Broadcom is responding to the pressure from customers, partners and the European Commission by allowing customers more time to transition to new contracts. This is encouraging but falls short of what CISPE members and enterprise customers need.
Broadcom remains focused on a billing model that is a retrograde step which cuts against the cloud-first strategies of modern businesses. Cloud customers are used to pay as you go models based on actual consumption. By contrast, Broadcom is seeking to enforce up-front billing based on the number of processor cores available. Moreover, it requires payment in advance for a fixed three-year term. These fees are not only completely divorced from the reality of actual usage of VMware software but undermine the flexibility and scalability expected of cloud-based business models and the viability of businesses developing them.
Broadcom must do more to solve these ongoing issues with customers and partners alike. Specifically, it must end its ‘anti-cloud’ attempts to enforce payments in advance based on three-year commitment to a fixed number of processor cores.