Allstate Insurance quits Broadcom, alleges vengeful license audit on the way out Broadcom has accused Allstate Insurance of dodging a software license audit that the insurer claims only happened after it decided to stop using VMware and CA software. Those two Broadcom business units – CA and VMware – have brought copyright infringement lawsuits against Allstate. The CA suit, filed in May 2025, alleges that …
>"After terminating its VMware estate, Allstate said Broadcom’s audit scripts wouldn’t work. The insurer nevertheless completed an audit questionnaire, but Broadcom said the info in that document was “woefully incomplete.”"
So if I ever end up in Allstate's shoes, I'll be leaving one VMware box with a single instance of SBS2003 with 512 MB RAM as the only client instead of wiping everything.
I'm not an expert in the licensing area, so this is a genuine question:
Would each license not have an individual ID registration / number that allowed Broadcom to check it? And similarly, do the licenses not phone home periodically to check for a valid license and updates?
OK if they are perpetual licenses but then where would the issue be if they were perpetual (other than Broadcom wanting to move the use to a subscription service?)
Yes, each license key would be unique to each customer, as well as having limits on it for what features, capacity, etc. the license supports.
It depends on how they bought VMware licenses in the past if things have to check in. Some channels of licenses you had to run Usage Meter on, some you didn't. While there is an offline feature of Usage Meter, it was hardly allowed ever. Other channels of licenses did not call back to the home office. and it was trusted with audit backup that everything was deployed and conformed correctly. The core products do not contact back to VMware, only Usage Meter. (Two software sets that do connect back directly are AVI Load Balancer, and now vDefend FW).
One thing that Broadcom has made very clear is that it is against the terms of the license that you cannot patch/upgrade perpetual licenses without subscription support services on it.
Large corporations must run full patched software for terms of compliance (ie. in order to even get cyber insurance you would have to prove to be fully up to date and patched).
If an audit turns up your perpetual software licenses with expired subscription services have patches applied that were released past the subscription expiration date, the company would be on the hook for catching up and paying for all subscription support services. Since patching is pretty much a requirement, this patching often went on and nobody wants to pay subscription support fees, so that was frequently dropped.
Most likely this scenario described in the story was smoke screen to hide that they abused patches so they didn't have to catch up and pay Broadcom for their true usage.
Also, it could be they claim to have shut off all services, but they continue to run in the backend without Broadcom knowing any better, because they turned off Usage Meter, and claim an audit won't find anything. Its not like an auditor drives to the data centers, and physically tally every machine they find within it.
Yes the latest Broadcom version of the VMware software changes the license model. All software is required to call and check in and will disconnect your hosts if your subscription license isn't valid and up to date.
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With perpetual licenses you can use the same key on multiple vCenters - In some cases it's done by accident, something that regular audits/true-ups will catch and remediate. Or it could be done on purpose to avoid paying for licenses for a lab or other non-production environment, that doesn't need the vendor support for compliance, cyber insurance purposes etc.
Oh man, whose side to be on in this one. Telco's can be bad, but having sympathy for those blood sucking insurance co's is beyond my abilities. After spending literally 1 year with state farm stonewalling my claim, I know insurance co's know how to stonewall. It took a lawyer in my case to break the wall. And they paid, well me and my lawyer split it so I got some.
But sympathy for broadcom is also not possible. Can we burn them both somehow?
"VMware points to major clients such as the London Stock Exchange and Nationwide Bank "
I'm hoping that VMware do point to Nationwide Bank as a major client in their depositions as Nationwide isn't a bank, it's a building society. Points to lack of credibility in their submissions m'lud.
I had to work with Allstate as a customer at a previous employer and despite having so much cash their IT setup was awful. That said, living in the UK I don't really care about Allstate whereas Broadcom can influence over here so I'd rather Allstate won but that the lawyers took all the winnings (probably true anyway).
Yankee lawyers probably have no idea what a member owned building society actually is. A Credit Union is the closest thing in USland.
Personally, I hope that Broadcom get a big bloody nose here. While I don't have a lot of time for big Insurance companies, Broadcom seem to be trying to out do Oracle on the 'Being obnoxious' towards customers who want to exit stage left.
Publicity that will have new customers queuing up to use VMWare.
If you have legacy Oracle or VMware and your roadmap doesn’t have an exit plan for both then you are negligent.
I have a colleague who invested in his own career with VMWare training to VCAP level quite unhappy that his world is shrinking before his eyes.
Heard from a client that they initially denied Broadcom an audit because the audit scripts they were presented with collected a huge amount of data, most of it completely unrelated to VMware or Broadcom products.
The client said basically they finally agreed when presented with a limited audit script. It took a lot of pushback though…
On the one hand, being dicks might scare a lot of small fry businesses to renegotiate contracts, pay for cloud products etc. and squeeze a lot of cash. On the other, it seems like the big fish, the blue chips aren't going to be held to ransom, and have the resources and financial will to move away from VMware and sue Broadcom in the process. And whatever cash Broadcom get in the short term is surely lost in reputational harm, lack of trust, lawsuits and lost customers in the future.
Broadcom's handling of VMware is completely bizarre. They've deliberately thrown away tens of millions in revenue from small customers - most of whom will have gone through a reseller and therefore have very little 'cost' to VMware - and now they're antagonising their bigger customers, the very ones they decided to pin their future on.
It almost seems like there's a level of vindictiveness from Broadcom to completely wipe VMware out. Did the VMware CEO beat the Broadcom CEO at golf or something and this is their revenge?
They hope they can focus on the cash cows and lose the rest, or force them to become cash cows too. The problem is this only works short term. By being so awful they're forcing companies to make a decision and clearly some of the largest, most lucrative customers are choosing to walk away and sue them on the way out. And the ones that remain will have their eye on the exit from this point forward. So short term gain, long term loss & reputational suicide.
The whole deal was probably done by the finance/legal depts. They did an analysis of how much can we squeeze from the top customers and if > cost of deal, do it. We have gone from the google mantra of "Don't be evil", to how much money can I make by being evil. I've said this a few times before, and I am starting to at least see the EU put some fines on tech that actually sting a little, but until the fines reach the hemorrhage stage where the co goes flatline from them, I expect it to continue to get worse. It should be something like screw people to make a buck, costs you a 100, or more. Not the current model of screw people for a buck, get caught pay a milli-cent.
Broadcom wants to be like NVIDIA and ride the AI train. They need a lot of cash in order to grow their chip business into AI space like NVIDIA. They are ruthlessly extracting that cash from the VMWare customer base. They don't care about the longevity of VMWare after they've extracted the cash they need from it, it is simply a means to an end. Hock Tan wants to be Jensen.
