AT&T On Broadcom's VMware Price Hike: An Unacceptable 1,050% Increase

Luna Greco

4 min read

Post on May 31, 2025

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The 1050% VMware Price Hike: A Detailed Breakdown

Understanding the Acquisition:

Broadcom's acquisition of VMware closed in late 2022, a deal valued at over $61 billion. While the acquisition itself was initially met with mixed reactions, the subsequent price increases for VMware licensing have ignited a firestorm of controversy. The motivations behind such a dramatic price hike remain unclear, but several factors are likely at play:

• Increased Profitability: The acquisition aims to maximize returns for Broadcom shareholders, and significantly raising prices is a direct route to achieving this.
• Market Dominance: With VMware being a dominant player in the virtualization market, Broadcom may be leveraging its newly acquired position to exert greater control over pricing.
• Lack of Competition: The lack of strong, readily available alternatives to VMware in certain sectors may allow Broadcom to dictate prices with less fear of losing customers.

The timeline of the acquisition and the subsequent price increases raises questions about transparency and whether adequate notice was provided to existing clients. Further investigation may be warranted into potential antitrust concerns.

Dissecting the 1050% Figure:

The 1050% figure isn't simply a headline-grabbing statistic; it represents a dramatic increase across various VMware products and services. While precise figures haven't been publicly disclosed by Broadcom for all products, anecdotal evidence and reports from affected companies like AT&T paint a grim picture.

• Subscription-based licensing: Significant percentage increases on renewal of existing subscription contracts.
• Perpetual licenses: Sharp price hikes on updates and maintenance for perpetual licenses, making them increasingly costly.
• Specific Product Examples: Reports indicate that some VMware vSphere licenses have seen increases exceeding 1000%, while other products experienced proportionately high increases.

[Insert Chart/Graph here visually representing price increases for different VMware products]

Impact on AT&T and Other Businesses:

This VMware price hike has significant financial implications for AT&T and countless other businesses. The cost of maintaining existing VMware infrastructure has skyrocketed, forcing many companies to:

• Re-evaluate budgets: Significant budget reallocations are necessary to accommodate the inflated VMware costs.
• Cut other spending: Companies may be forced to cut back on other projects or initiatives to offset the VMware price increase.
• Delay projects: The increased cost may lead to postponements or cancellations of projects dependent on VMware technologies.

AT&T's Response and Public Outcry

AT&T's Official Statement:

AT&T has openly criticized Broadcom's actions, calling the price increase "unacceptable." In public statements and press releases, AT&T has expressed its concern over the potential negative impact on businesses and the industry as a whole. They have indicated they are exploring all available options to address this issue, potentially including legal action or renegotiation of contracts.

Industry Reaction and Public Sentiment:

The outrage extends far beyond AT&T. Industry experts and other businesses are expressing concerns about the potential for Broadcom's actions to set a dangerous precedent, potentially leading to price gouging in other technology sectors. Concerns regarding monopolistic practices and potential regulatory intervention are growing. Many articles and industry analyses have echoed AT&T’s concerns about the aggressive price hikes.

Potential Long-Term Implications and Alternatives

Future of VMware Pricing:

The future of VMware pricing under Broadcom's ownership remains uncertain. Further price increases cannot be ruled out, raising concerns about the long-term sustainability of using VMware solutions for many businesses. Regulatory pressure and potential competition could influence pricing decisions, but the current situation reflects a considerable shift in the market.

Exploring Alternative Solutions:

Faced with exorbitant VMware costs, many businesses are actively seeking alternative virtualization platforms and cloud services. Switching providers may involve significant upfront costs and potential disruptions but offers the possibility of long-term cost savings and greater control.

• Open-source virtualization: Platforms like Proxmox VE offer cost-effective alternatives to VMware.
• Cloud-based virtualization: Services like AWS, Azure, and Google Cloud provide flexible and scalable virtualization solutions.
• Other commercial virtualization platforms: Alternatives like Citrix and Nutanix offer potential alternatives, though each comes with its own pricing structure and capabilities.

Conclusion: Navigating the Post-Acquisition VMware Landscape

The 1050% VMware price hike represents a seismic shift in the enterprise software market. AT&T's strong opposition highlights the unacceptable nature of this increase and the potential for it to disrupt businesses across various sectors. The long-term implications remain uncertain, but businesses must carefully consider the potential for further increases and actively explore alternative solutions to protect themselves from such dramatic price fluctuations. Have you experienced similar price hikes from Broadcom's VMware? Share your story in the comments below! #VMwarePriceHike #Broadcom #ATT