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Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →AT&T alleged in 2024 court filings that a proposed VMware renewal from Broadcom would have increased its annual VMware-related cost by 1,050%. That means roughly 11.5 times the previous annual cost—not 1,050 times more. The figure was AT&T’s allegation about a proposed quote, not proof of a companywide price increase for every VMware customer.
The dispute centered on whether AT&T could continue renewing support for existing perpetual VMware licenses through September 2026 after Broadcom ended sales of perpetual licenses and support renewals for those products.
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What the 1,050% figure means
A 1,050% increase is calculated from the original price:
| Measure | Example |
|---|---|
| Previous annual cost | 100 units |
| Increase | 1,050 units |
| Proposed annual cost | 1,150 units |
In other words, the proposed price would have been approximately 11.5 times AT&T’s previous annual cost. It would be incorrect to say Broadcom charged AT&T 1,050 times more.
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The public material cited in reports redacted the underlying dollar amounts, so AT&T’s exact before-and-after annual prices cannot be reliably stated. The allegation also cannot establish a standard VMware price for other customers, whose quotes depend on products, cores, contract terms, minimum commitments and negotiated discounts.
Reports by The Register and Ars Technica described the figure as coming from AT&T’s evidence in the dispute.
Why AT&T sued Broadcom
Broadcom acquired VMware in November 2023. AT&T said it had previously bought perpetual VMware licenses and paid separately for support. According to AT&T’s complaint, an amended 2022 agreement gave it an additional support-renewal period that AT&T interpreted as extending coverage through September 2026.
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A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11AT&T alleged that Broadcom would not honor that arrangement unless AT&T purchased subscription products and services it did not need or want. The company sued Broadcom in New York on August 29, 2024, alleging breach of contract, breach of the implied covenant of good faith and related claims, and seeking injunctive relief. The complaint is publicly available.
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AT&T’s argument was not simply that a new VMware product had become expensive. Its central claim was that it had a contractual right to renew support for software it had already purchased, and that Broadcom’s proposed commercial terms improperly undermined that right.
What AT&T said about its environment and migration costs
In an August 19, 2024 email to Broadcom CEO Hock Tan, AT&T executive Susan Johnson reportedly described the proposed increase as “extreme.” AT&T also said its VMware environment supported approximately 75,000 virtual machines across about 8,600 servers.
That scale helps explain why the dispute had operational and financial significance. AT&T estimated that migrating away from VMware would cost approximately $40 million to $50 million. That is an estimate specific to AT&T’s environment, not a general benchmark for VMware migrations.
A migration comparison also has to account for application testing, storage and networking changes, backup and disaster-recovery redesign, staff training, possible downtime, hardware requirements and compliance work. A higher renewal quote does not automatically mean that migration is the cheaper option.
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Broadcom’s response
Broadcom disputed AT&T’s legal and commercial framing. Its position, as described in its court filings, was that AT&T was asking the court to force Broadcom to continue selling a support service VMware had discontinued.
Broadcom argued that AT&T had no contractual right to require renewal of the discontinued offering. It also characterized AT&T’s complaint as sensationalized and said it had offered a five-year subscription at a price Broadcom considered below market and comparable with, or better than, offers to similarly situated customers. Broadcom further alleged that AT&T had indicated it would rather migrate than accept the new arrangement.
Those arguments appear in the court filing reported by Ars Technica. The 1,050% figure came from AT&T’s evidence; Broadcom disputed the underlying legal and commercial interpretation.
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Broadcom publicly announced a broader change rather than an isolated AT&T pricing action. Its stated policy included:
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- Ending sales of new perpetual VMware licenses.
- Ending Support and Subscription, or SnS, renewals for perpetual offerings.
- Moving customers toward subscription products and bundles.
- Consolidating the main offers around VMware Cloud Foundation and VMware vSphere Foundation.
- Offering trade-in or upgrade paths from perpetual products to subscriptions, including a bring-your-own-subscription option for certain VMware Cloud Foundation deployments.
Broadcom described the transition as a simplification of the product portfolio and a move toward predictable recurring investment. Customers such as AT&T viewed the practical effect as pressure to buy bundled capabilities beyond their existing requirements. Broadcom’s licensing announcement and VMware’s end-of-availability explanation outline the policy change.
What happens when support for a perpetual license expires?
Expiration of support does not necessarily revoke the underlying perpetual license or make the software stop working immediately. It separates several issues that are often incorrectly treated as one:
- License entitlement: the right to use the perpetual software may remain.
- Technical support: normal support requests may end when SnS expires.
- Updates and patches: access may be restricted, creating security and compliance concerns.
- Upgrades and expansion: major upgrades or adding hosts may be limited.
Broadcom’s knowledge-base guidance explains the distinction. An environment can therefore continue running while becoming harder to secure, upgrade, certify and troubleshoot.
What VMware customers should evaluate
1. Audit the contract
Review the exact renewal language, support definitions, end-of-availability provisions, notice requirements and any clauses addressing discontinued services. Do not assume that a historical renewal practice guarantees future renewal rights.
2. Separate the old and new offers
Compare the historic support cost with the proposed subscription on a like-for-like basis. Identify which products, management tools, networking features, security capabilities and cloud services are included. A bundle may provide useful capabilities—or create expensive shelfware.
3. Model four paths
- Renew or negotiate: usually minimizes immediate disruption and preserves existing processes, integrations and skills, but may create larger recurring commitments.
- Continue on perpetual licenses without support: may provide a short bridge, but leaves the organization exposed to missing patches, limited upgrades and weak vendor escalation.
- Use third-party support: may reduce near-term cost, but customers must verify patch access, escalation, compliance evidence and hardware support.
- Migrate: can reduce dependence on the changed licensing model, but requires funding, testing, retraining and a credible rollback plan.
4. Start before the deadline
Migration planning should begin while the existing environment is still supported. Inventory virtual machines, applications, storage, network dependencies, backup policies, disaster-recovery procedures and VMware-specific features. Prioritize application certification and recovery testing rather than treating hypervisor conversion as a simple file-format exercise.
Potential replacement categories
No alternative is automatically cheaper. The appropriate choice depends on the existing estate, skills, hardware, operating model and compliance requirements.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errors- Microsoft Hyper-V: potentially relevant for organizations already standardized on Windows Server and Microsoft agreements. See Microsoft’s Hyper-V overview.
- Nutanix AHV: suited to organizations seeking an integrated enterprise virtualization and hyperconverged infrastructure platform. See Nutanix’s AHV page.
- Red Hat OpenShift Virtualization: relevant where OpenShift and Kubernetes are already strategic platforms. See Red Hat’s product page.
- Proxmox VE or other KVM-based platforms: potentially attractive for cost-conscious teams comfortable with Linux and open infrastructure. Proxmox publishes support information at its pricing page.
- Public or hosted private cloud: may suit organizations that value outsourced operations over retaining an on-premises hypervisor, but consumption and egress costs must be modeled carefully.
Legal-status note
The 1,050% figure relates to AT&T’s 2024 court filings and a proposed renewal quote. The material summarized here does not establish the final disposition of the litigation as of the article’s reference date. It should not be presented as proof that AT&T or Broadcom ultimately prevailed.
For customers, the lasting lesson is narrower and more useful: distinguish a disputed customer-specific quote from an industrywide price increase, then compare renewal, unsupported operation, third-party support and migration using the full contractual, technical, security and total-cost picture.
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