In the latest move in an interesting (and now very public) dispute, Broadcom has responded to AT&T’s claim against it in the New York courts.

AT&T, the Fortune 500 telco giant, has a perpetual licence of VMware virtualisation software. It is seeking a mandatory injunction from the court which would force Broadcom to accept AT&T’s exercise of its renewal rights for vital support and maintenance services in respect of that software (such as security patching).

Without such services, AT&T claims it would not be able to guarantee stable and secure services for its customers (including critical national infrastructure) – what Broadcom terms in its response “the parade of horribles that will allegedly ensue”.

This dispute is a serious escalation in the negotiations, and provides an insight into the high-stakes discussions that are likely taking place between VMware and many of its existing customers seeking contract renewal.

A Fifth Circuit panel ruled Tuesday that a federal court improperly awarded $1.6 billion to BMC Software, a Houston-based software company, over a licensing and competition dispute with tech giant IBM.

Both companies had worked on AT&T’s mainframe systems, with BMC licensing its software to the telecommunications company and IBM providing the hardware. In 2008, the two companies agreed to let IBM use BMC’s licensed software for its own IT business when working with BMC’s customers. The two companies amended a key part of their contract regarding outsourcing in 2013 and 2015.

As part of that 2015 amendment, BMC laid out a provision that said that IBM couldn’t replace BMC’s licensed software on AT&T’s system with their own. The provision also stated that “while [IBM] cannot displace any BMC Customer Licenses with [IBM] products, [IBM] may discontinue use of BMC Customer licenses for other valid business reasons.”

Following a federal court ruling in favor of BMC that left IBM on the hook for $1.6 billion, IBM’s attorney argued before the Fifth Circuit last September that because AT&T had initiated the project to switch from BMC’s software to IBM’s, rather than IBM themselves, IBM did not violate the provision.

The panel sided with IBM in a ruling authored by U.S. Circuit Judge Edith H. Jones, based on a holistic reading of the language used in IBM-BMC contract.

“IBM could replace BMC software with IBM software in AT&T’s mainframe at AT&T’s request. The phrase ‘other valid business reasons’ unambiguously requires this result,” Jones wrote in deciding at IBM did not violate the contract as the agreement does not unequivocally prevent IBM from replacing the BMC software.

“Because the client made that decision without unfair influence from IBM, BMC lost out to IBM fair and square. Under these circumstances, there is no legitimate reason to enforce Section 5.4 against IBM,” Jones wrote.

According to the panel, BMC’s interpretation of the “other valid business reasons” phrase in the provision would have either rendered it superfluous or far too narrow. Beyond that, the panel found that BMC’s narrow interpretation of the difference between “displace” and “discontinue” did not fully explain the non-displacement provision’s meaning.

In 2017, BMC sued IBM in the Southern District of Texas for breach of contract — including violation of that non-displacement provision — after learning of a 2013 project between AT&T, IBM, and other partners to replace BMC’s mainframe software in AT&T’s systems with competing products, including IBM’s own software.

Though the project did not get completed, as AT&T opted to renew its contract with BMC, the Houston company sued after learning about IBM’s involvement.

IBM appealed a May 2022 ruling from U.S. District Judge Gray Miller that focused on the non-displacement provision and had determined the project had “displaced BMC Customer Licenses with IBM products when it implemented Project Swallowtail at AT&T” in violation of the contract between BMC and IBM.

Miller ordered IBM to pay BMC $718 million in license fees for actual damages, an equal sum in punitive damages and $168 million in prejudgment interest, for a total judgment of just over $1.6 billion.

The Department for Work and Pensions has consolidated eight separate Oracle support contracts into an existing £50m arrangement – and at no extra cost to the taxpayer.

The DWP’s primary commercial vehicle for Oracle support – signed directly with the software vendor – was put in place in April 2022 for an initial term of two years, with spending of about £24m during this time. This deal has been extended for a further year and, as of the start of the additional term, will also encompass the services currently delivered via seven other discrete contracts.

Despite this expansion, the consolidated agreement will still cost the department £12m a year – the same price as the single biggest deal into which the others are all being folded, according to a commercial notice newly published by the department.

Assembling a negotiation team of key stakeholders who can contribute their unique talents, knowledge, and expertise will set the stage for a successful software contract negotiation. Involving the right individuals ensures that all relevant perspectives and requirements are considered throughout the negotiation process. Here are some of the team members you should consider including:

The final stage of your software contract negotiation is the most challenging one. This stage requires a strategy to negotiate successfully with the vendor and secure the best possible deal for your organization. Here are some tips and tactics from Gartner that will help with this final step: