back to article Euro-cloud consortium CISPE calls for investigation of Broadcom

Lobby group CISPE – a collective representing Cloud Infrastructure Providers in Europe – has called for regulators to investigate VMware by Broadcom's software licensing arrangements, which it claims will bankrupt some of its members and hurt end-users. The group on Tuesday objected to what it described as Broadcom " …

  1. STOP_FORTH Silver badge

    As a great Australian/American once said

    A monopoly is a terrible thing, until you have one.

  2. Pascal Monett Silver badge

    Capitalism at work

    This is the pure evil of capitalism. Broadcom bought VMware to kill it. Everyone said so, everyone feared it, and now it's happening.

    All of this because they have every legal right to do this. One might argue that VMware sold out, but as a public company, Broadcom could have initiated a hostile takeover. Much more expensive, but possible.

    Maybe the Board at VMware should have thought things through a bit more - or paid less attention to the brown envelopes.

    And now, we're here. A product essential to many is being summarily beheaded because some suits deem it is in their interest. Interest which I do not understand, by the way. What good is it to kill the product you spent billions to acquire and is working fine ? The revenue is yours now. Just milk that particular cow and be happy. But no, the guillotine it is.

    It's not fair. It's not moral. It's legal.

    Enter government meddling, as every True Capitalist calls it, and right now those people are either strangely silent, or adding their voices to the chorus of cries for governmental help.

    So it seems that rampant capitalism is not actually a good thing after all . . .

    1. Anonymous Coward
      Anonymous Coward

      Re: Capitalism at work

      Considering Broadcom is not mentioned in the Bible or in the US Constitution they probably have no legal basis to exist in the US. Perhaps the Republicans can ban them?

      1. Anonymous Coward
        Anonymous Coward

        Re: Capitalism at work

        I'm pretty sure Broadcom are mentioned in the bible somewhere in one of the chapters involving "salt"

        1. Youngone Silver badge

          Re: Capitalism at work

          If you read the New Testament book of Mark's Letters to the Developers, it's pretty clear that Jesus warned of the dangers of using closed-source tools for your vital infrastructure.

      2. Anonymous Coward
        Anonymous Coward

        Re: Capitalism at work

        “Costs for licenses have increased by a factor of twelve (ie 1,200 per cent) in some cases."

        I presume this in the article was specially for them damn GoP fuckers.

        1. Jimmy2Cows Silver badge

          Re: Capitalism at work

          Did you have a coherent point to make?

          This is fuck all to do with politics. Just pure capitalist greed, proudly on show for the whole world to see. They're doing it because they can.

  3. Doctor Syntax Silver badge

    The merger got a lot of scrutiny from the various monopolies regulators before being approved. Were there no undertaings given about this?

    1. Anonymous Coward
      Anonymous Coward

      Regulators were busy worrying about Broadcom limiting VMware software to require Broadcom hardware, which was always a silly thing to be worried about.

      All while regulators completely missed the real threat, which is playing out now.

      That's the problem when regulators don't understand what they are regulating.

      1. NeilPost

        That’s OK, they can fine them for anticompetitive behaviour instead. All’s good.

  4. Groo The Wanderer Silver badge

    Good luck on that. Unfortunately for the world, corporate greed and insanity aren't illegal, even if they should be. What is the difference between what Broadcom/VMWare are doing to providers and NVidia favouring "preferred" customers for the hardware needed for AI projects (even though I consider LLMs to be barking up the wrong tree, they're popular right now, and the hardware to support them is at a premium?)

    Face it. The American legal and corporate system pretty much mandate that a corporation maximize it's profits for the sake of the shareholders. Customer satisfaction stopped being a goal of corporate America and corporate Canada decades ago; I doubt it is any different elsewhere in the world. Businesses that still provide great service and value-for-the-money are increasingly rare.

    1. Snake Silver badge

      Not exactly true

      "The American legal and corporate system pretty much mandate that a corporation maximize it's profits for the sake of the shareholders."

      That was not always true. For many decades it was understood that the system should maximize the benefits to its stakeholders. There's a difference between 'stakeholders', which classically included both customer and societal interests, and 'shareholders'; the modern neo-liberal interpretation, which started to be pushed in the 1970's, meant exclusively shareholders' interests. For example

      https://corpgov.law.harvard.edu/2019/02/11/towards-accountable-capitalism-remaking-corporate-law-through-stakeholder-governance/

      Big Business and the neo-liberal economists, notably Friedman, pushed the idea of shareholder-only business interests

      https://www.mckinsey.com/featured-insights/corporate-purpose/from-there-to-here-50-years-of-thinking-on-the-social-responsibility-of-business

      because it meant more money when you don't worry about anything else BUT money.

      So greed won out. Big surprise.

  5. Alex 72
    Coat

    Anything big enough to be a PLC should be a benefit corp and be required to have some basic societal benefits as part of its founding documents not just because evil is bad but because over the 10.. 15.. or 25... year horizon.. making your customers lives better and sustainable sustains the business and the shareholder value. Like politicians investors and fund managers tend to work 1 to 5 yaer time horizons and demand bailouts when the outcomes come home to roost. Also that would be radical and we don't have radical centreists in governments at the moment we have right wing and left wing radicals and centerists with shell shock just happy to still be there.

    1. Anonymous Coward
      Anonymous Coward

      What's with the whole growing sustainable business thing anyway?

      Do you you grow sustainable lettuce? No you grow it as big, watery and unsubstantial as you can, cut the head off, and sell it quick.

      1. Screepy

        "Do you you grow sustainable lettuce? No you grow it as big, watery and unsubstantial as you can, cut the head off, and sell it quick."

        Not done much gardening in your life have you?

        The individual lettuce isn't sustainable, you eat/sell that.

        What needs to be sustainable is your ability to continue to produce lettuce of suitable quality for years and years.

        So, instead of being greedy and harvesting all your lettuce at once, for a huge feast/profit, you need to let some lettuce run to seed, harvest that seed and then replant them for the next season. Rinse and repeat - sustainable.

        So what that rather messy metaphor means is Broadcom are harvesting as much money as they can with no apparent thought of the future of VMware. Ie. Not planning for it to be a sustainable long-term..

      2. jospanner

        While we’re doing strained metaphor: This really is the ideology of a cancer cell. Growth for growth’s sake, ignore everything else. We know what this does to its host body.

  6. Roland6 Silver badge

    Is there a viable open source cloud?

    Asking as it would seem CISPE should probably start pushing an open source consortium funded cloud platform, with the EU mandating its use (and interop with as a requirement for proprietary cloud)….

    1. katrinab Silver badge
      Meh

      Re: Is there a viable open source cloud?

      We already have one. It is called OpenStack.

      1. Roland6 Silver badge

        Re: Is there a viable open source cloud?

        I wasn’t sure whether OpenStack had kept up with the infrastructure requirements of cloud vendors and uses and thus could be treated as an equivalent replacement for VMware et al.

      2. herman Silver badge

        Re: Is there a viable open source cloud?

        I think Openstack is one of the reasons why Broadcom is shutting down^W^Wconsolidating their VMWare business.

  7. Bitsminer Silver badge

    Software supply chains

    They said "beware of bugs and exploits in your software supply chains."

    They forgot to say "beware of exploits of your software supplier businesses."

    VMware is a single-point-of-failure for many businesses and organizations. It's only now that they're beginning to understand that.

  8. lordminty

    Not many cores for a 'cloud operator'

    <blockquote>few VMware-powered cloud operators operate 3,500 cores</blockquote>

    That really isn't a lot of cores for anyone that tries to call themselves a 'cloud operator' is it?

    Maybe I've just worked in big shops, but 3,500 cores is only around ~90 ESXi servers with ~40 cores each. My last place had that sort of number of ESXi hosts for one solution comprising of a just 6 applications.

  9. Anonymous Coward
    Anonymous Coward

    Regulators were concerned about chip performance and not monopolistic behavior...

    IIRC, the EU was mostly concerned with BC's Chip business and potential anti-competitive practices in those areas. NICs or FC-HBAs working slower with non-BC chipsets etc.

    Perhaps they did not consider the pervasiveness of a technology in critical infrastructures throughout the world, including IT systems, and Telecom with NFV, and that BC could "shut-off" anyone they wanted by refusing to do business with a company or nation state, or charge whatever they wanted, potentially posing a threat to security, anywhere in the world. Going from perpetual/permanent licenses to Term-based/expiring licenses also gives them tremendous negotiating power...

    People relied on Hock Tan's infamous blog post from Nov 2022 where he assured regulators, customers and Partners:

    No VMware Price Increases, SMB Neglect, Broadcom CEO Vows

    "To be clear, we intend to continue serving customers of all sizes," CEO Hock Tan wrote in a blog post.

    Broadcom CEO Hock Tan is reiterating to VMware customers and partners that Broadcom won’t raise VMware product prices or neglect SMB customers.

    Broadcom in May announced its monumental $61 billion acquisition of virtualization giant VMware. The deal, recently approved by shareholders to close in its just-started fiscal year 2023, has sparked the interest – and concern – of the channel. Those concerns stem mainly from Broadcom’s track record of acquiring companies such as Symantec and CA Technologies. That track record, partners have said both on- and off-the-record, involves heavy cost-cutting and layoffs, price increases and a narrow focus on enterprise customers.

    VMware Pricing

    Tan on Wednesday published a blog explicitly addressing “press reports” that say Broadcom will raise prices for VMware products. For example, Forrester senior analyst Tracy Woo wrote earlier this year that Broadcom enacted “massive price hikes” for CA and Symantec customers.

    "To be clear, we intend to continue serving customers of all sizes," CEO Hock Tan wrote in a blog post. Broadcom CEO Hock Tan is reiterating to VMware customers and partners that Broadcom won’t raise VMware product prices or neglect SMB customers.

    "Hock Tan

    President and Chief Executive Officer

    November 30, 2022

    CEO Insights

    Broadcom and VMware — investing for customer value

    An update from Hock Tan, Broadcom President and CEO

    Innovation

    Listen

    In October, I shared my thoughts about what a combined Broadcom and VMware will mean for customers. I wrote about the conversations I’ve had to date, the future of multi-cloud, and our philosophy on pricing, and I reiterated Broadcom’s commitment to keeping customers at the center of our business.

    Nonetheless, I’ve continued to see questions in press reports about whether we intend to raise prices on VMware products. The answer is simple: No.

    Given the continued interest, I wanted to expand on my thoughts about the pending transaction and share more on how Broadcom will support VMware customers and innovate VMware products once the transaction closes.

    Building on our commitment

    It’s important to remember that Broadcom is an engineering-first company. Our commitment to innovating leading-edge technology, ensuring successful deployments of our solutions, and delivering value for our customers is what drives our growth.

    The addition of VMware will further Broadcom’s commitment in each of these three areas.

    Our business model is predicated on adding long-term value to our products and improving them over time.

    Following the transaction’s close, we’re going to focus on making VMware’s products better for all of our customers, including enterprise customers who want products that are even easier to use. And, to be clear, we intend to continue serving customers of all sizes. VMware has a robust partner ecosystem that we will build upon to help us serve even the smallest companies. In short, we plan to take a “no customer left behind” approach.

    Innovating for success

    How will we spur higher growth and drive customers of all sizes to buy more VMware products than ever before? We’ll do it the way we’ve always done it: through our laser-focus on execution and innovation.

    Broadcom has the scale and capacity to invest major resources in R&D innovation and build on VMware’s talented team by recruiting the best engineers — an advantage that has historically allowed us to develop better technology and product solutions than the competition, whether it’s in broadband, ethernet switching, or endpoint protection.

    By investing and innovating in infrastructure software and VMware’s broad portfolio — including multi-cloud and cloud-native capabilities — we will bring our customers greater flexibility and deliver new solutions to help them connect, scale and protect their IT infrastructure.

    Post-close, we intend to apply this formula for success by investing in and operating VMware with a concerted focus on growth and innovation, while furthering our track record of delivering consistent, justifiable value with our fairly priced solutions.

    Greater customer choice

    As we look to our shared future, we know what goes into successful customer relationships. We also know that if customers don’t find consistent value in the solutions we deploy, they’ll go elsewhere.

    Don’t just take my word for it. IDC highlighted in a recent report that any vendor looking to cultivate successful customer partnerships has to first offer products, support and services that translate into real value.

    In the report, IDC shared a comment from a CIO of a large, global financial services company who noted that, “This acquisition is unique, and it makes sense for [Broadcom and VMware] to form one organization that can increase productivity and deliver a more complete customer experience. Together, Broadcom and VMware will give us [customers] more power to modernize and transform our IT infrastructure to meet the needs of an ever-evolving world, ensuring secure, reliable, and flexible, choices.”

    This CIO is exactly right. As workloads continue to grow rapidly across environments and multi-cloud options expand, a combined Broadcom and VMware will be focused on giving customers greater choice and flexibility over where and how they run their critical operations. We will invest in and innovate VMware’s products to create the next generation of technology that solves customers’ most complex IT challenge".

  10. fredesmite2

    VMware is like a Russian hooker passed around at a Republican convention .

    Time to pay up Cons

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