AT&T, VMware Reach ‘Settlement in Principle’ in High-Profile Case

AT&T and VMware have reached a “settlement in principle” in the high-profile lawsuit the telco filed in August against the cloud software maker.

A “settlement in principle” means all parties involved in litigation have agreed to terms but have not yet signed anything legally binding. The development indicates that AT&T and VMware (and Broadcom, which just passed the year mark as VMware's owner) may be on the verge of wrapping up what promised to turn into a protracted, expensive court battle.

Late last week, the attorneys for both AT&T and VMware told the New York Supreme Court, where the case is being handled, that they have found a way to conclude matters. They did not provide details. Rather, they asked Judge Jennifer G. Schecter to extend the deadline for submitting a procedural letter that would have addressed AT&T’s request for a preliminary injunction against VMware. The lawyers requested a new deadline of Dec. 13, and Schecter has agreed.

Channel Futures reached out to both AT&T and VMware for comment. AT&T has declined to provide a statement and VMware has yet to respond to our inquiry.

'Bullying,' 'Sensationalism:' How the AT&T-VMware Case Came About

Meanwhile, Schecter already imposed a temporary restraining order in the AT&T-VMware case. That motion has kept VMware’s support services intact within the telco, the initial point of contention that led AT&T to sue VMware. The telco maintained that Broadcom sought to breach its VMware contracts by prematurely imposing subscription licensing requirements; AT&T has said its perpetual licenses were not set to end for some time and that Broadcom tried to change that and raise its prices by 1,050%, a move it has equated to “bullying.”

Related:AT&T Sues Broadcom Over VMware Contracts ‘Bullying’

AT&T further asserted that losing VMware’s support within its environment would cost the company hundreds of millions of dollars and put first responders, other critical government services and national security at risk. 

VMware by Broadcom has hit back by accusing AT&T of “sensationalism.” The virtualization provider has said AT&T failed to do its due diligence in renewing its support services when it had the chance and resorted to a “parade of horribles” in court to protect itself.

The AT&T and VMware case cropped up less than a year after Broadcom closed its $61 billion purchase of the legacy software maker. The acquisition has caused substantial upheaval within the cloud sector. Check out Channel Futures’ complete timeline of the Broadcom-VMware saga.