Battling Broadcom: Taking Back Control

When Broadcom acquired CA back in November of 2018, it marked the vendor’s entrance into the software market and observers thought Broadcom would rely heavily on CA’s expertise in this segment. That was before the vendor slashed 40% of CA employees and indicated that they had no plans for improving any companies they acquired.


Eighteen months later, ClearEdge began seeing a steady flow client deals with CA-Broadcom featuring massive cost increases, such as:

  • One client in the energy sector reported an increase of 190% year over year (YoY) for 3 years. CA-Broadcom claimed the customer had enjoyed "a great deal for many years," and now, “this is the offer”. The customer had no choice but to agree to the $40M spend (May 2020).

  • Another client in retail called about a 400% increase YOY for a 3-year deal. When the customer told their CA-Broadcom sales team that they were going to escalate the discussion to their management, the sales rep’s response was “For each level the customer escalates, the cost will go up another 10%” (June 2020).

  • A pharmaceutical customer brought us a renewal with 109% increase YoY. CA-Broadcom gave the customer 10 days to execute the deal and threatened that if they waited two months until their renewal date, “their cost will be 3– 4X higher” (October 2020).

  • An insurance client asked the vendor for a one-year deal as they were moving off their mainframe. CA-Broadcom reps claimed they went all the way up to the CEO, who said the only thing they could offer was a three-year deal which cost 3X their prior run rate (November 2020).

  • Another energy customer who bought CA-Broadcom products one year earlier got a renewal with a 56% YOY increase, which the vendor claimed was a “market correction” (March 2021).

  • Another insurance client needed a two-month extension on their contract term to be completely off all CA-Broadcom products. The vendor’s only offer was a five-year deal at an annual rate 3X higher than their prior rate. The customer resisted, and CA-Broadcom responded by increasing the offer for the five-year term from $16M to $22M (September 2021).

  • A different insurance client was buying a new product and asked to co-term with their ELA. When CA-Broadcom broke down the deal, their rate went up 400%

Broadcom’s strategy is to acquire market leading companies with heavy cash flow and hold their customers hostage. The vendor acquired Symantec in November 2019, and 16 months later:

  • A global banking client saw significant uplifts (82% - 141%). Their overall increase was 110% YOY and they were locked into a 3-year deal (March 2021)

  • Four clients had three-year deals forced on them, even though all of them were pushing for one-year offers

  • Broadcom began combining CA and Symantec spends into one deal, as It’s easier to move off most Symantec solutions than CA solutions. So, when these deals are combined into one contract, customers are forced to move off both supplier solutions – a heavy lift -- to end their financial commitments to Broadcom.


What Can Customers Do?


When vendors behave badly, we urge clients to do two things: align their stakeholders and bring in competition. IT, sourcing, and executive leadership must be on the same page regarding the threat Broadcom is presenting to customers. Meanwhile, IBM and BMC can replace the majority of CA products, and there are many alternatives to Symantec solutions. It takes a couple of years, but it can be worth the effort. We recently worked with a client using this strategy, and achieved the following results:


Case Study


A fortune 100 insurance company spending $5M/year on CA solutions observed this Broadcom behavior and decided to act. The directive came from the top down: the CIO had IBM determine whether they could remove and replace all CA solutions before their CA contract expired. Today, the customer is on track to make a successful transition before their deadline and save money in the process. The customer will realize an immediate ROI from this transition, and now has contractual price protections.

Key takeaways:

  • Initiative driven by the CIO. Because IT stands to bear a lot of pain, executive leadership is necessary.

  • Letting IBM determine if the timing was realistic. Many IT teams claim it would take many years to get off a mainframe solution, but IBM and BMC are highly motivated to get customers off CA. They may be able to make things happen faster than internal teams realize.

  • Customer avoided the price increases from Broadcom, saved money in the process of making the transition, and got better price protections.

To learn more about the best practices in combating Broadcom’s aggressive strategies, watch our on-demand webinar on the subject, or contact your ClearEdge representative.


- Corinne Boyles is a Senior Analyst at ClearEdge Partners.