possibility of legal action or aggressive negotiations with Broadcom to mitigate the impact of the price hike.

Broadcom's Justification for the VMware Price Hike

Broadcom has yet to provide a fully satisfactory explanation for the dramatic price increase, fueling further speculation and industry concern.

Broadcom's Official Explanation

Broadcom's official statements have largely focused on justifying the price increase as necessary to support R&D and maintain their market position. However, many in the industry view this explanation as insufficient given the magnitude of the price jump.

• Broadcom's statements regarding the price increase: Broadcom’s public statements have largely been vague, citing investments in innovation and improved features as justification for the cost increases.
• Reasons cited for the increase (e.g., R&D costs, market demand, improved features): While R&D is a valid cost driver, the scale of the price increase far surpasses what's typically seen in comparable enterprise software updates.
• Comparison to price increases in similar enterprise software: Industry analysts are comparing the VMware price hike to other recent price increases, but few, if any, match the sheer magnitude of this change.

Impact on the Broader Tech Industry and Businesses

The ripple effects of this price hike extend far beyond AT&T and VMware. This situation sets a concerning precedent for the entire tech industry.

Wider Implications of the Price Hike

This price increase is forcing businesses to re-evaluate their cloud strategies and explore alternative solutions. The potential consequences are significant.

• Potential for increased cloud computing costs: The VMware price hike may prompt other cloud software vendors to follow suit, leading to a broader increase in cloud computing costs for businesses.
• Impact on business budgets and IT planning: Businesses are facing budget constraints and uncertainty regarding long-term IT planning due to the unpredictability of software licensing costs.
• Pressure on businesses to explore alternative virtualization solutions: The price increase is accelerating the adoption of open-source virtualization technologies and alternative solutions among businesses.
• Potential for antitrust concerns: The significant impact on the market and potential for monopolistic practices are raising concerns about potential antitrust investigations.

Conclusion

The Broadcom-VMware price hike, resulting in a shocking 1,050% increase for some customers, represents a pivotal moment for the enterprise software market. AT&T's strong response underscores the industry's concern about the lack of transparency and the potential for exploitative pricing practices. Broadcom’s justification remains unconvincing, leaving many questioning the future of enterprise software licensing. The impact extends beyond individual companies, affecting cloud costs, IT planning, and potentially sparking antitrust scrutiny.

What are your thoughts on the AT&T/Broadcom/VMware situation? Is this VMware price hike justifiable? Are you exploring alternatives to VMware due to this significant cost increase? Learn more about the ongoing AT&T and Broadcom VMware price hike debate. This event’s long-term consequences for software licensing, cloud costs, and the broader tech industry remain to be seen. The debate surrounding the AT&T, Broadcom, and VMware price hike is far from over, and its ramifications will undoubtedly shape the future of enterprise software.