Broadcom Issues Cease-and-Desist to Unsupported VMware Users
Background: VMware Perpetual Licenses and Broadcom’s Strategy
Since Broadcom’s $61 billion acquisition of VMware in November 2023, the chipmaker has radically shifted VMware’s licensing and support model. Perpetual licenses, once sold with optional renewal support, were discontinued. Customers who purchased perpetual licenses prior to the acquisition still own the software indefinitely, but only those with pre-existing support contracts can continue to renew maintenance. Broadcom has raised subscription bundle prices by 300 percent or more, driving many organizations to reassess their virtualization strategy.
Cease-and-Desist Letters: Scope and Legal Assertions
In recent weeks, multiple VMware perpetual license holders whose support contracts expired have reported receiving formal cease-and-desist letters from Broadcom. The letters—signed by Broadcom Managing Director Michael Brown—assert that any use of maintenance releases, patches, enhancements, bug fixes or security updates beyond the contract’s expiration date infringes VMware’s intellectual property rights and constitutes a material breach of the original agreement.
- Prohibition on installing bug fixes or security patches (excluding zero-day emergency fixes)
- Immediate removal of any maintenance or minor/major releases issued post-expiration
- Potential claims for enhanced damages and attorneys’ fees
Broadcom’s letter also warns that non-compliance may trigger full-scale software audits under the original VMware Customer End User License Agreement (EULA).
Broadcom’s Audit Threats and Enforcement Mechanisms
Per the notice, Broadcom retains the right to audit any customer’s on-premises environment, requiring a self-report of deployed VMware components and version numbers—vSphere ESXi, vCenter Server, NSX, Horizon, and more. Industry observers note that without cryptographic checksums or tamper-proof logs, these self-reports could be manipulated, though customers risk penalties if discrepancies are discovered.
Dean Colpitts, CTO at Members IT Group (an MSP in Canada), told Ars Technica: “Broadcom’s auditing clause is toothless without verification controls. In practice, we fear accidental patching or automated update tools might expose customers to false breach claims.”
Technical Repercussions for Enterprise Environments
Enterprises running unsupported VMware versions face multiple technical risks:
- Security Vulnerabilities: Without access to CVE patches (for VMware ESXi up to version 8.0u3 or vCenter 7.0u2), systems remain exposed to known exploits such as CVE-2024-20815 (remote code execution in vCenter).
- Operational Stability: Compatibility issues arise when underlying hardware firmware (e.g., Intel® UEFI updates, AMD SEV-ES patches) interacts with outdated hypervisor builds.
- Compliance Challenges: Auditors for PCI-DSS, HIPAA or GDPR may flag unpatched hypervisors, leading to fines or remediation mandates.
Customer Responses and Industry Alternatives
Facing steep subscription costs, many organizations are exploring:
- Open-source hypervisors like KVM (with oVirt or Red Hat Virtualization) and Xen, offering zero licensing fees but requiring deeper Linux and networking expertise.
- Proxmox VE, an integrated Debian-based virtualization platform with built-in ZFS support and Ceph storage integration, often adopted for SMB workloads.
- Public cloud migrations to AWS, Azure or Google Cloud Platform, leveraging managed services (EC2, Azure Stack HCI) and pay-as-you-go models.
One Spiceworks community member reported migrating a 50-node VMware cluster to Proxmox over a 6-month POC, reducing licensing costs by 85 percent while maintaining feature parity for live migration and high-availability failover.
Market Impact and Expert Analysis
According to Gartner, global virtualization software spending could decline by 12 percent year-over-year in 2025, driven by cost-conscious SMBs and aggressive cloud adoption. Forrester analysts warn that the steep 300–500 percent price hikes erode trust, prompting channel partners to diversify their offerings. “Broadcom’s approach may boost short-term revenue but risks long-term churn,” says Forrester senior analyst Dakota Moore.
Future Outlook: Licensing Models and Compliance Automation
Looking ahead, organizations are investing in Software Asset Management (SAM) tools—Flexera, Snow Software or ServiceNow SAM—to automate license usage reporting and avoid inadvertent compliance breaches. Meanwhile, DevOps teams are evaluating immutable infrastructure patterns and GitOps pipelines to standardize infrastructure as code (IaC), ensuring any unauthorized patch or update triggers immediate alerts.
Broadcom’s continued enforcement actions, including its recent legal battle with AT&T and piracy claims against Siemens, indicate a broader industry shift toward stricter license governance. As software monetization models pivot from perpetual to subscription or consumption-based billing, enterprises must adapt their infrastructure strategies and financial planning to mitigate both technical and contractual risks.