The Cloud Infrastructure Service Providers in Europe (CISPE) has taken action to annul the European Commission’s approval of Broadcom’s acquisition of VMware. CISPE argues that the European regulators did not properly assess the licensing changes proposed by Broadcom, which they believe could harm cloud infrastructure providers and their customers by entrenching VMware’s position in the market, limiting competition and innovation.
Spokesperson Ben Maynard indicated that since the acquisition was finalized in July 2023, Broadcom has terminated existing contracts with short notice and implemented new licensing terms that have significantly increased costs for customers—sometimes more than tenfold—while also introducing multi-year commitments for access to VMware software. These changes could potentially exclude smaller cloud providers from accessing vital VMware technologies.
The appeal is currently with the European General Court and could take 18-24 months, or longer for more complex cases. Despite the ongoing appeal, Broadcom continues to assert that it complies with all regulatory commitments made during the acquisition approval process, aiming to provide better technology solutions for customers.
Dario Maisto, a senior analyst at Forrester Research, noted that Broadcom’s actions have raised concerns since the acquisition, with European organizations reporting sudden price increases and service closures. He suggested that the appeal is mainly a long-term strategy to improve market competitiveness, analogous to previous antitrust cases.
John Annand from Info-Tech Research Group observed that while Broadcom’s changes benefit their business, they adversely affect numerous partners and customers, particularly smaller cloud service providers within CISPE. He pointed out that while European clients may be restricted from purchasing VMware through specific providers due to these new restrictions, several alternative virtualization solutions are emerging, providing options for those seeking to migrate away from VMware.
As the situation evolves, CISPE’s initiative may reflect a larger push for more equitable competition in Europe’s cloud market, especially as dependency on major IT vendors becomes a pressing issue for many organizations.
For more details on the situation, you can refer to the official CISPE release and other related updates from VMware’s acquisition landscape.
