Not Just Price Hikes: The New Compliance Rules Affect Functionality and Operational Continuity

Not Just Price Hikes: The New Compliance Rules Affect Functionality and Operational Continuity

With the elimination of perpetual licenses and the introduction of increasingly strict controls, Broadcom is redefining VMware’s operational framework: through forced audits, mandatory reporting, and blocked features, compliance becomes a technical, ongoing, and sanctionable issue.

Before diving into the latest developments, let’s briefly recap for those who may have missed earlier updates.

Since Broadcom completed its acquisition of VMware, the landscape for customers and partners has changed radically. The new management’s first actions marked a clear break from the past: the removal of perpetual licenses, the shift to a subscription-only model with a three-year minimum term, the discontinuation of monthly pay-as-you-go options for service providers, and the streamlining of offerings into a few bundles. We’ve covered this in the past.

According to the European Cloud Competition Observatory (ECCO), the new licensing model introduced by Broadcom after acquiring VMware has led to sharp price hikes for European customers, with increases reaching up to 1500% in some cases. The financial pressure is particularly high for cloud providers, prompting ECCO and CISPE to publicly denounce the situation.

In their latest report, Broadcom’s policies are described as “restrictive and punitive”: the contracts are binding, non-negotiable, and enforce a minimum three-year term, also forcing partners to choose between being resellers or service providers—disregarding the hybrid reality of many businesses.

ECCO also notes that many customers were pressured into accepting the new terms after the abrupt termination of long-standing agreements. A formal appeal has been made to the European Commission, calling for more transparency, contract flexibility, and a fairer distribution of transition costs.

Tighter Control Mechanisms

Alongside the commercial reorganization, Broadcom has tightened its control mechanisms, aiming to centralize compliance enforcement. Formal notices have already been sent to customers with expired perpetual licenses, requiring them to immediately stop any updates applied after support expiration.

Reports from Reddit and other forums reference detailed and stern communications threatening legal consequences if updates are not removed—even if they are manually applied security patches.

Another sign of escalation came from the U.S., where Broadcom filed a lawsuit against Siemens, accusing it of unauthorized use of VMware software. This is a symbolic and strategic step: Broadcom’s stance is moving beyond warnings and audits, potentially leading to actual legal action.

However, the real paradigm shift is technical: compliance is now built into the software itself. It's no longer just about external audits or retrospective checks. Broadcom is embedding contractual compliance into the core of VMware products, with native tracking systems, mandatory reporting, and even feature blocks in case of non-compliance.

Compliance Is in the Code

One major step in this direction is the introduction of download tokens. Now, every VMware customer must authenticate with a personalized token to access product binaries. Each download operation is uniquely tracked, identifying the customer and logging the exact content downloaded. This marks the shift from an open, trust-based model to a tightly controlled distribution system.

It confirms that compliance is no longer just a contractual clause: it is now embedded in the code, in the technical mechanisms of the products, and in access procedures.

Another significant example comes from the new Specific Program Documentation (SPD) for VMware Cloud Foundation, which introduces even stricter rules. In addition to higher thresholds for access (in terms of cores, sockets, and hardware resources) and stricter financial conditions, the key novelty is the Mandatory Compliance Reporting system.

Every VCF installation must now generate and submit a Compliance Report to Broadcom every 180 days, documenting the actual license usage. This can be done automatically via the software or manually, as specified in the official documentation.

If not submitted, the software enforces progressive penalties:

• after 180 days, warnings appear in the management interface,
• after 270 days, some platform features are blocked or restricted.

This effectively creates a model of automated technical compliance, where the software itself monitors license conditions. In case of prolonged non-compliance—such as failure to submit the compliance report—the system does not just issue alerts: it imposes operational consequences, potentially disabling key features of the management platform even in production environments.

This means IT teams risk unplanned service disruptions, even due to a simple oversight or a formal reporting error. The logic shifts control from contract negotiation to software behavior, with direct impacts on business continuity and ever-narrower margins of action for IT departments.

Conclusion: The Moment of Decision

For many long-standing VMware customers, the moment of decision has arrived. Remain in an increasingly rigid and costly model, or explore alternative paths—more flexible, sustainable, and independent—to protect infrastructure and operational continuity?

At WEGG, we support companies across all sectors as expert consultants in licensing and IT strategies. We can assist in analyzing the new landscape, evaluating alternative options together, and helping you build a credible Plan B to manage costs and future-proof your business. Sometimes, simply knowing there’s a way out makes all the difference.

After all, compliance is no longer just a contractual issue: it’s now pervasive, embedded in code and technical systems. And in the event of non-compliance, the risk isn’t just financial penalties—but actual operational shutdowns.