VMware has spoken out after apparently offering this major customer a massive price increase

AT&T accused VMware of proposing a staggering 1,050% price increase under new ownership of Broadcom, leading to a legal dispute between the two companies.

The lawsuit was shared in a legal document filed by AT&T that alleged that Broadcom had failed to honor a previous agreement allowing the telecommunications giant to extend support for its VMware software for another two years.

AT&T’s frustration with Broadcom was confirmed in a letter from AT&T Vice President Susan A. Johnson addressed to Broadcom CEO Hock Tan, shared by Register.

AT&T Faces 1050% VMware Price Hike

In his letter, Johnson called the proposed price increase extreme and unexpected given the companies’ strategic partnership.

AT&T also raised concerns about the difficulty of migrating from VMware, even though alternative solutions had been explored for almost a year. Because VMware is deeply integrated with AT&T’s network operations, migration would prove costly (in the $40-50 million range) and time-consuming.

“AT&T has chosen to pursue a legal strategy along with a disciplined investment plan to migrate, all of which will be made public quickly,” Johnson added

Despite shared concerns about unfair treatment and plans to exit VMware, Johnson said the company would be willing to “engage with any reasonable offer.”

More broadly, AT&T isn’t the only company complaining about Broadcom’s drastic changes to its acquired VMware business. Shortly after the buyout, VMware perpetual licenses expired, and in the following months, customers increasingly expressed their dissatisfaction.

Civo recently confirmed that more than half (52%) of VMware customers were considering migrating amid the confusion.

Several Broadcom executives, including CEO Hock Tan, have spoken out about changes aimed at reassuring customers, but so far they have proven relatively ineffective. – said the company spokesman TechRadar Pro in e-mail:

“Broadcom strongly disagrees with the allegations and is confident that we will prevail in the legal process. VMware has been moving to the subscription model that has been standard in the software industry for several years, starting with its acquisition by Broadcom. We will continue to focus on providing our customers with choice and flexibility while helping them solve their most complex technology challenges.