In the latest blow to Broadcom and VMware, a Dutch court has ordered the software firm to continue providing access to its solutions for the country’s national water agency.
The District Court of The Hague (Rechtbank Den Haag) ruled that the vendor must offer exit support to the Ministry of Infrastructure and Water Management (Rijkswaterstaat) while it transitions to an alternative provider.
The ministry had been using VMware products for years but opted against adopting the highly controversial new subscription model introduced following Broadcom’s high-profile acquisition of the company.
After examining the cost of the revised licensing structure, which bundles VMware’s software into a single package, the agency found the new model would raise annual expenses by 85%, from around $2.4 million to nearly $4.6 million.
When the ministry proposed a gradual exit over two to three years, Broadcom refused to extend support unless it agreed to the new terms, effectively leaving no safe off-ramp.
The court found that Rijkswaterstaat had been “trapped,” undermining Broadcom’s claim that the situation amounted to standard commercial negotiation.
“Broadcom must enable Rijkswaterstaat to phase out its use of VMware,” the court order reads [translated].
“Broadcom is required to ensure that Rijkswaterstaat continues to receive support sufficient to maintain proper functioning of the VMware products. By failing to do so, Broadcom acts in breach of its duty of care.”
If Broadcom fails to comply, it faces penalties of $290,000 per day, up to a maximum of $29 million.
It’s the latest in a series of setbacks for Broadcom and VMware following the subscription change, with European customers especially put off by the cost increases.
Earlier this year, the European Cloud Competition Observatory decried the revised model as “legally and ethically flawed” and that it relies on practices that breach EU competition regulations.
Broadcom, however, is doubling down on the changes, arguing that 87% of VMware’s 10,000 largest customers had signed up to the revised pricing model.
Just last week, reports surfaced that Broadcom were conducting audits of now former VMware customers, looking into what software and services they use – some weeks after sending those same ex-users cease-and-desist letters.
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