In a move that has sent ripples through the virtualization industry, Broadcom, the new owner of VMware since its acquisition in November 2023, has begun issuing audit letters to holders of perpetual VMware licenses whose support contracts have expired.

This latest development, reported by Ars Technica, underscores a broader strategy by Broadcom to push customers toward subscription-based models, a shift that has already sparked significant backlash over pricing and licensing changes. One affected customer, speaking anonymously to Ars Technica, revealed their management initially dismissed the threat of audits as a bluff, only to be confronted with the reality of Broadcom’s enforcement tactics.

The audit letters are part of a pattern of aggressive policy changes. Broadcom previously sent cease-and-desist letters to perpetual license holders with lapsed support contracts, urging them to transition to bundled subscription offerings, as noted by WebProNews in their coverage of these communications. This is not merely a nudge but a forceful push, with Broadcom explicitly stating it may conduct audits to ensure compliance with its new licensing rules.

A Shift to Subscriptions and Skyrocketing Costs

The pivot away from perpetual licenses, which Broadcom discontinued shortly after the acquisition, has been a contentious issue. Instead, the company now offers a limited number of VMware SKUs that bundle multiple products, often at a significantly higher cost. WebProNews has reported customer complaints of price hikes as high as 300 percent, a figure that has fueled widespread discontent among VMware’s user base, particularly among smaller enterprises and legacy customers.

This pricing strategy has not gone unnoticed by industry watchdogs. WebProNews also highlighted a staggering claim from AT&T, which accused Broadcom of attempting to raise VMware pricing by an astronomical 1,050 percent during negotiations. Such dramatic increases have led to accusations that Broadcom is prioritizing profit over customer loyalty, alienating a community that once saw VMware as a trusted partner.

Impact on Small Businesses and Industry Relations

Compounding the frustration is Broadcom’s apparent pivot away from small businesses, focusing instead on large enterprise clients. WebProNews detailed how this strategic shift has left smaller organizations feeling abandoned, with many unable to afford the new subscription bundles or meet the minimum contract terms often spanning three years. This has created a perception that Broadcom is willing to sacrifice long-term relationships for short-term financial gains.

Further straining industry ties, the Cloud Infrastructure Services Providers in Europe (CISPE) have accused Broadcom of showing little interest in addressing customer concerns or finding collaborative solutions, as reported by WebProNews. This lack of dialogue has only deepened the rift between Broadcom and its inherited VMware customer base, raising questions about the long-term viability of this hardline approach.

Looking Ahead: Trust at Stake

As Broadcom continues to enforce its subscription model through audits and cease-and-desist letters, the virtualization giant risks further eroding trust among its users. The combination of aggressive pricing, restrictive licensing, and now audits signals a departure from VMware’s historically customer-centric ethos. Industry insiders are watching closely to see if Broadcom will adjust its strategy in response to mounting criticism or double down on its current path.

For now, customers like the one cited by Ars Technica are left grappling with unexpected audits and the looming threat of forced transitions. Whether this marks the beginning of a broader exodus from VMware or a begrudging acceptance of Broadcom’s terms remains to be seen, but the tension is palpable across the tech landscape.