Video article – April 2025
Video transcript – VMware (Broadcom) vs Siemens lawsuit
Hi everyone. Craig Guarente, Palisade Compliance.
And today we’re going to talk about something that’s a little different.
We’re not going to talk about Oracle. Rather, we’re going to talk about this lawsuit that was just filed between VMware (Broadcom), and Siemens.
It’s fascinating. We’re going to dive into the details here.
If you’re into the world of software asset management, copyright infringement, how to deal with aggressive vendors, this is a textbook case study, but it’s only chapter one, right? We only have the filing that Broadcom submitted. We have to wait to see what Siemens says.
So let’s look at the lawsuit.
So here it is, the actual lawsuit filed by VMware against Siemens.
So for those of you who’ve never read a lawsuit, we’re going to go through this relatively quickly, but there’s a lot of good stuff in here.
First of all, you could see it was filed in Federal Court, and you can see VMware is the plaintiff. Siemens is the defendant. It’s a civil action.
Basically, the plaintiff says, you’ve done me wrong and we want you to stop doing it, and we want money, and they want a jury trial.
The highlights are the first couple of pages here.
Now, I’ve done a little bit of highlighting for us, but basically it seems – according to VMware, what happened was Siemens wanted to purchase technical support from VMware, and they sent VMware a letter and it said, here’s all the products that we want support on.
So they sent that letter. I think that was called the September 9th list.
So on September 9th last year, they sent this list.
Now by the way, there’s something more going on here because you don’t go from sending an email or a list on September 9th, 2024 to a lawsuit in March of 2025.
So there’s something that’s not being said in here. There’s something that happened. I have no idea what it is. I am just guessing. But man, that’s fast to file a lawsuit.
So anyway, Siemens gives VMware this list of all the products. And VMware says, you know what? They obviously took time to create this list. Because you’re not just going to give a vendor a list. Because if you tell the vendor you’re using stuff that you aren’t licensed for, you’re basically screwed. So we’re going to assume the list was correct.
And then VMware said they went back to Siemens and said, what’s up with this list? There’s so much more on here. We do not have records of you acquiring and purchasing all this stuff.
And Siemens says, the list is right, you need to support us.
And VMware asks them, where’d you get these records from?
And Siemens, according to VMware, basically threatened VMware and said, if you don’t support us, we’re going to sue you. And actually had outside counsel, according to VMware, send a letter.
So VMware, I guess, being the good corporate citizen, they claim – said, you know what, we’re just going to provide the support to Siemens and all is good.
But VMware wanted Siemens to show them how they acquired these licenses. So they wanted to do an audit. And Siemens said no.
And then at some point Siemens said, you know what – that list we gave you on September 9th, that was wrong. Here’s a second list.
And lo and behold, the second list that Siemens sent VMware matched what VMware had as their records.
Now VMware is very suspicious again. Now, I guess this is when they wanted to do the audit. They wanted to confirm, why the discrepancies between the lists.
And according to VMware, Siemens wouldn’t respond or wouldn’t cooperate with an audit and never gave a justification as to why the one list on September 9th, and then the second smaller list of products in use, subsequently.
So they couldn’t reach an agreement, they couldn’t figure this out, and that is this lawsuit.
So VMware is basically saying, they told us they were using stuff, they never gave us a reason why we should believe they’re not using it. They won’t respond to this audit. So that is why we are suing.
So it’s really interesting.
One of the things I took from this, in addition to the speed, is VMware claims that in order to use the software – for accessing and downloading the software products and license keys – I’ll just read it, customers like Siemens must use VMware’s customer support portal. And to do so, the customer must register and create a customer account that references its license agreements and establishes its entitlement to download and use copies of the VMware product.
So in this case, Siemens had to log into the portal. But what responsibility does a vendor have, right?
If VMware is saying right here that you need to log in and establish that you have these licenses, doesn’t VMware have some responsibility to say whoa, you don’t have licenses for this stuff, we’re not going to let you download it?
I don’t know. So, what do you guys think?
What’s the result that VMware wants? Well, they want three things. Basically, they want Siemens to stop doing what they’re doing and stop using the software that they don’t have licenses for. They want damages, in terms of actual damages that VMware suffered. So if Siemens had purchased these licenses, they would’ve given VMware money for them. So they want that money. And then they also want Siemens’ profits. Any profits that are attributable to the use of the software.
I’m not sure how you would calculate the fact that you can virtualize and how much – you know, I guess there’s some money that you would save – obviously on infrastructure because you’re using the VMware products. That’d be a really tough one. Interesting. Get some experts out there to talk about how much VMware software contributed to the profitability of Siemens.
And then if you go a little further down here, they want interest.
So they want Siemens to stop doing it. They want actual damages. They want their profit, they want pre-judgment and post-judgment interest put against Siemens.
So, I don’t know – a hundred million dollars, $500 million dollars, a billion dollars. Who knows? We never get that number here. But again, this is just the first filing.
And then if you really want to get into the legal gibber jabber, here are the actual causes at the end.
So, copyright infringement – boom. It’s not a contractual issue here. It’s not saying, hey, you said you were going to do this and you did this, but it’s literally copyright infringement, which offers different penalties. And then it’s contributory copyright infringement. And then we’re going to triple down here and say vicarious copyright infringement, copyright infringement, copyright infringement, copyright infringement, all different kinds of forms of that.
So, we’re going to wait to see what Siemens says and how they respond. And once they do, we will report on that.
So, stay in compliance folks!
More content on VMware
Read our article, Licensing Oracle on VMware in 2025.
And, oh, one other thing: if Siemens had been working with us on this – with Palisade Compliance, they probably wouldn’t be – they definitely wouldn’t be in this situation. I know, I know. But I guess, maybe – better late than never, give us a call.
