Broadcom is suing Siemens for allegedly using thousands of unlicensed VMware products

The big picture: Following its acquisition by Broadcom, VMware has become a focal point of controversy in the tech industry. Now, the virtualization company is hitting back by taking Siemens to court over an alleged massive software license infringement.

Broadcom has filed a lawsuit against the US arm of Siemens AG, accusing the German conglomerate of using "thousands" of VMware products without proper licenses. According to the lawsuit, the two companies had an agreement for a specific number of licenses, but Siemens allegedly overstepped those terms while still demanding full VMware support for its virtualization-based operations.

Siemens AG and its affiliates "downloaded, copied, distributed, and activated a large number of VMware software in excess of the number of licenses they had purchased," Broadcom claimed. VMware and Siemens originally signed a software license and service agreement in 2012, long before Broadcom acquired the virtualization company.

The lawsuit further states that Siemens submitted a list of the VMware products it was using and requested an extension of support for one additional year under the 2012 agreement. However, the list allegedly included multiple products for which Siemens had not acquired proper licenses. As a result, VMware initially attempted to reject the support renewal request.

Siemens AG later confirmed the accuracy of its list and even threatened to sue VMware over the unanswered support request. In response, Broadcom granted a limited support extension but also filed a lawsuit against Siemens, alleging a large-scale software license infringement. VMware is now seeking a jury trial, demanding compensation for damages and even a share of the profits Siemens allegedly gained from using its copyrighted software.

According to the lawsuit, Siemens never provided a credible explanation for the discrepancies in its list of VMware-licensed products. While the German company insisted the list was accurate, VMware claimed the number of licenses and actual usage did not match. Broadcom also criticized Siemens for refusing to run an external script on its systems – an audit that would have allowed VMware to verify the extent of its software usage.

VMware became an integral part of Broadcom's corporate structure in 2023. Under CEO Tan Hock Eng, the company has prioritized high-value clients to maximize revenue, a strategy that appears to be paying off based on its latest quarterly results. Prices are soaring and revenue is climbing, but many VMware customers are growing increasingly frustrated.