Broadcom faces backlash over VMware subscription changes amid AI shift

Source Cryptopolitan

Broadcom Inc., a global semiconductor and infrastructure software giant, is facing backlash from its clients over significant changes to VMware’s licensing model as it plans to pivot to AI.

When the tech company bought VMware in a $69 billion deal in 2023, its clients could choose from thousands of different products to manage their data centers. Before long, Broadcom reduced the number of products to five.

According to Hock Tan, Broadcom’s chief executive, the initial plan was to lower the VMware products to four. Still, clients stubbornly rejected a series of changes, leading to the addition of the fifth product.

Tan told the Financial Times in an interview:

One of the commitments we made was to make VMware easier to use and to make the whole availability of the product much simpler. Maybe going down to four was a bit too much . . . but we certainly do not need 8,000.

~ Hock Tan

VMware acquisition and AI integration will lead to higher earnings

Tan assured investors that the deal would earn huge profits, surpassing the $8.5 billion it initially expected. The deal has made Tan appear shrewd as he focuses on the next Broadcom acquisition.

VMware is the dominant alternative for firms uncomfortable handing over their data to US cloud providers in an era where artificial intelligence adoption dictates how data centers are run.

VMware’s virtualization system overcomes the underlying difficulties of the various servers, storage, and switches that make up a data center. This makes it possible to run as a software platform, allowing customers to spend less on hardware and making their infrastructure more resilient and secure.

According to Tan, VMware gives businesses control, ownership, and the ability to run their data centers. It resolves an issue that most businesses have struggled with for several decades. For the past two years, the success of ChatGPT has inspired businesses to assess and deploy AI tools for easy business operations. However, the element of control has become more critical.

Broadcom customers push back on changes

Data protection is a sensitive element in Europe, and several stringent data regulations target big tech firms. These rules always fuel the concept of “sovereign” data centers, where client or corporate data is kept in a data center, either by companies or a local cloud provider. 

The situation is ideal for Broadcom; its VMware is a competent alternative to the public cloud.

However, 2024 saw the company receive a lot of backlash, which made the firm take considerable time to improve how it sold VMware’s tools. It also shifted from upfront license fees for VMware’s products to an annual subscription that increased costs several times over. 

Towards the end of Q3, AT&T, the US telecoms group, accused Broadcom of trying to force it to pay a king’s ransom for a subscription it didn’t want. The firms eventually reached a consensus to resolve the matter.

Land a High-Paying Web3 Job in 90 Days: The Ultimate Roadmap

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Falls Below $4,100, Risks Dropping to $4,000 as High Oil Prices Reinforce Expectations of High Fed Rates During the Asian session on October 22, gold prices (XAUUSD) weakened further in intraday trade, with spot gold falling below the $4,100 mark to hit a low of $4,066.56, its lowest level s
Author  TradingKey
10 hours ago
During the Asian session on October 22, gold prices (XAUUSD) weakened further in intraday trade, with spot gold falling below the $4,100 mark to hit a low of $4,066.56, its lowest level s
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
14 hours ago
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Meta's AI bill just hit $145 billion — and it issued a new share class to pay for itMeta reported record third-quarter revenue of $64.60 billion, up 26% from a year earlier, and raised full-year 2026 capital expenditure guidance to $135-145 billion from $130-145 billion. To fund that build-out without touching Mark Zuckerberg's voting control, the company announced a 2-for-1 stock split that hands every Class A holder a new non-voting Class C share. Here are the four lines that matter, the peer group that is being re-rated alongside it, and the bull and bear cases.
Author  Irene Q.
14 hours ago
Meta reported record third-quarter revenue of $64.60 billion, up 26% from a year earlier, and raised full-year 2026 capital expenditure guidance to $135-145 billion from $130-145 billion. To fund that build-out without touching Mark Zuckerberg's voting control, the company announced a 2-for-1 stock split that hands every Class A holder a new non-voting Class C share. Here are the four lines that matter, the peer group that is being re-rated alongside it, and the bull and bear cases.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 22, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 22, 2026. Read on for the details.
Author  Mitrade
18 hours ago
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 22, 2026. Read on for the details.
placeholder
Today’s Market Recap: All Three Major U.S. Indexes Close Higher,SpaceX Up About 7.8% After Earnings, Supermicro Earnings Lift AI Stocksthe three major U.S. stock indices all closed higher. SpaceX (SPCX) beat expectations with its third-quarter earnings, an
Author  TradingKey
19 hours ago
the three major U.S. stock indices all closed higher. SpaceX (SPCX) beat expectations with its third-quarter earnings, an
goTop
quote