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Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →AT&T did not primarily sue Broadcom because its VMware licenses had been cancelled. The dispute was about whether AT&T could keep renewing support for software it had licensed perpetually after Broadcom moved VMware toward subscription products.
AT&T filed the case in New York Supreme Court on August 29, 2024. It alleged that Broadcom and VMware refused to renew support unless AT&T purchased unwanted subscription bundles costing hundreds of millions of dollars. Broadcom disputed that interpretation, arguing that AT&T had no right to force VMware to continue selling a discontinued support offering. The matter was later described by a subsequent litigant as having ended in a confidential settlement, so it did not produce a publicly reported ruling establishing a universal renewal right for VMware customers.
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What AT&T alleged
AT&T’s complaint alleged that Broadcom was refusing to renew maintenance and support for existing VMware perpetual licenses unless AT&T bought broader subscription products and services. AT&T characterized the demand as commercially excessive and said the bundled purchases could cost hundreds of millions of dollars, with the additional cost over support-only pricing described as tens of millions.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteAccording to AT&T’s complaint, its VMware environment included approximately 75,000 virtual machines on about 8,600 servers. AT&T said the systems supported customer service, operational management, public-safety functions and federal-government or national-security-related operations. Those figures and descriptions came from AT&T’s filing and should not be treated as independently audited facts.
AT&T said Broadcom’s position threatened to end support during a period when it still had a contractual right to renew. It sought emergency relief preventing termination, along with declaratory relief establishing its alleged renewal rights. The case was filed as AT&T Services, Inc. v. Broadcom Inc. et al., New York County Index No. 654490/2024. View the case listing.
Read the complaint and related court filing.
Why “perpetual” did not answer the question
A perpetual software license generally permits the customer to keep using the licensed version indefinitely, subject to the contract. It does not automatically mean that the vendor must provide technical support forever.
Support is usually a separate, time-limited entitlement. Depending on the agreement, it can include:
- technical assistance;
- bug fixes and security patches;
- software upgrades;
- access to support portals and downloads; and
- maintenance or compliance assistance.
The reverse can also be true: a vendor’s standard policy may change, but a negotiated enterprise agreement may contain a renewal option that gives the customer stronger rights than ordinary customers receive. That distinction was central to AT&T’s position.
In other words, the important question was not simply, “Did AT&T own perpetual VMware licenses?” It was, “Did AT&T’s contract separately require VMware to offer another support term for those licenses?”
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What contract language did AT&T rely on?
AT&T reportedly relied on an enterprise license agreement dating to 2007 and an August 2022 amendment. AT&T said the amendment gave it the option to extend support for up to two additional one-year periods at its sole option, provided it exercised that right before the existing term expired. CIO Dive reported on the agreement and amendment.
That alleged language cannot safely be generalized to every VMware customer. The outcome for another organization could turn on its:
- master agreement and enterprise license agreement;
- amendments and product schedules;
- order forms and reseller documents;
- definition of “Support Services”;
- renewal deadlines and pricing formula;
- end-of-sale or end-of-availability provisions;
- successor-product language; and
- governing-law and dispute-resolution clauses.
A renewal “option” is also different from language saying the vendor may renew support at its discretion. Customers should have counsel compare the signed documents with the vendor’s support policies rather than relying on the word “perpetual” in a quote or purchase record.
Broadcom’s response
Broadcom presented the dispute as a contract and product-availability issue, not as a decision to revoke AT&T’s software licenses.
Broadcom argued that VMware had transitioned away from perpetual products and standalone support as part of its subscription strategy. In its view, AT&T’s agreement did not give it the right to compel VMware to keep selling a support offering that had been discontinued. Broadcom also argued that AT&T had other commercial options and was attempting to require the company to maintain a withdrawn product line.
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Broadcom disputed AT&T’s characterization of the situation and said it believed it would prevail. Ars Technica summarized Broadcom’s response.
How Broadcom’s VMware strategy triggered the conflict
Broadcom completed its acquisition of VMware in November 2023. VMware then announced major changes to its commercial model. In December 2023, VMware announced that it was ending sales of perpetual licenses and moving toward subscription offerings while consolidating its product portfolio.
A company-wide product change does not automatically override an older negotiated contract. But it can create a difficult question when the agreement contains both renewal language and provisions concerning discontinued products, successor offerings or service availability. That tension—rather than license ownership alone—made AT&T’s case significant for other enterprise customers.
The support deadline
AT&T alleged that its existing support term was about to expire in early September 2024 and that Broadcom intended to terminate support shortly afterward. Public reports described the relevant cutoff as September 8 or September 9, depending on whether they referred to the contractual expiration date or the following termination date.
The difference is a reminder that enterprise disputes often turn on the exact dates and definitions in the signed documents. Customers facing a similar deadline should preserve notices, quotes, renewal correspondence and proof of any timely exercise of a renewal option.
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What happened to the lawsuit?
The safest current description is that the AT&T dispute was later described as having ended in a confidential settlement. A subsequent complaint by UnitedHealth Group stated that the New York court had indicated it intended to issue a preliminary injunction protecting AT&T’s access to support, after which the matter was confidentially settled. Read the later complaint.
The publicly cited material does not disclose the settlement’s price, duration, admissions or final contractual terms. It also does not establish that Broadcom breached every VMware customer’s contract, or that all perpetual-license customers have a right to renew support.
A preliminary injunction would have been temporary relief designed to preserve the status quo while the dispute proceeded. It would not, by itself, be a final merits judgment. Likewise, a settlement resolves the parties’ dispute without necessarily deciding the legal issue for everyone else.
Timeline
| Date | Event |
|---|---|
| 2007 | AT&T’s enterprise license relationship with VMware reportedly begins. |
| August 2022 | AT&T says an amendment created additional support-renewal rights. |
| November 2023 | Broadcom completes its acquisition of VMware. |
| December 2023 | VMware announces a move away from perpetual-license sales toward subscriptions. |
| August 29, 2024 | AT&T files suit in New York Supreme Court. |
| Early September 2024 | The disputed support term approaches expiration. |
| September 2024 | Broadcom responds with its end-of-availability argument. |
| Later | A subsequent litigant describes the matter as confidentially settled. |
What the dispute means for VMware customers
Customers holding perpetual VMware licenses should separate four questions:
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- Can we continue using the software? This concerns the perpetual license and its restrictions.
- Can we renew support? This depends on renewal clauses, dates and product-availability terms.
- What does support include? Technical help, patches, upgrades, downloads and security fixes may be governed by different provisions.
- What happens if support ends? The operational, regulatory and cyber-risk consequences may be more important than the license fee itself.
Contract-review checklist
- Identify whether each entitlement is perpetual, term-based, subscription-based or support-only.
- Find the exact renewal clause and determine whether renewal is an option or subject to vendor approval.
- Record notice and exercise deadlines.
- Check fixed-price, then-current-price and price-increase language.
- Look for end-of-sale, end-of-availability and successor-product provisions.
- Confirm which document controls if the master agreement conflicts with an order form, reseller quote or online policy.
- List what disappears if support lapses: patches, upgrades, assistance, downloads and portal access.
- Model migration costs, including workload discovery, application testing, hardware, backup, disaster recovery, retraining and licensing.
Renew, operate unsupported, negotiate or migrate?
Accepting a subscription bundle may preserve support and reduce immediate migration risk, but it can create recurring costs, broader product commitments and different licensing metrics.
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Operating under perpetual licenses without support may avoid a new subscription, but it can increase security, incident-response, compliance and staffing risks.
Litigation or arbitration may preserve negotiating leverage or the status quo, but it requires contract-specific evidence, time and legal expense.
Migrating to another platform can reduce long-term dependence on VMware, but migration may cost more and introduce more operational risk than the renewal dispute alone suggests. Potential alternatives include Nutanix AHV, Microsoft Azure Local, Red Hat OpenShift Virtualization and Proxmox VE. They are not interchangeable: workload compatibility, hardware, operating skills, regulatory requirements and support models must be assessed individually.
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A short-term bridge agreement can be useful, but customers should document whether it preserves existing claims, changes renewal rights or commits them to a broader subscription purchase.
Related disputes are context, not precedent for everyone
Later disputes involving other VMware customers, including UnitedHealth Group and T-Mobile, show that the conflict over perpetual software and support renewals continued. Their contracts and procedural histories are not automatically the same as AT&T’s.
A 2026 New York appellate decision in the T-Mobile matter is particularly relevant because it discussed a contract that expressly covered support for perpetual software and affirmed preliminary injunctive relief preserving the status quo. That decision may be useful context, but it does not convert AT&T’s confidential settlement into a universal rule. Read the T-Mobile decision.
Bottom line
AT&T’s lawsuit was a dispute over support-renewal rights for existing perpetual VMware licenses, not proof that Broadcom had cancelled those licenses. AT&T said its negotiated amendment let it renew support; Broadcom argued VMware had discontinued the relevant offering and could not be forced to sell it. The case was later described as confidentially settled, without a public merits ruling establishing that every VMware customer can renew perpetual-license support.
For other customers, the decisive evidence is in the signed agreement: renewal options, deadlines, support definitions, pricing rules, discontinuation clauses and successor-product language. Review those documents before allowing support to lapse, accepting a subscription bundle or beginning a migration.
