BRUSSELS, April 15 (Reuters) - U.S. chipmaker Broadcom ( AVGO )
is being asked by EU antitrust regulators about changes
to newly acquired cloud computing company VMware's licensing
conditions following complaints from a spate of EU business
users and a trade group.
The EU competition enforcer said it had sent requests for
information to Broadcom ( AVGO ) to investigate the issue.
"The (European) Commission has received information
suggesting that Broadcom ( AVGO ) is changing the conditions of VMware's
software licensing and support," a spokesperson said on Monday.
Beltug, a Belgian association of business users, and its
counterparts France's Cigref, CIO platform Nederland and VOICE
Germany last month took their grievances to EU antitrust chief
Margrethe Vestager, EU industry chief Thierry Breton and
Commission President Ursula von der Leyen.
The groups in a joint letter complained about sudden changes
by Broadcom ( AVGO ) in policy and practices which allegedly resulted in
steep price increases, re-bundling of licences, a ban on the
reselling of licences, and a refusal to maintain security
conditions for perpetual licences.
Trade body CISPE, whose members include Amazon ( AMZN ) and
26 small EU cloud providers, has also complained about Broadcom ( AVGO )
allegedly unilaterally cancelling license terms for essential
virtualisation software.
Some of VMware's changes were already in the pipeline even
before its acquisition by Broadcom ( AVGO ), a person with direct
knowledge of the matter told Reuters.
Broadcom ( AVGO ) on Monday announced changes for VMware customers in
a bid to fend off the criticism.
"We have dramatically reduced the price of VCF (VMware Cloud
Foundation) to promote customer adoption," Broadcom ( AVGO ) CEO Hock Tan
said in a blogpost.
"VCF includes all compute, storage, networking, management,
and support capabilities that deliver consistent infrastructure
and operations across clouds, and comes at half the list price
compared to past pricing," he said.
He said Broadcom ( AVGO ) was standardizing the metric for its
pricing across cloud providers to per-core licensing, and will
remove technical barriers to customers moving from on-prem to
cloud, switching their workloads from one cloud provider to
another, or back to on-premise data centers.
On-prem refers to software installed and run on computers on
the premises of companies, versus software installed at a remote
facility such as a server farm or cloud.
VMware will complete its move to a subscription model that
provides access to the most recent version plus support for a
fixed term, a process that started in 2018, but this will not
affect customers' ability to use their existing perpetual
licences, Hock Tan said.