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AT&T and Broadcom did settle their VMware support dispute. The companies reported a settlement-in-principle in November 2024, then told a New York court on December 13, 2024, that they had settled and intended to file a stipulation of discontinuance. The commercial terms were not made public. The case therefore ended without a public ruling deciding whether Broadcom could discontinue support in the face of AT&T’s claimed contractual renewal rights.
Why AT&T sued Broadcom
AT&T Services filed suit against Broadcom Inc. and VMware, Inc. on August 29, 2024, in New York Supreme Court, New York County (index no. 654490/2024). The complaint followed Broadcom’s November 2023 acquisition of VMware, a transaction valued at about $61 billion, and VMware’s shift away from selling perpetual licenses toward subscription-based offerings. The complaint and court record describe AT&T’s contractual claims.
AT&T said it had perpetual VMware licenses and pre-acquisition agreements giving it the right to renew support. It alleged that Broadcom sought to stop supporting those arrangements unless AT&T moved to newer, bundled offerings. According to AT&T’s filings, the affected estate comprised about 75,000 virtual machines across roughly 8,600 hosts or servers, and the proposed change could raise its costs by approximately 1,050%. Those figures and the alleged cost increase were AT&T’s claims, not findings after a trial.
The dispute was about more than the price of a new subscription. It raised a contract question: could a successor supplier rely on changes to its product catalog to end a support-renewal arrangement that a customer said it had negotiated earlier? Answering that required interpreting the specific agreements, renewal language, product definitions, and any applicable end-of-availability provisions.
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What each side argued
AT&T’s position: Broadcom had acquired VMware subject to existing contractual commitments, and AT&T said those commitments included the ability to renew support for its perpetual licenses. AT&T sought court relief to preserve service while the dispute was pending.
Broadcom’s reported position: The relevant products or services had been changed or discontinued as VMware moved to a new commercial model, so the old support offering was no longer available in the same form. Broadcom also disputed AT&T’s interpretation of the agreements and its claimed damages, and argued that AT&T had not properly renewed or audited relevant deployments. Coverage of the court proceedings describes those arguments. They were defenses, not a public judicial determination that Broadcom was right.
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A perpetual license and a support entitlement are not the same thing. A perpetual license generally concerns the right to use the licensed software indefinitely; it does not automatically promise indefinite access to technical assistance, patches, upgrades, or maintenance. The question in a dispute like this is what the contract says about support renewal, pricing, covered products and versions, vendor discontinuation, and the relationship between a master agreement and later order forms. AT&T and Broadcom did not obtain a public merits ruling settling those questions for this contract.
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The court proceedings and settlement timeline
- November 2023: Broadcom completed its acquisition of VMware.
- August 29, 2024: AT&T filed its lawsuit in New York County.
- October 2024: The court issued interim relief requiring support to continue while the case proceeded. The measure protected the status quo during litigation; it was not a final ruling that AT&T’s contract interpretation was correct. The judge pressed the parties to find a practical resolution.
- October 11, 2024: The parties reportedly said settlement discussions had advanced and then broken down.
- November 21–22, 2024: Lawyers told the court that the parties had reached a settlement-in-principle and asked for time to put it in writing. That was not yet the final public settlement update.
- December 13, 2024: Counsel told the court the action had been settled and that the parties intended to submit a stipulation of discontinuance. The settlement report and coverage of the court communication reported no public commercial terms.
What the settlement did—and did not—reveal
The public reporting establishes that the parties settled the action; it does not establish what either side received. The settlement amount, support duration, product coverage, renewal pricing, migration assistance, any admission of liability, and AT&T’s ultimate VMware entitlements were not publicly disclosed in the available reporting.
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AT&T’s counsel reportedly said the company planned to migrate away from VMware. That does not establish that AT&T completed the migration, when it happened, what platform replaced VMware, or whether the settlement changed the plan. A stated intention to transition should not be mistaken for a confirmed outcome.
Nor does settlement mean AT&T won—or that Broadcom’s interpretation prevailed. The case ended without a public merits judgment that resolved the contract dispute. The interim support order was temporary relief during the litigation, not a final determination of liability.
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What other VMware customers can take from the case
The practical lesson is to read your own contract, not assume AT&T’s outcome applies to every customer. Renewal rights and support obligations depend on the particular agreements, products, orders, and facts. A customer reviewing exposure should check:
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- Whether the option covers support only, licenses as well, or specified products and versions.
- How renewal pricing is set: fixed, capped, or subject to a new quote.
- Whether later order forms amend or conflict with the master agreement.
- What the agreement says about product end-of-availability, end-of-support, and replacement offerings.
- Any audit, deployment-reporting, or usage-compliance duties.
- Assignment and successor-obligation provisions, along with governing-law, arbitration, and injunctive-relief clauses.
Customers should also weigh the operational choices. Negotiating a transition may avoid litigation but can mean higher near-term costs. Moving away can reduce exposure to future renewal or pricing changes, but requires application and dependency discovery, compatibility testing, changes to storage, networking, backup and disaster recovery, staff training, and carefully planned cutovers. A subscription conversion may preserve continuity and provide current offerings while changing cost structure and procurement terms. Litigation can preserve service temporarily and improve leverage, but it is costly, slow, and dependent on the customer’s own contract and evidence.
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Did the case set a precedent?
No binding judicial precedent came from a confidential settlement. The case may have signaled to large customers that litigation and interim relief can create negotiating leverage, but commercial signaling is not a legal rule that Broadcom must continue legacy support for all VMware customers.
Later litigation can be relevant without controlling this case. In 2026, a New York appellate court upheld preliminary relief in a separate T-Mobile dispute involving VMware support while arbitration proceeded. That ruling involved different agreements, facts, and procedural circumstances; it does not decide AT&T’s contract or establish a universal right for VMware customers.
The broader issue remains important: software vendors may reorganize products and pricing after an acquisition, while customers may have negotiated rights under older agreements. Whether those commitments survive a product change depends on the contract and applicable law—not simply on whether a license is described as perpetual or whether the vendor has changed its catalog.
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