- Fidelity and Broadcom reached a settlement that preserves Fidelity’s access to essential virtualisation software after months of legal wrangling.
- The case highlights risks associated with vendor control over crucial IT infrastructure and raises questions about software dependency in critical sectors.
What happened: Fidelity and Broadcom reach settlement
Fidelity Investments, the Boston-based asset manager overseeing around 50 million customers and US $17.5 trillion in assets, said it has settled a lawsuit accusing Broadcom of threatening to cut off access to software crucial to its systems. The dispute was resolved before a Massachusetts state court hearing scheduled for late January 2026, with Broadcom agreeing to continue providing the software to a Fidelity subsidiary.
The lawsuit, initially filed in November 2025, stemmed from Fidelity’s reliance on virtualisation software sold by VMware, which it has used since 2005 to create, host and manage virtual servers on its physical infrastructure. The software had become central to Fidelity’s IT operations. Broadcom acquired VMware in 2023 and restructured the product line into bundled offerings that Fidelity described as “expensive”. Fidelity alleged that Broadcom refused to honour its right to renew the subscription under existing terms and insisted on a larger, more costly bundle.
Fidelity said that loss of access could have caused widespread outages, prevented customers from accessing accounts or executing trades, and disrupted internal systems. The voluntary dismissal of the lawsuit follows Broadcom’s agreement to continue providing the software uninterrupted. Broadcom did not immediately comment on the settlement.
Also Read: https://btw.media/all/tech-trends/it-infrastructure/how-vendor-lock-in-shapes-it-strategy/
Why it’s important: vendor dependency and infrastructure risk
The settlement underscores a broader technology governance and risk-management issue: the degree to which large organisations depend on a small set of third-party software providers for mission-critical systems. When a vendor holds effective control over infrastructure that underpins business continuity, strategic leverage — whether through pricing, bundling or contract terms — can create systemic risk for users. Industry commentators have described the Fidelity-Broadcom dispute as a “wake-up call” for IT leaders to reconsider vendor lock-in and access risk, particularly in sectors where outages can have wide-ranging effects.
This dispute also reflects growing tensions in the IT market following consolidation. Broadcom’s acquisition of VMware combined popular enterprise software under one roof, triggering questions about competitive dynamics, pricing power and customer contracts. For large users such as financial institutions, migrating away from entrenched platforms can be a multiyear, expensive process with significant operational risk.
While the settlement averts immediate disruption for Fidelity, it leaves unresolved the broader issue of how organisations should mitigate dependencies on essential software providers, particularly when negotiating renewal terms. Such considerations are especially salient for firms managing critical infrastructure and real-time systems where downtime is not acceptable.
Also Read: https://btw.media/all/tech-trends/ai/enterprise-dependency-on-proprietary-platforms/
