AT&T sues Broadcom for breaching VMware support extension contract
The telecoms giant has slammed Broadcom for trying to bully it into buying software it doesn't want or need, at huge prices.
Published on 5th September 2024
US telecoms giant AT&T has alleged Broadcom has reneged on an extended support deal it struck with VMware, and warned the consequences could be massive outages for customer support operations – and even the US president’s office.
A complaint filed last week in the Supreme Court of New York State explains that AT&T holds perpetual licenses for VMware software and paid for support services under a contract that ends on September 8. The complaint also alleges that AT&T has an option to extend that support deal for two years – provided it activates the option before the end of the current deal.
AT&T’s filing claims it exercised that option, but that Broadcom “is refusing to honor” the contract.
Broadcom has apparently told AT&T it will continue to provide support if the comms giant “agrees to purchase scores of subscription services and software.”
AT&T counters that it “does not want or need” those subscriptions, because they:
- Would impose significant additional contractual and technological obligations on AT&T;
- Would require AT&T to invest potentially millions to develop its network to accommodate the new software;
- May violate certain rights of first refusal that AT&T has granted to third parties;
- Would cost AT&T tens of millions more than the price of the support services alone.
The references to “new software” almost certainly allude to VMware Cloud Foundation – Broadcom’s integrated bundle of VMware’s compute, storage, and network virtualization products, plus associated management tools. Broadcom has stopped selling individual VMware products and now sells only bundles that include several software products and support.
Legal filings are often dense and dull, but AT&T’s lawyers have flouted that style convention. They accuse Broadcom of making an “attempt to bully AT&T into paying a king’s ransom for subscriptions AT&T does not want or need” and write that this lawsuit represents the telecoms mega-corp “refusing to be extorted.”
The complaint also suggests Broadcom’s refusal to extend support creates enormous risk for US national security – some of the ~8,600 servers that host AT&T’s ~75,000 VMs “are dedicated to various national security and public safety agencies within the federal government as well as the Office of the President.” Other VMs are relied upon by emergency responders, and still more “deliver services to millions of AT&T customers worldwide” according to the suit.
Without support from Broadcom, AT&T claims it fears “widespread network outages that could cripple the operations of millions of AT&T customers worldwide” because it may not be able to fix VMware’s software.
An AT&T spokesperson said “We have filed this complaint to preserve continuity in the services we provide and protect the interests of our customers.”
A VMware spokesperson replied:
Broadcom strongly disagrees with the allegations and is confident we will prevail in the legal process. VMware has been moving to a subscription model, the standard for the software industry, for several years – beginning before the acquisition by Broadcom. Our focus will continue to be providing our customers choice and flexibility while helping them address their most complex technology challenges.
