Cease-and-desist letters target expired support contracts, compelling enterprises to reconsider software strategies.
Broadcom (Nasdaq:AVGO) has initiated what appears to be a systematic legal offensive against subscription-less VMware customers who hold a perpetual software license and have expired support contracts, some within days of expiration.
The legal notices demand immediate removal of any updates installed after support expiration and explicitly threaten “claims for enhanced damages and attorneys’ fees” for what Broadcom characterizes as intellectual property infringement, according to the letter, Ars Technica reported.
“VMware, immediately demands that all use of Support Services associated with VMware Software, including Maintenance Releases/Updates, Minor Releases, Major Releases/Upgrades, extensions, enhancements, es, bug fixes or security es (with the exception of zero-day security es) be ceased,” the Broadcom letter read. “The implementation of any of the aforementioned (excluding select zero-day es as defined above) past the Expiration Date must be immediately removed/deinstalled.”
“Broadcom’s move to enforce cease-and-desist orders against lapsed VMware perpetual licenses marks a sharp shift in software enforcement,” said Sanchit Gogia, chief analyst and CEO at Greyhound Research. “This is no longer about support expiry. It’s about redefining ownership in enterprise software.”
Broadcom is also facing legal challenges from several of its users over its licensing policies. On Thursday, VOICE, a German association of IT users, filed a complaint with the EU Commission against Broadcom/VMware for infringements of competition law. According to the user association, Broadcom is abusing its dominant market position in the field of virtualization software.
Automated enforcement strategy
What distinguishes the cease-and-desist campaign from typical vendor compliance efforts is both its timing and apparent lack of targeting. Multiple organizations have reported receiving legal notices almost immediately after support expiration, suggesting an automated enforcement mechanism rather than investigation-driven actions.
Perhaps most concerning for enterprises, some organizations have reported receiving these legal threats even after completely migrating away from VMware technologies. One user on Reddit described receiving a cease-and-desist letter despite having already transitioned entirely to Proxmox, raising questions about Broadcom’s tracking capabilities and enforcement criteria.
The notices universally include audit threats, with Broadcom asserting it “may exercise its right to audit Customer as well as any other available contractual or legal remedy” against companies it suspects of non-compliance.
“The audit threat is particularly problematic,” said a CIO of an Indian Bank, who requested anonymity due to ongoing negotiations with the company. “Even if you’ve done nothing wrong, an audit requires significant resources to prepare for and respond to.”
Experts suggest Broadcom is testing expansive interpretations of intellectual property rights that could establish new industry precedents
“If left uncontested, this action could trigger new legal precedents around the enforceability of licence terms long considered dormant,” Gogia warned.
C-suite crisis management
The enforcement campaign comes amid Broadcom’s controversial restructuring of VMware’s business model, which eliminated perpetual licenses and increased subscription costs substantially for customers. Many companies have switched to competitors, citing higher cost and “not-so-friendly” practices by Broadcom.
“We don’t like to be arm-twisted or have a gun pointed to our head,” said the CIO of an Indian broadcasting company, who wished to remain anonymous. “Hence, we exit the relationship with such partners if they behave irrationally.”
Broadcom is using legal pressure to accelerate customer migration to its new subscription offerings.
“If these actions aren’t legally challenged or publicly reversed, they could set a dangerous norm where major software providers aggressively police legacy contracts to coerce modernisation or re-subscription,” Gogia pointed out.
For many organizations, the legal notices have forced the acceleration of migration plans that were previously scheduled as multi-year projects.
Industry-wide implications
Analysts warn that this enforcement strategy could become a template for future software industry acquisitions. “We’re witnessing the birth of a new playbook for extracting value from acquired customer bases,” said Gogia. “Other enterprise software vendors are watching this campaign closely.”
The approach represents a significant shift in how software vendors manage the transition of acquired customers to new business models. Traditionally, companies have provided extended migration periods and incentives rather than legal threats to encourage adoption of new licensing schemes.
Some industry observers suspect the campaign serves a dual purpose as an intelligence-gathering operation. By tracking which organizations respond to the letters and how, Broadcom potentially gains insight into which customers might be most vulnerable to further pressure.
“Every response to these letters provides Broadcom with valuable information about a customer’s dependency on VMware and their willingness to fight back,” said the CIO of the Indian banking company.
Broadcom did not respond to requests for comment.
