Broadcom responds to AT&T’s VMware support lawsuit: AT&T has ‘other options’

Broadcom accuses AT&T of trying to “turn back the clock and force Broadcom to sell support services for perpetual software licenses that VMware has removed from its product line and that AT&T has no contractual right to purchase.” The statement comes from legal documents Broadcom filed in response. AT&T’s lawsuit against Broadcom Because VMware refuses to renew support for their perpetual licenses (PDF).

On August 29, AT&T filed a lawsuit (PDF) filed a lawsuit against Broadcom, claiming that Broadcom breached a contract by refusing to provide one-year renewal support for its perpetual licensed VMware software. Broadcom, VMware perpetual license expired It increased sales shortly after completing the purchase in favor of a subscription model that included two product bundles instead of many SKUs.

AT&T claims VMware contract (previously fake) Broadcom acquisition The company (which closed in November) has three one-year perpetual license support renewals and is currently working on a second one. AT&T says it uses VMware products to run 75,000 virtual machines (VMs) on about 8,600 servers. The VMs are to support customer service operations and operations management efficiencies, according to AT&T. AT&T is asking the New York State Supreme Court to order Broadcom to terminate VMware support services for AT&T and provide “further assistance” as deemed necessary.

Broadcom filed a motion to dismiss AT&T’s request on September 20. Its argument includes VMware’s previous position that it was moving toward a subscription model before the Broadcom acquisition. According to Broadcom, the transition from perpetual licenses to subscriptions was a years-long process, and so AT&T needed to prepare for it. Broadcom claims that AT&T admitted it was planning to move away from VMware software and that AT&T may have spent “the last few months or even years” doing so.

The filing alleges: “AT&T is resorting to sensationalism by accusing Broadcom of ‘bullying tactics’ and ‘price gouging.’ Such attacks are designed to mobilize the press and distract the Court from a much simpler story.”

According to Broadcom, the story goes like this:

… the agreement contains an express “End of Availability” provision that gives VMware the right to retire products and services at any time upon notice. Moreover, a year ago AT&T chose not to purchase the Support Services that it now asks the Court to require VMware to provide. AT&T did so despite knowing that Defendants were implementing a long-planned and well-known business model transition and would not be selling those Support Services in the near future.

Broadcom claimed it had been negotiating a new contract with AT&T “for months,” but the plaintiff “rejected every offer despite favorable pricing.”

Broadcom’s filing also questions AT&T’s request for mandatory injunctive relief, arguing that New York only grants such a request in “rare circumstances” and that the request does not apply here.

AT&T has options, says Broadcom

AT&T’s lawsuit alleges that losing VMware support would be extremely harmful to it and beyond. The lawsuit says AT&T’s 22,000 VMware virtual machines are used “to support services to millions of police officers, firefighters, paramedics, EMTs and incident response team members nationwide… in connection with public safety and/or national security issues.” It also claims that without VMware’s ongoing support, communications for the Office of the President are at risk.

But Broadcom argues that AT&T has other options, saying:

AT&T has other options, and therefore the most it can get is monetary damages. The fact that AT&T was given more than eight months’ notice and failed to take any action to avoid its alleged harm in the meantime (e.g., purchase a subscription to the new offerings or switch to another solution) makes sense and avoids a finding of irreparable harm. Even if AT&T believed it deserved better pricing, it could have avoided its alleged irreparable harm by entering into a subscription-based agreement and suing for monetary damages rather than injunctive relief.

AT&T has previously declined to answer Ars Technica’s questions about its backup plans to provide support for such essential customers in the event that VMware loses support.

Broadcom has made some customers uncomfortable

Broadcom completed its VMware acquisition in November and is rapidly dramatic changesIn addition to Broadcom’s reputation overhaul companies after purchasing them, actions such as terminating perpetual licenses, using VMware’s largest customers instead of buying them directly channel partnersAnd increase costs products and issuing higher CPU core requirements, customers and partners have reconsidered working with the company. Migrating from VMware can be extremely challenging and expensive due to its deep integration into some IT environments, but many are exploring the transition, and some are considering Broadcom Years of reactions.

As NAND Research founder and analyst Steve McDowell put it: TechnologyTarget About this case:

It’s very unusual for customers to sue their suppliers. I think Broadcom greatly underestimates how passionate its customer base is, (but) it’s a captive audience.

As this case shows, Broadcom’s VMware has created serious customer concerns about ongoing support, and companies like Spinnaker Support are trying to capitalize on this by offering third-party support services.

Martin Biggs, Spinnaker’s vice president and managing director of EMEA and strategic initiatives, told Ars Technica that they provide support to help their customers determine their next steps, whether that’s purchasing a VMware subscription or switching elsewhere:

VMware customers are looking for options; the vast majority we speak to don’t yet have a clear vision of where they want to go, but in all cases the option to stay with VMware for significantly increased fees is simply untenable. The challenge for many is that not paying fees means they won’t get support or security for their existing investments.

VMware’s support for AT&T was supposed to end on September 8, but the two companies entered into an agreement Support will continue until October 9. The hearing regarding the provisional injunction decision will be held on October 15.