Dutch court forces Broadcom to support VMware migration after 85% price hike backlash
Dutch court forces Broadcom to support VMware migration after 85% price hike backlash
The Dutch Ministry of Infrastructure and Water Management has won a legal victory in the latest pushback against Broadcom’s controversial VMware licensing changes.
Published on 7th July 2025
VMware and parent company Broadcom must continue to provide support to the Dutch Ministry of Infrastructure and Water Management (Rijkswaterstaat) while the agency migrates away from VMware products over the next two years, a Dutch court has ordered.
Rijkswaterstaat (RWS) faced an 85% cost increase under Broadcom’s new subscription licensing model, with annual expenses jumping from €2.1 million ($2.4 million) to nearly €4 million ($4.6 million) — a cost increase the agency deemed unsustainable.
The agency has been a long-term VMware customer, having invested millions in perpetual licenses over many years for products including vSphere, NSX, vSAN, vCenter Server, Aria Automation/Operations, and Site Recovery Manager to manage critical Dutch infrastructure including tunnels, locks, and bridges.
With its three-year support agreement set to expire in July 2024, the agency requested renewal through its reseller in spring 2024. However, the reseller indicated it could not provide a suitable offer under Broadcom’s new subscription model. Broadcom offered extensions through September and November 2024, then finally through July 23, 2025 — but refused any exit support beyond that date or to provide source code for independent maintenance.
The preliminary relief judge at the District Court of The Hague ruled that “Broadcom acts in breach of its duty of care” by failing to provide adequate exit support for systems managing vital national infrastructure.
A penalty of up to $29 million
Under the court order, VMware and Broadcom must provide exit support for up to two years, including maintenance updates, bug fixes, and technical support. Failure to comply will result in penalties of €250,000 ($290,000) per day, up to €25 million ($29 million).
The ruling represents escalating legal pushback against Broadcom’s aggressive licensing strategy since completing its $69 billion VMware acquisition in late 2023. Telecom giant AT&T has filed similar litigation over support contract changes, while EU antitrust regulators investigate Broadcom’s practices following complaints from European business groups.
“The Dutch verdict represents a formal rebuke of how enterprise software monetisation has decoupled from operational continuity,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. “Vendors that revoke support for perpetual licenses without reasonable transition mechanisms risk creating a contractual choke point.”
Broadcom’s transformation of VMware eliminated perpetual licensing sales and forced users into bundled subscription packages at dramatically higher costs. Customers have reported VMware license cost increases of up to 500%. Starting in 2025, Broadcom requires customers to license a minimum 72 cores per order regardless of actual needs, compounding pricing pressure on smaller deployments.
Legal experts suggest the Dutch ruling could embolden similar litigation elsewhere, particularly in Europe where business protection laws are stronger than in the United States. The court’s “duty of care” framework could apply to other essential services providers using VMware for medical systems, power grids, or transportation networks.
The timing of the Dutch court ruling is significant as many large VMware customers face contract renewals throughout 2025, potentially armed with the Dutch precedent to demand continued support during migrations.
“This ruling validates the rising concern among CIOs that vendor strategy can no longer operate in a vacuum,” Gogia said. “Whether in the form of legal injunctions, class action suits, or regulatory probes, buyer-led resistance to coercive licensing tactics is becoming structured, public, and repeatable.”
Fast-tracking migrations
Forrester Research analysts estimated that, following the Broadcom acquisition, up to 20% of VMware’s enterprise customers would quickly switch vendors, citing “exhaustion” with price hikes and forced bundling.
The broader implications extend beyond individual disputes. Gogia argued that the Dutch ruling is “reshaping the boundaries of acceptable vendor conduct” as governments and large enterprises become more vocal about license continuity.
“For customers in regulated or public service environments, the stakes extend far beyond financial impact: they touch on risk, compliance, and service reliability,” he said.
The upheaval has accelerated adoption of VMware alternatives including Nutanix, Microsoft’s Hyper-V, Red Hat’s OpenShift Virtualisation, and emerging players like Proxmox. Many organisations are fast-tracking cloud migrations to reduce virtualisation dependencies.
European cloud providers report Broadcom’s partner program requires minimum commitments of 3,500 cores, costing around $800,000 annually with three-year terms — pricing many smaller providers out of VMware partnerships entirely.
For Broadcom, the €25 million ($29 million) maximum penalty in the Dutch case represents minimal financial impact given its target of $8.5 billion in annual VMware earnings, but the precedent of the court forcing it to provide migration support could complicate hard-ball tactics with other customers.
Gogia sees vendors facing “a binary choice: retrofit their models to respect legacy contractual expectations, or risk building their future revenue on top of contested trust.”
