AT&T Sues Broadcom For Breaching VMware Support Extension Contract (theregister.com) 76
AT&T has filed a lawsuit against Broadcom, alleging that Broadcom is refusing to honor an extended support agreement for VMware software unless AT&T purchases additional subscriptions it doesn't need. The company warns the consequences could risk massive outages for AT&T's customer support operations and critical federal services, including the U.S. President's office. The Register reports: A complaint [PDF] filed last week in the Supreme Court of New York State explains that AT&T holds perpetual licenses for VMware software and paid for support services under a contract that ends on September 8. The complaint also alleges that AT&T has an option to extend that support deal for two years -- provided it activates the option before the end of the current deal. AT&T's filing claims it exercised that option, but that Broadcom "is refusing to honor" the contract. Broadcom has apparently told AT&T it will continue to provide support if the comms giant "agrees to purchase scores of subscription services and software." AT&T counters that it "does not want or need" those subscriptions, because they:
- Would impose significant additional contractual and technological obligations on AT
- Would require AT&T to invest potentially millions to develop its network to accommodate the new software;
- May violate certain rights of first refusal that AT&T has granted to third parties;
- Would cost AT&T tens of millions more than the price of the support services alone.
[...] The complaint also suggests Broadcom's refusal to extend support creates enormous risk for US national security -- some of the ~8,600 servers that host AT&T's ~75,000 VMs "are dedicated to various national security and public safety agencies within the federal government as well as the Office of the President." Other VMs are relied upon by emergency responders, and still more "deliver services to millions of AT&T customers worldwide" according to the suit. Without support from Broadcom, AT&T claims it fears "widespread network outages that could cripple the operations of millions of AT&T customers worldwide" because it may not be able to fix VMware's software.
- Would impose significant additional contractual and technological obligations on AT
- Would require AT&T to invest potentially millions to develop its network to accommodate the new software;
- May violate certain rights of first refusal that AT&T has granted to third parties;
- Would cost AT&T tens of millions more than the price of the support services alone.
[...] The complaint also suggests Broadcom's refusal to extend support creates enormous risk for US national security -- some of the ~8,600 servers that host AT&T's ~75,000 VMs "are dedicated to various national security and public safety agencies within the federal government as well as the Office of the President." Other VMs are relied upon by emergency responders, and still more "deliver services to millions of AT&T customers worldwide" according to the suit. Without support from Broadcom, AT&T claims it fears "widespread network outages that could cripple the operations of millions of AT&T customers worldwide" because it may not be able to fix VMware's software.
Interesting (Score:5, Interesting)
When bullies fight on the playground . . . (Score:3)
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Yeah? What business takes a loss that customers dont pay for?
Ones that don't have sufficient power in the market to raise prices. Which can be a lot of companies depending on how competitive the market is.
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> Ones that don't have sufficient power in the market to raise prices. Which can be a lot of companies depending on how competitive the market is.
Which only means that such a business in a tight market would be put at a competitive disadvantage and ultimately go bankrupt or be acquired by a competitor -- which then results in raised prices for the customer.
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The alternative to raise prices is to cut down on "freebies" like going from 2GB free storage space to 1GB. A.k.a. shrinkflation.
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Re: Interesting (Score:2)
It can now open the gates for filings from many other large companies as well.
I assume that this filing is one that made the news and that there are many other filings that aren't public.
Agree - Buy a company - amortize license revenue (Score:2)
A large number of computer companies have for decades followed a basic business plan
1. Buy a once high flying software product with a large entrenched corporate use base
2. Barely ever update the software
3. Keep increasing the licensing cost year after year to drive off corporate customers
4. Occasionally, near the end of lifecycle, so that the software product can be killed, set licensing terms to 5x or 10x the prior year's licensing costs
5. Sell the software product to a wind-down firm onshore of offshore t
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Seems like a plan for quick money, but it seems like AT&T caught on to it quickly.
The problem is that unless the top level management of corporations acts swiftly on changes like this then Broadcom will get away with it.
If Broadcom gets bombarded with court cases then they might not get as much profit from it, but this is a big money flow. So if only AT&T goes ahead then that's just an operational cost covered by the price hikes, but if the AT&T case goes through then it could start to become a
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Not really. It sounds more like a standard contract breach style of lawsuit, which doesn't really have many repercussions other that maybe upsetting the way in which contract terms may be interpreted. (Which is basically what most contract lawsuits are inevitably about).
All that would happen would be suddenly terms and conditions get updated wi
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This has been a problem ever since the advent of shrinkwrap software agreements. For those old enough to remember, when PCs started being used in businesses that already had a large IT shop (IBM, DEC et al.) contracts were negotiated. When PC software came into play in that environment it sent the lawyers heads spinning. I remember trying to get a copy of Dbase for a project we were working on and it got blocked because the T's and C's weren't acceptable to the corporate lawyers.
Fast-forward about 30 years,
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well in the last update the pop up EULA voided all the rights your old contract had.
Go get 'em, tiger! (Score:3)
Two ugly companies, but one is not wrong.
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With two companies entering into a perpetual agreement with an expiration date, I'm hesitant to say that one must be right . . .
Re:Go get 'em, tiger! (Score:5, Informative)
There is no "a perpetual agreement with an expiration date". From TFS:
AT&T holds perpetual licenses for VMware software and paid for support services under a contract that ends on September 8.
The software licenses are perpetual. The support agreement is not. This is an extremely common arrangement for software where a perpetual license (rather than subscription) is still available; a support contract normally entitles the customer to both technical support, with some SLA, and updates to the latest releases of the software.
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Two ugly companies, but one is not wrong.
The brilliant thing about a civil suit is it's not a zero sum game... both sides can lose.
Lawsuits, only good for the barristers.
Such drama (Score:2, Insightful)
As I read the story, AT&T has a perpetual license and the ability to pay for extended support for the current software they are running, but VMware/Broadcom doesn't want to honor the agreement as written/agreed to.
OK, here's a thought - run the software without VMware support, and use the funds you would have spent on support to transition to a new virtualization platform?
It sounds like AT&T is using older, more mature software, shouldn't the vast, vast majority of vulnerabilities have been addresse
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Given the brouhaha being generated over this, the rational part of me thinks there must be more to this story than what has been reported. But, if the situation is as described, then this isn't the way rational reasonable people behave.
AT&T has an option to extend its service contract for two years, so Broadcom should honor the existing contract. If Broadcom has reason to second guess or revise its contract policies, so be it - new policies can go into effect in future contracts. For now, even if the
Re:Such drama (Score:5, Interesting)
OK, here's a thought - run the software without VMware support, and use the funds you would have spent on support to transition to a new virtualization platform?
It sounds like AT&T is using older, more mature software, shouldn't the vast, vast majority of vulnerabilities have been addressed by now?
Some of VMware's hypervisor and management products are very complex and are basically entire OSes on their own (often with a userspace vaguely based on Linux, with the usual critical commonly used libraries like TLS, web servers, etc.). They've had a few doozie vulnerabilities over the years, things that no serious enterprise could leave unpatched. Just because software is a few years old, it doesn't mean that researchers or hackers won't reveal new exploits in the future.
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Uh yeah. Three days ago VMWare posted this [vmware.com] announcing fixes for two CVEs.
That's why you buy support and that's why running large IT infrastructure takes people and testing and $$. Just running the software and hoping there are no vulnerabilities is a dumb premise.
Re:Such drama (Score:5, Insightful)
You must not work in IT, or any industry with a high cost of failure and/or high up time requirements.
Someone doing government support for mission critical things is not going to be able to sell their customers on "trust us, it's old but probably is fine".
To pretend that no more vulnerabilities will be found is equally hysterical.
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As I read the story, AT&T has a perpetual license and the ability to pay for extended support for the current software they are running, but VMware/Broadcom doesn't want to honor the agreement as written/agreed to.
OK, here's a thought - run the software without VMware support, and use the funds you would have spent on support to transition to a new virtualization platform?
I suspect that's exactly what was already in progress, and that Broadcom is trying to squeeze a little bit more money out of them knowing that the gravy train is about to dry up.
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Your point that they should spend money switching to a new solution is valid. However, for any bureaucracy (including Ma Bell 2.0) change is slow and they have needs in the interim.
I don't know what "lifetime" actually means here, and I do not think that it is unreasonable to assume that no one else posting here has done so either. None of us really knows whether this contract makes any sense in the light of vmware's new assholiness. But expecting ATT to switch courses any time soon is fundamentally unreaso
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"OK, here's a thought - run the software without VMware support, and use the funds you would have spent on support to transition to a new virtualization platform?"
As much as I hate VMware and especially Broadcom, there is nothing out there that can actually replace VMWare. Yes, there are other virtualization platforms, but none of them are anywhere near as good as VMWare. My company just did a deep dive with the competitors looking for something to swap to, but there just isn't anything on the same level. T
proxmox does not have the same level of support th (Score:2)
proxmox does not have the same level of support or services that VMWare has.
Also AT&T has lot's locations and network setup that you can't just put into an AWS. Hell they may even provide network links for places like AWS.
ALSO perpetual licenses are needed for both limited outbound access locations and for cases like we need our software to work and not time out due to use not paying an X5 bill boost when it's time to renew.
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Best is hard to measure, because what's good to you might not be good to me.
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No doubt they will be in breach of their contracts with their customers if they don't have vendor support contracts for the software they use
Transitioning 75,000 VM's to a new platform isn't a cheap task.
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> OK, here's a thought - run the software without VMware support, and use the funds you would have spent on support to transition to a new virtualization platform?
That's much more expensive and extra testing and development---and with mission critical services, just doing anything to migrate or turn them off is a big problem.
The services they're providing are critical enough that they will be the target of expert national level malevolent cyber warfare---not mere incidental hacking. And they will 100% t
godzilla vs gigan (Score:3)
Juicy. Will Broadcom best AT&T with it's legal laser? Does AT&T have a mirror that big?
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AT&T does have the Death Star!
Re: godzilla vs gigan (Score:3)
AT&T may even have the power to disconnect Broadcom from the internet.
It's not the Office of the President (Score:1)
I love it when the media just can't get it right. All you have to do is vet the data, then copy the data, then paste it.
The Executive Office of the President (EOP) is known by that name only. There's no such thing as "Offce of the President" in any role other than as any room in which President Biden happens to be, like an Air Force One or Marine One kinda thing.
BTW neither has any VMware servers in it. Hasn't in over 20 years. Respectfully I call bullshit.
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They're talking about VMware servers used by AT&T, not directly by the EOP or someone government side.
Re: It's not the Office of the President (Score:1)
Business as usual. Ho hum... (Score:2)
One side fails to deliver on their side, the other actions for breach. This isn't really a story, unless significant numbers of current licensees walk away at renewal time, having internalized the cautionary tale.
Broadcom has probably done the math and decided that the profit from the support agreement extension isn't worth their time. It's worth the strong arm approach to try to turn this into subscriptions instead. Little to lose, lots to gain.
Re: Business as usual. Ho hum... (Score:2)
Don't forget that it's a huge effort to change virtualization environment, and VMware used to be the safe stable and easy to use choice.
New licenses for VMware has been rumored to be up to 10x the price compared to before the takeover.
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There's a first for everything.
Re:No one ever got fired... (Score:4, Funny)
"No one ever got fired for buying VMWare."
Broadcom: "Let's see if we can change that."
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New licenses for VMware are priced per core and now have a 16-core minimum even if you only have 8 physical cores on your server.
It's madness.
Well, there's your problem. As usual. (Score:4, Insightful)
The unusually vivid language in its complaint suggests the telco is angry. On Thursday, we may all learn if AT&T alone in its anger. That's when Broadcom announces its quarterly results, after previously offering guidance that VMware revenue will rise every quarter.
The enshitification of all things. Driven as always by wallstreet demanding rising revenues quarter over quarter over quarter over quarter, forever.
Re: Well, there's your problem. As usual. (Score:4, Insightful)
AT&T isn't alone, I work for another major corporation that depends on VMware, but I have no insight in what the top level management does in this case.
Perpetual keys will be hot black market stuff for anyone that want to survive a sudden death of VMware, if only to hold out long enough to be able to change to something else.
VMware used to be the safe choice, basically the Microsoft of virtualization. But this year it has become a choice that can endanger your profit. Expect many cloud services to become expensive too.
Meanwhile I have been waiting for a quote on a low end VMware ESXi license for two months now and no response even though we have asked multiple suppliers. If I was allowed to consider an alternative acceptable for corporate use it would be Hyper-V, even though that's not as good as VMware.
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Re: Well, there's your problem. As usual. (Score:2)
Seems reasonable, some rumors says that Broadcom only plays hardball and uses lawyers for dirty gameplay, so I'm not surprised by the action that AT&T has taken.
Re: Well, there's your problem. As usual. (Score:2)
Your takeaway from VMware being a problem is that you would hitch your star to Microsoft? Wow.
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But open source KVM/QEMM is even better. And the more that use and contribute to it, the better it gets.
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If I was allowed to consider an alternative acceptable for corporate use it would be Hyper-V, even though that's not as good as VMware.
Or, you could use Nutanix, which is superior to Microsoft's Hyper-V and VMWare.
Zero alternatives are possible? (Score:3)
Sure, I'm happy to see someone go after Broadcom for these monopolistic shenanigans, but isn't this also AT&T admitting it has no viable backup plan? Based on the threats of outages...
How brittle is OK for major utilities? How can we make people care BEFORE something like this happens? And how do you objectively measure it without simply trusting self reported claims?
Almost feels like another good place for secure software (not just DRM). Though last I read we can't even play back Blurays on consumer hardware because there isn't a 'trusted execution environment' anymore (Intel removed theirs and AMD never had one).
Re:Zero alternatives are possible? (Score:5, Insightful)
There are certain key pieces of software, like VMWare, MS Windows, and MS Office that almost no corporations have backup plans for.
Microsoft obsoleted Visual Basic 6 when .NET was launched, and VB6 programs are still in use.
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Backup plans or Alternatives? In modern Enterprises, there are strategic decisions and partnerships that manifest into a ton of money invested. You can't change out pieces of your strategic architecture without planning and resources. The time for A&T to seek alternatives to VMWare was two years ago when Broadcom acquired VMWare. They feel strongly about their contract as any company of their size should, then again Broadcom isn't a mom-and-pop organization either.
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Sure, I'm happy to see someone go after Broadcom for these monopolistic shenanigans, but isn't this also AT&T admitting it has no viable backup plan? Based on the threats of outages...
Do you like your company doubling or tripling IT expenses? It is not feasible to have fully functional alternatives to every piece of software you use.
Take database for example, how many company could afford to write their programs to work with RDBMS from two different vendors, and keep testing on both of them throughout the whole software lifecycle, just so they can switch if one vendor extort them? Keeping in mind they would be paying both vendors the whole time.
Now do the same for OS, application serve
Re:Zero alternatives are possible? (Score:4)
... but isn't this also AT&T admitting it has no viable backup plan? Based on the threats of outages...
How brittle is OK for major utilities? How can we make people care BEFORE something like this happens? And how do you objectively measure it without simply trusting self-reported claims?
Risk is mitigated through multiple measures, and a contract with optional - as determined by the customer, not supplier - extensions was chosen to mitigate financial risk. (We haven't seen anything yet on product viability risk, though I would expect AT&T IT is working on this now that there's real probability of it occurring.) Broadcom seems to have decided to throw out the contract to try and extract more dollars. It will be interesting to see the outcome.
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There's Proxmox and Nutanix as said before, who are working furiously to pick up as many of the abandoned VMware customers as they can. A gig like this would probably prompt them to upgrade their support offerings to be able to claim this big a win over Broadcom/VMware.
If the concern is "enterprise-level' support, some combination of Red Hat's Openshift (which can now drag 'n drop full VMs via KubeVirt) with some generous amount of IBM/RH consultancy to migrate might be the answer. Again a case where the
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I'm sure they do, but it will probably take two years to implement.
VMWare is dead (Score:1)
VMWare in comparison costs $50/CPU Core/year for vSphere sta
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I doubt that a corporate bohemith like AT&T is going to look at Proxmox as an alternative for their (probably massive VSphere clusters). It's just not "enterprisey" enough for them, and AT&T probably wants dedicated a dedicated support team with guaranteed 4 hour response times.
I could see Microsoft offering a Hyper-V "enterprise" support offering they would like, though, along with IBM/RedHat offering something similar from their OpenStack product line.
Proxmox still some way to go to be upto what VSphe (Score:2)
Proxmox still some way to go to be up to what VSphere has.
Re: Proxmox still some way to go to be upto what V (Score:1)
What feature do you think is missing? Because people keep being surprised that yes, it supports that.
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Given the old 80/20 rule, what features are lacking in Proxmox vs. VSphere **THAT ARE ACTUALLY BEING USED**? Lather/rinse/repeat for Nutanix, Openshift, ...
I expect the AT&T admins are diligently checking into the size of those lists and talking to the respective vendors as a precursor to picking whichever one is the closest fit and most likely to fill in the missing spaces in the least time.
Proxmox has free updates you just pay for the mor (Score:2)
Proxmox has free updates you just pay for the more tested repo. The free repo gets the updates 1st with less testing. The paid repo does not update right away.
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That...sounds a little bizarre. Couldn't you get the effect of the paid repo for free just by delaying the patches?
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That free repo is essentially turning you into a beta tester.
Not that I've had any problems with that.
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VMWare in comparison costs $50/CPU Core/year for vSphere standard, from what I can find. It has a minimum of 16 cores per CPU socket, so $800/year per CPU.
Try $150 per core for the enterprise version.
Can't believe I'm saying this.. (Score:2)
Can't believe I'm saying this.,.but .. GO AT&T!
Broadcomm is a homewrecker. Threw a huge spanner at the gearbox along with a fistful of pocket sand. This isn't how you make and keep customers.
We're a 100% vm shop, and we're looking at azure. We have no intention in feeding Broadcomm.
I'm getting me some popcorn, it's showtime!
Re: Can't believe I'm saying this.. (Score:2)
As much as I'd like Broadcom to suffer a major legal broadside attack by multiple customers I'm prepared for disappointment on that outcome and is considering alternatives including reverting to cheap standalone servers built from desktop computers like the Dell optiplex micro formfactor.
Broadcom doesn't care about keeping customers (Score:2)
They care about jackpotting the customer base for a few years and then sell the corpse of vmware to another company when "due to changing market conditions (that we made becase we're clueless assholes)" force their hand.
Enshitification (Score:2)
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"I have altered the deal."
Ironically, *AT&T* is the one with the Death Star...