Broadcom has upped VMware licensing costs by between eight to 15 times since it took over the organisation, and a lack of alternatives in the tech industry means trade and end customers have no choice but to play ball.

This is the according to the European Cloud Competition Observatory (ECCO), an independent body formed by customer organisations, and CISPE – a trade association of 37 cloud providers in the region – to monitor the behaviour of software vendors accused of abusing their monopoly position.

The latest report issued today by ECCO on Broadcom-owned VMware says most CISPE members were forced to renew licensing agreements.

“However, these agreements were often signed under significant pressure, influenced by a lack alternatives, abrupt contract terminations, and financial incentives such as rebates for longer-term commitments,” it claims.

Despite putting pen to paper, “these customers continue to face substantial financial burdens and operational disadvantages due to the imposed terms” of the Broadcom’s revamped licensing framework for VMware.

The chips ‘n’ software giant killed the perpetual licenses and monthly “pay-as-you-go” pricing models on VMware products, and rationalised the portfolio into a few large bundles that are only available on subscription with a three-year minimum commitment.

ECCO likens this to an electricity provider deciding to charge you based on the assumption you run your heating full-blast 24×7 rather than on actual usage, and insisting you pay up front a year or more in advance.

Broadcom, ECCO says, “unilaterally and without sufficient notice” terminated existing licensing agreements, some of which had been in place for over 10 years, in order to compel customers holding them to accept the new terms.

As reported last year, it also ditched VMware’s channel program for Cloud Services Providers (CSPs) and only invited the largest such operators to join its own Broadcom partner program.

This latest report highlights that recent actions by Broadcom have, in ECCO’s words, “worsened the situation for European cloud infrastructure providers, their customers, both private and public sector, which depend on VMware virtualisation software.”

It says the firm has made additional changes to its partnership program, forcing partners to choose between being a service provider or a reseller, ignoring that many fill both roles for their customers. ECCO called it “a further harmful restriction on European cloud service providers’ ability to compete and serve European customers.”

On pricing, ECCO points to the claims from AT&T in October last year that its VMware support services bill was set to rise roughly 1,050 percent – although the telco and Broadcom entered into talks to settle the dispute.

“CISPE members reported price hikes to the Commission ranging from 800 percent to 1,500 percent,” says the ECCO report. “Prices have often increased tenfold.”

It goes on to say that when customers agree to three-year fixed contracts, Broadcom entertains discounts of 30 to 50 percent on the price hike.

Also noted are the cease-and-desist letters that Broadcom sent to some perpetual license holders, ordering them to roll back patches installed after the end of their support agreements, and a copyright and licensing lawsuit filed against Siemens in the US, which it says indicate the “highly litigious approach” Broadcom adopts with trade and end-customers.

The report calls on Broadcom to restore fair licensing of VMware software for Cloud Service Providers (CSPs), and calls for changes that include: