Lessons from the AT&T vs. Broadcom Dispute Digital transformation is continuing at pace, with organisations starting to deploy new transformative technologies like AI and fully embrace cloud and other service based solutions. However, as we become more reliant on our digital service providers, it is increasingly important to ensure that our contracts with them provide sufficient stability and certainty. Suppliers are facing increased costs, both to supply their services and to comply with an increasingly complex web of digital regulation, and they may therefore be looking to fully enforce their contracts where there are financial incentives to do so. Last year’s (now settled) dispute between Broadcom and AT&T is an example of this. So what lessons can we take from this dispute when negotiating new digital arrangements in 2025? AT&T v Broadcom: the facts When Broadcom took over VMware, it announced (in December 2023) that it would restructure VMware’s software licensing model, moving from a perpetual licence model to subscription licensing products (with such products sometimes being “bundled” with other products). AT&T, the Fortune 500 telco giant, had a perpetual licence of VMware virtualisation software and did not want to move to the new subscription model, which would result […]
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