'Death sentence': EU cloud lobby takes Broadcom to Brussels over VMware partner purge
CISPE files antitrust complaint, demands interim measures to stop what it calls chip giant's 'ongoing abuse'
A lobbying trade body for smaller cloud providers is asking the European Commission to impose interim measures blocking Broadcom from terminating the VMware Cloud Service Provider program, calling the decision a death sentence for some tech suppliers and an illegal squeeze on customer choice.
As The Reg revealed in January, Broadcom shuttered the scheme, a move sources claimed affects hundreds of CSPs across Europe and curtails options for enterprises buying VMware software and services.
The Cloud Infrastructure Service Provider in Europe (CISPE) trade group, representing nearly 50 tech suppliers, filed the complaint today with the EC Directorates-General, accusing Broadcom of bully-boy tactics, and calling for authorities to halt what it terms as “ongoing abuse.”
Francisco Mingorance, CISPE secretary general, said of the complaint: “Businesses – both cloud providers and their customers – are being irreparably damaged by Broadcom’s unfair actions, which we believe are illegal.
“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. The only way to stop bullies is to stand up to them.”
CISPE claims that, since Broadcom completed its $69 billion takeover of VMware in October 2023, prices have risen tenfold, payment is demanded upfront, products are bundled regardless of customer need, and minimum commitments are based on potential rather than actual consumption.
The VMware Cloud Service Provider (VCSP) program officially closed in January and all transactions must be complete by March 31. After that date, only a select group of suppliers will be able to sell VMware subscriptions - either standalone or as part of a broader service. Across Europe, we’re told this equates to hundreds of businesses losing their authorization.
For some, the loss of VCSP status effectively destroys their market. Those whose operations were built around VMware must now hand customers to another authorized supplier or begin the costly migration to an alternative platform.
"Broadcom strongly disagrees with the allegations by CISPE, an organisation funded by hyperscalers, which misrepresent the realities of the market," a Broadcom spokesperson told The Register. "We continue to be committed to investing significantly in our European VMware Cloud Service Provider partners (VCSPs) helping them offer alternatives to the hyperscalers and meet the evolving needs of European businesses and organisations."
A spokesperson for the European Commission, told us: "We have received a complaint alleging that Broadcom's licensing of VMware products to cloud service providers infringes EU antitrust rules.
"We are currently assessing this complaint in line with our standard procedures."
In the UK, around nine cloud service providers remain in VMware’s plans, among them Redcentric, ANS, Vodafone, Softcat, Caranet and Node 4. The cull is global: in the US, only 19 providers are said to remain from a pool of thousands.
“This isn't partner management, it's market control,” one CSP told us in January. “A forced consolidation that sidelines long-standing European partners in favor of a much narrower and more limiting ecosystem. Broadcom is deliberately shrinking the choice for customers who will end up paying the price through higher costs, less data sovereignty, compliance concerns, and ultimately reduced choice."
CISPE is no stranger to competition complaints. The group previously filed one against Microsoft and is separately seeking an annulment of the EC’s decision to clear Broadcom’s purchase of VMware. ®