AT&T sues Broadcom for 'breaking' VMware support extension contract

AT&T has filed a lawsuit against Broadcom, alleging that the company has breached an extended support agreement related to VMware software. The complaint, submitted to the Supreme Court of New York, claims that AT&T holds perpetual licenses for VMware software and had an option to extend support services for two additional years, which it asserts it exercised. However, Broadcom is reportedly refusing to honor this extension unless AT&T agrees to purchase additional subscription services that the telecom giant does not require. AT&T argues that these subscriptions would impose significant costs and obligations, potentially jeopardizing its operations and national security, as many of its servers support critical government functions. The lawsuit accuses Broadcom of attempting to coerce AT&T into paying excessive fees for unwanted services, framing the situation as an act of extortion. Broadcom, on the other hand, has expressed confidence in its legal position, stating that it is transitioning to a subscription model, which it claims is standard in the software industry. The outcome of this legal dispute could have significant implications for both companies, particularly as Broadcom prepares to announce its quarterly results.

- AT&T alleges Broadcom breached a VMware support contract.

- The lawsuit claims Broadcom is coercing AT&T into purchasing unnecessary subscriptions.

- AT&T warns of potential national security risks due to lack of support.

- Broadcom defends its actions as part of a shift to a subscription-based model.

- The case highlights tensions between large telecoms and software providers.