⚠ Every Price Hike Funds a MigrationModerate threat

The stickiness of Broadcom's software rests on switching costs being higher than the cost of staying, and Broadcom's own aggressive pricing works steadily to reverse that inequality. Each large increase on VMware or CA customers raises the reward for undertaking the painful migration off the platform, and enough customers, pushed hard enough, will conclude that the disruption of leaving is finally worth it. The company is, in effect, subsidizing its customers' motivation to escape.

The danger is sharpest where genuine alternatives have matured. VMware customers can, with effort, move workloads to public cloud, to open-source virtualization like KVM and Proxmox¹, or to rival platforms — options weaker a decade ago and stronger now. When Broadcom raises prices sharply, it does not just extract more from captive customers; it hands the alternatives a compelling sales pitch and finances the internal projects that make switching possible. The squeeze that lifts this year's revenue can seed next year's defections.

Broadcom is betting that most customers will grumble and pay, because migration is genuinely hard and the largest enterprises value stability over savings — and so far the software revenue has grown, suggesting the bet is holding. But an owner should watch renewal rates and customer sentiment closely, because a strategy of raising prices on captive customers works only until the switching cost is exceeded, and Broadcom is deliberately, repeatedly testing exactly where that line lies.