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Short answer: CISPE’s European Cloud Competition Observatory (ECCO) rated Broadcom’s post-acquisition VMware licensing practices “Red/Critical” in February 2025. The warning reflects an industry body’s assessment and allegations from European cloud providers—not a final finding by the European Commission or a court.
The dispute centres on Broadcom ending new perpetual-license sales, discontinuing Support and Subscription renewals for perpetual offerings, consolidating products into larger bundles and shifting customers toward subscription or term licensing. Broadcom says the changes simplify VMware’s portfolio and bring it in line with mainstream enterprise software practice.
For customers, the practical issue is less dramatic than the headline but potentially more important: an existing perpetual VMware license may continue to run after support expires, yet the customer can lose access to technical support, patches and upgrade rights. Whether renewing or migrating is cheaper depends on the estate’s core count, bundle usage, security needs and migration costs.
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What happened in February 2025?
On February 11, 2025, ECCO published its first report on Broadcom’s VMware licensing practices and assigned the company a Red/Critical rating. ECCO said there had been little or no formal engagement from Broadcom and supported calls for a formal investigation.
ECCO was established by CISPE, the Cloud Infrastructure Services Providers in Europe association. Its participants include European cloud-provider representatives, while Cigref and Beltug participate as customer-organisation observers. ECCO monitors competition concerns affecting Europe’s cloud market, but its rating is an industry monitoring and advocacy assessment—not an enforcement order or legal judgment.
The warning followed Broadcom’s completion of its VMware acquisition in November 2023 and the subsequent restructuring of VMware’s commercial model. ECCO’s report argued that the changes could leave providers with limited practical alternatives when existing agreements expired.
CISPE’s announcement described the rating as an urgent competition concern. That language should not be confused with a conclusion that Broadcom has violated EU competition law.
What Broadcom changed in VMware licensing
Broadcom’s own announcement described a substantial portfolio and licensing overhaul:
| Earlier model | Post-acquisition direction |
|---|---|
| New perpetual VMware licenses were available | New sales shifted toward subscription and term licensing |
| Customers could renew Support and Subscription coverage for perpetual offerings | SnS renewals for perpetual products were discontinued, subject to applicable contracts and transition arrangements |
| Products could be purchased through a more fragmented catalogue | The portfolio was consolidated around major offerings such as VMware Cloud Foundation and VMware vSphere Foundation |
| Traditional licensing structures were common | Relevant offerings moved toward standardised per-core metrics |
Broadcom also offered transition and “trade-in” paths for customers holding perpetual products. The exact commercial effect varies by product, geography, reseller, negotiated discount, contract and deployment.
Broadcom presented the change as portfolio simplification. Simplification can reduce procurement complexity, but a bundle may also require a customer to pay for functionality it does not use. A smaller product catalogue is therefore not automatically cheaper.
Licensing terminology also changes by release. Broadcom says that from VCF and VVF 9.0, subscription-based license files are managed through VCF Operations and the VMware Cloud Foundation Business Services console rather than traditional 25-character keys. This is version-specific, not a rule for every VMware product or release. See Broadcom’s licensing documentation for the applicable version.
What CISPE and ECCO allege
CISPE and participating providers have raised several related concerns:
- customers may have to buy bundles containing capabilities they do not need;
- flexible or usage-sensitive arrangements may be replaced by predetermined subscription commitments;
- some existing agreements were allegedly terminated or not renewed with insufficient notice;
- customers were allegedly pressured into multi-year terms, including three-year commitments;
- cloud providers may have limited ability to negotiate or recover higher costs from their own customers;
- migration away from VMware may be technically possible but too expensive or risky to complete before renewal deadlines.
These points are CISPE/ECCO allegations and member reports, not independently adjudicated findings. ECCO reported that the “vast majority” of affected parties had accepted new terms tied to what it described as very high fees for a minimum of three years. That does not mean every VMware customer, product, country or contract has a universal three-year requirement.
The competition argument is strongest where switching costs are high. Cloud providers often use VMware as the virtualisation layer for many customers. Replacing it can require application testing, storage and networking changes, security revalidation, staff retraining, backup redesign and coordinated customer migrations. A provider may be able to switch eventually while still lacking a realistic short-term alternative.
Broadcom’s response
Broadcom says VMware’s former portfolio was unnecessarily complex and that subscription licensing is a normal model used by leading enterprise software companies. It has argued that the restructuring gives customers a more predictable investment model and faster access to innovation.
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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsBroadcom also says:
- the VMware Cloud Foundation subscription list price was reduced by half at the time of the announced restructuring;
- customers can continue using perpetual licenses they already purchased;
- support continues according to contractual commitments;
- customers can evaluate subscription-transition or trade-in options; and
- customer retention remained consistent.
Those statements describe Broadcom’s position and published commercial policy. They do not resolve whether individual customers received a commercially acceptable offer or whether the overall model harms competition.
In comments reported by Network World, Broadcom said it provides simplified licensing under a model offered by leading enterprise software companies.
What happens when Support and Subscription expires?
An important distinction is often missed in coverage of the dispute: support expiry does not necessarily make a perpetual VMware installation stop running.
Broadcom’s knowledge base says that, for a valid perpetual entitlement, hosts, vCenter Server and running virtual machines can continue operating after a Support and Subscription contract expires. The underlying perpetual entitlement is not automatically revoked merely because SnS ends.
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However, the customer may lose or restrict access to:
- technical support requests;
- new patches and security updates;
- major-version upgrades;
- help with lifecycle management; and
- some expansion, conversion or entitlement options.
Broadcom’s perpetual-license guidance should be read alongside the customer’s transaction documents and product terms. Broadcom has also discussed zero-day patch access for certain supported versions, but customers should not assume that this covers every product, version, entitlement or future update.
Who is most exposed?
Cloud service providers
Providers face both licensing and resale questions. They must determine whether their agreement permits the intended service, whether new costs can be passed through to customers, and whether the provider can migrate workloads without breaching service-level commitments.
A provider should model the cost of renewing VMware against the cost of operating a second platform or migrating customers. Diversification can reduce dependence but adds operational overhead.
Midsize VMware estates
Smaller deployments may be particularly exposed to bundles if they use only a narrow portion of the VMware stack. Conversely, a bundle may be reasonable where the organisation already relies on several included capabilities.
Large, highly integrated environments
Large enterprises may have more negotiating leverage, but they can also face greater switching costs. Deployments integrated with vSphere, NSX, vSAN, Aria, backup systems, disaster recovery, automation and monitoring require a broader migration assessment than a hypervisor-only comparison.
Regulatory and legal status
The status is best understood as a series of separate events:
- November 2023: Broadcom completed its acquisition of VMware.
- February 11, 2025: ECCO issued its first Broadcom report and assigned a Red/Critical rating.
- May 2025: ECCO retained the Red rating, said most CISPE members had signed new contracts under pressure and welcomed a competition complaint by German IT customer association VOICE.
- July 24, 2025: CISPE filed an appeal before the European General Court challenging the European Commission’s approval of Broadcom’s VMware acquisition.
CISPE’s court action argues that the Commission did not adequately assess competition risks or impose sufficient remedies relating to server virtualisation software. It is an appeal, not a final annulment of the acquisition.
For now, readers should distinguish among ECCO’s monitoring reports, CISPE’s advocacy, VOICE’s complaint, CISPE’s court appeal, any formal European Commission investigation and any eventual court judgment. They are not interchangeable. Broadcom’s current licensing terms remain available through its official licensing repository.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Renew, negotiate or migrate?
There is no universal recommendation. Use a decision model that compares commercial certainty with operational risk.
- Confirm the contract position. Record perpetual entitlements, SnS expiry dates, subscription renewal dates, termination provisions and product-specific terms.
- Measure actual usage. Map the VMware features in use and identify which VCF or VVF bundle components would be valuable or redundant.
- Calculate the licensing base. Model physical cores, hosts, clusters, expansion plans, true-up rules, discounts and the effect of multi-year commitments.
- Price the support gap. If remaining on perpetual licenses, quantify the value of patches, support and upgrade rights, especially for regulated or security-sensitive workloads.
- Map migration dependencies. Include operating systems, applications, storage, networks, security, identity, backup, disaster recovery, monitoring, automation and customer contracts.
- Negotiate more than headline price. Ask about renewal caps, minimum commitments, portability, termination rights, true-ups, support coverage and transition assistance.
- Test before committing. Run a representative proof of concept, including performance, resilience, backup recovery and rollback.
- Plan coexistence. A staged migration or second platform may reduce risk, but budget for duplicated skills, tooling and support during the overlap.
For cloud providers, add a customer-level review: can VMware costs be recovered, do contracts allow price changes or platform migration, and can smaller customers be moved without unacceptable disruption?
Alternatives to evaluate
| Platform | Potential fit | Main trade-off |
|---|---|---|
| Proxmox VE | Cost-sensitive organisations and Linux-skilled teams | Not one-to-one feature parity; migration and enterprise integration require assessment |
| Nutanix AHV | Enterprises considering an integrated compute, storage and virtualisation platform | Often involves a broader Nutanix infrastructure decision, not just a hypervisor swap |
| Red Hat OpenShift Virtualization | Organisations already using or adopting OpenShift | Kubernetes-centric operations may be excessive for a VM-only estate |
| Microsoft Azure Local | Microsoft- and Azure-centric hybrid environments | Requires checking hardware, geography, Azure dependencies and licensing obligations |
| OpenStack or Apache CloudStack | Engineering-led providers seeking control and customisation | Higher design, operations, integration and support burden |
Official pricing pages are useful starting points, but no headline price proves lower total cost. Include migration labour, retraining, new hardware, support, tooling, dual running, downtime risk and customer communications.
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CISPE’s red alert is a serious market warning, not a legal verdict. Broadcom’s VMware licensing changes are real: new perpetual sales ended, SnS renewal paths changed, the portfolio was consolidated and subscription or term licensing became central. Broadcom says this is simplification; CISPE says customers and cloud providers have been pressured into costly commitments.
Customers should not assume that an expired support contract instantly disables a perpetual VMware environment. They should also not mistake continued operation for continued access to patches, support or upgrades. The sensible next step is a contract-specific total-cost review, followed by a tested decision to renew, negotiate, diversify or migrate.
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