Broadcom continues to pressure VMware customers into accepting massive price hikes and restrictive licensing terms, according to the European Cloud Competition Observatory (ECCO) in its latest report.

Figure 1. Broadcom Refuses to Roll Back Massive VMware Price Increases, Says European Watchdog.

ECCO’s third report, following an equally critical assessment in May, indicates that the situation with VMware has worsened throughout 2025. The US vendor appears determined to enforce severe changes that ECCO views as an abuse of market power. Figure 1 shows Broadcom Refuses to Roll Back Massive VMware Price Increases, Says European Watchdog.

In its previous report appendix, ECCO noted that members of the Cloud Infrastructure Services Providers in Europe (CISPE)—the organization behind ECCO—had reported price increases ranging from 800% to 1,500%, with tenfold jumps being common. The latest assessment suggests that Broadcom’s campaign to make providers’ operations more costly and complicated has continued unabated.

The core issue remains: switching to a competing vendor is both time-consuming and expensive, leaving many cloud service providers with little practical alternative.

“For some workloads, there are no alternatives because they are only certified to run on VMware,” ECCO said. “Even if it is possible to move workloads, the process can take months or years, during which partners are forced to pay both Broadcom’s inflated license fees and those of their new provider.”

As a result, ECCO warned that migration could be “lengthy, expensive, and potentially ruinous,” adding that “in the current circumstances there is no option but to denote Broadcom’s status as Red – Critical.”

These migration hurdles come on top of alleged legal intimidation, including cease-and-desist letters sent earlier this year to customers holding perpetual licenses who had not transitioned to subscriptions.

Demonstrating its commitment to challenging Broadcom’s approach, ECCO filed an action in July with the General Court of the European Union. The action contests the European Commission’s (EC) decision that month to approve Broadcom’s VMware acquisition—despite conditions that made no reference to complaints about Broadcom’s conduct. This legal move reflects ECCO and CISPE’s dual strategy: challenging both Broadcom and VMware while criticizing the EC for insufficient oversight.

Many of these complaints originate from CISPE, acting on behalf of its European cloud service provider members. In 2024, CISPE established ECCO to monitor the behavior of major software vendors in the cloud market, building on concessions it had negotiated with Microsoft.

ECCO’s first report targeted Microsoft’s cloud business, ultimately prompting policy changes on pay-as-you-go pricing, sovereign cloud deployments, and hosting privacy.

On the ECCO scorecard, Microsoft’s status remains “green,” reflecting progress under the agreement reached with the company. However, the report notes that this deal does not address issues such as the bundling of AI capabilities or the continued tight integration of Entra ID, Azure Active Directory, and Microsoft 365.

Offsetting this relative success, ECCO warns that Broadcom’s tactics are now being copied by other vendors. “One of the more insidious impacts of Broadcom’s bad behavior is to encourage other vendors to try to impose less favorable licensing terms on their customers and partners,” the report states.

SAP and Citrix were singled out for criticism. SAP is currently under investigation by the European Commission for anti-competitive practices. ECCO cites complaints from European customers who feel pressured to migrate on-premises workloads to SAP Cloud ERP “without any clear benefits for their organization.” CISPE members also objected to the full-stack nature of the new platform, which restricts certified SAP workloads to large hyperscalers such as Microsoft, AWS, and Google—effectively excluding independent providers.

Citrix, meanwhile, drew criticism for allegedly adopting a Broadcom-style subscription licensing model, which ECCO says could result in “significant hikes in cost.”

AJ Thompson, chief commercial officer of consultancy Northdoor, emphasized the broader implications for Europe. “These practices don’t just inflate costs; they risk stifling innovation and compromise Europe’s broader digital sovereignty ambitions,” he said. “Fair, transparent, and flexible software licensing is fundamental to fostering a competitive cloud ecosystem that empowers local providers and protects customers.”

Thompson urged regulators to act quickly, warning that aggressive licensing practices could otherwise erode competition and limit customer choice.

Source: NETWORK WORLD

Cite this article:

Priyadharshini S (2025), European Cloud Watchdog Says Broadcom Won’t Reverse Steep VMware Price Hikes, AnaTechMaz, pp.174