Broadcom Acquisition of VMware: Get Ready For the Audits!

By Pam Fulmer

Broadcom has announced that it is acquiring VMware for $61 billion.  What will this mean for VMware customers?  Tactical Law has no crystal ball, but we do know that VMware customers are increasingly being audited, and aggressive software audit tactics have recently been reported by companies under audit. Although VMware has always conducted software audits, they were known for a kinder and more gentle approach, then say Oracle or Micro Focus.  Not so much anymore.

Instead some business commentators have noted that Broadcom's CEO Hock Tan’s "previous pattern of buying up software companies like CA Technologies and Symantec will repeat itself with the VMware purchase, with a heavy-handed focus on producing profits favored by investors that could include cutting operating expenses and research dollars and raising prices on customers."  One way that software publishers increase their profits is by conducting software audits.  And that is what the market is seeing in the case of VMware, and the acquisition has not even closed yet.  We predict that VMware customers will see more audits in the coming months.  Now is the time to get prepared.

The Covid pandemic hit suddenly and forced companies to quickly provide a technology solution so that employees could work remotely from home.  Unfortunately the imperative to move fast meant that for many companies remote working technologies were deployed first, without determining whether such use was allowed by the relevant license agreement.   Now those decisions are coming home to roost, as non-compliance is exposed by software audits.

If you have received an audit notice or an adverse non-compliance finding while being audited by VMware, our software licensing dispute attorneys can help.  Check back for further updates about VMware's new audit tactics.