Broadcom’s VMware Partnership Termination Sparks Controversy in Europe
In a significant move that has raised concerns among cloud service providers in Europe, Broadcom recently announced the termination of its VMware Cloud Service Provider program. This decision, communicated in January 2026, has left only a select few partners eligible to sell VMware products, effectively sidelining most European cloud service providers (CSPs). The Cloud Infrastructure Services Providers in Europe (CISPE) reacted strongly to this unilateral decision, viewing it as harmful to competition in the sector.
Allegations of Price Hikes and Commitment Issues
CISPE has accused Broadcom of ongoing abusive practices following its acquisition of VMware. Reports suggest that some customers have faced staggering price increases—up to tenfold in certain cases, with some accounts indicating rises as high as 900%. Furthermore, CISPE highlighted concerns over product bundling and commitment requirements based on projected usage, rather than actual metrics. This raises red flags regarding fairness and transparency in pricing.
CISPE Secretary General Francisco Mingorance emphasized the severity of the situation, stating, “After imposing outrageous and unjustified price hikes immediately following the acquisition of VMware, Broadcom is now applying the ‘coup de grâce.’ We need urgent intervention to force them to change.” This statement underscores the urgency felt by European CSPs who feel cornered by the new pricing structure.
Broadcom’s Response and CISPE’s Position
In response to the allegations made by CISPE, Broadcom has firmly denied any wrongdoing. The company argues that CISPE misrepresents market realities, asserting, “We continue to be committed to investing significantly in our European VMware Cloud Service Provider partners… helping them offer alternatives to the hyperscalers and meet the evolving needs of European businesses and organizations.” This statement reflects Broadcom’s intentions to maintain a cooperative relationship with the remaining partners in the program.
CISPE currently represents 50 members, including notable hyperscalers like Amazon Web Services and Microsoft. However, it clarifies that these companies hold no voting rights within CISPE and are barred from certain decision-making activities. This nuanced structure highlights the complexities within the CSP landscape in Europe.
Ongoing Appeals and the Future of VMware in Europe
The situation has escalated further, with CISPE filing an appeal to the European General Court in July. This appeal aims to annul the European Commission’s approval of Broadcom’s acquisition of VMware, emphasizing the ongoing uncertainty surrounding the future of VMware products in Europe.
As the case continues to unfold, stakeholders in the tech industry are closely monitoring developments, which may have lasting implications for competition within the European cloud services market.
For further reading on this complex issue, you can find the original article here.
Image Credit: arstechnica.com
