Broadcom Sparks Anger Among European Cloud Providers

Is Broadcom abusing VMware’s dominant position in the virtualization market to “take the sector hostage”?

That is how CISPE (Cloud Infrastructure Services Providers in Europe) described it about a year ago. In recent months, the professional association has been monitoring the group’s practices within a European observatory, which also oversees Microsoft’s cloud competition commitments.

As for Microsoft, the balance isn’t there yet, but the situation is “not yet critical,” according to the observatory, which brings together CISPE members, as well as Cigref and its Belgian counterpart as “observers.”

That cannot be said for Broadcom: indicators are red.

Des jugements provisoires prononcés en France

To date, no European competition authority has opened an investigation or taken formal action against Broadcom, notes the observatory. The European Commission has, however, requested information from the ecosystem. As for CISPE, it has recently requested a meeting with DG COMP for an update on the situation.

Procedures have been initiated at commercial courts. Notably in France, where injunction rulings have been issued. CISPE members have also voiced their grievances to Italian authorities. Generally, these actions aim to preserve existing licensing terms… while awaiting negotiations of new, “fairer” terms. Or to obtain a delay to migrate toward alternative solutions.

In the context of these disputes, Broadcom has resorted to delaying tactics that have, so far, allowed it to stall on the merits, laments the CISPE. It adds that in most cases, the parties involved did not dare to pursue court action for fear of retaliation. Moreover, the pressure exerted by Broadcom would not be limited to VMware licenses (it would also extend, notably, to mainframe software).

In this context, the observatory is calling for a “formal investigation” into the practices of the American group.