Tesco is shifting 40,000 servers from VMware and is taking legal action against Broadcom for more than GBP 100 million.
**TL;DR** Tesco is transitioning 40,000 servers away from VMware and suing Broadcom for over GBP 100 million, alleging a 175% price increase and the termination of perpetual license support.
Tesco, one of the largest grocery retailers in the UK, is moving around 40,000 servers from VMware. Additionally, it has filed a lawsuit against Broadcom in the UK High Court for more than GBP 100 million, claiming “abusive conduct.” This is among the largest publicly reported migrations from VMware since Broadcom acquired the company in late 2023.
In 2021, Tesco bought perpetual VMware licenses that included support and software updates until 2026, along with an option to extend for an additional four years. Following Broadcom's takeover, Tesco alleges it experienced price increases of about 175% and was compelled to adopt pricier subscription bundles. Broadcom is reported to have refused to provide continued standalone support for the perpetual licenses previously purchased by Tesco.
The legal filing states, “Confronted with Broadcom’s abusive conduct, and acknowledging the importance of virtualization and mainframe software and services to its operations, Tesco has had to incur significant costs to find alternative solutions with diminished functionality.” During the migration process, Tesco has enlisted third-party support providers to help maintain its VMware setup.
Tesco is not postponing its migration until the court case concludes; it aims to finish the transition by the end of 2027 and has opted to act now rather than rely on a judicial outcome. The choice to migrate 40,000 servers while simultaneously pursuing legal action indicates the serious deterioration of their relationship.
This situation aligns with HPE's announcement this week of offering customers a free year’s license for its Morpheus VM Essentials alternative, along with a $1 license for its Zerto migration software. The migration away from VMware is creating a demand for alternatives that didn’t exist two years ago.
Broadcom's CEO, Hock Tan, mentioned earlier this month that the company is pulling back from acquisitions as AI revenue is growing sufficiently on its own. The VMware acquisition was the last significant deal in this strategy. For the customers affected, the narrative of growth appears quite different. Tesco is spending unplanned funds to replace software it already owned due to a change in terms by the new owner.
The implications of this case extend beyond Tesco. Numerous enterprises worldwide are experiencing similar pricing pressures due to Broadcom’s changes in VMware licensing after the acquisition. If Tesco succeeds with its “abusive conduct” claim, it could set a legal precedent that limits how acquiring companies can modify the licensing terms of products already paid for by customers. Conversely, a loss would confirm what many suspect: perpetual licenses are only as enduring as the company behind them.
Other articles
NASA selects Eric Schmidt's Relativity Space for Mars missions.
NASA has selected Eric Schmidt's Relativity Space for a Mars orbiter mission scheduled for 2028. However, there is a twist: the company has yet to achieve orbit, and the mission includes a data center for Mars orbit.
MIT developed a memory system enabling robots to recall the location of your keys.
MIT's DAAAM framework enables robots to possess long-term spatial memory by associating language descriptions with 3D maps. When you ask, "where's my wallet?", it searches through its memory.
'FortiBleed': Credentials of 75,000 Fortinet firewalls compromised
A vulnerability known as FortiBleed revealed unencrypted credentials for approximately 75,000 Fortinet firewalls in 194 countries, affecting companies such as Samsung, Oracle, and Siemens. Here’s how it occurred.
MIT has developed a memory system that enables robots to recall the location of your keys.
MIT's DAAAM framework enables robots to have long-term spatial memory by linking language descriptions to 3D maps. When you ask, "Where's my wallet?" it can search through its memory for the answer.
NeuralTrust secures $20 million to protect enterprise AI agents.
Barcelona's NeuralTrust secured $20 million in seed funding to manage enterprise 'agent sprawl' and to offer European banks and governments a security alternative that is not American.
Midjourney's full-body scanner: significant promises, no proven history.
Midjourney has introduced a full-body ultrasound scanner, which its founder claims surpasses MRI technology. Additionally, the company has launched a Midjourney Medical division and a spa. However, the medical assertions have not been verified.
Tesco is shifting 40,000 servers from VMware and is taking legal action against Broadcom for more than GBP 100 million.
Tesco reports that Broadcom raised VMware prices by 175% and eliminated support for perpetual licenses. The company is transitioning 40,000 servers and is taking legal action for "abusive conduct."