The stare-down between Wall Street and Big Tech just ended in a settlement.
Fidelity Investments has voluntarily dismissed its lawsuit against Broadcom (AVGO) after securing an agreement to maintain uninterrupted access to “business-critical” VMware software. The dispute threatened to cause outages and trading disruptions for Fidelity’s 50 million customers and $17.5 trillion in assets.
🔌 THE DISPUTE (Bundling vs. Contract):
- The History: Since 2005, Fidelity has relied on VMware virtualization software to run its server infrastructure.
- The Trigger: After acquiring VMware in 2023, Broadcom revamped its product lineup, allegedly refusing to renew Fidelity’s existing subscription and insisting on “expensive” product bundles.
- The Threat: Fidelity claimed that without this software, customers would be unable to execute trades and employees would lose access to internal systems.
🛡️ THE RESOLUTION: Ahead of a scheduled injunction hearing, the two giants struck a deal.
- The Outcome: Fidelity confirmed that Broadcom’s services will continue “uninterrupted” with no impact on operations.
- The Implication: While terms weren’t disclosed, the swift settlement suggests Broadcom recognized the risk of a high-profile legal precedent regarding its controversial post-merger pricing strategies.
💡 ANALYST TAKEAWAY: This is the highest-profile clash yet in the “Broadcom vs. The Enterprise” saga. Since the VMware acquisition, CIOs globally have complained about forced bundling and price hikes. Fidelity’s willingness to sue—citing potential systemic failure—shows that for financial giants, software supply chain risk is now an operational resilience issue. Fidelity had the leverage to fight back; the question is, do smaller enterprises?
👇 CIOs & Procurement Leaders: Has the Broadcom/VMware pricing shift forced you to explore alternative hypervisors, or is the migration cost too high?