Tesco migrates 40k servers off VMware, sues Broadcom £100m

Tesco, one of the United Kingdom's largest supermarket chains, is undertaking a massive migration of approximately 40,000 servers away from VMware software while simultaneously pursuing a £100 million lawsuit against Broadcom, VMware's parent company. The legal action, filed in the UK High Court, accuses Broadcom of breach of contract and abusive conduct following its 2023 acquisition of VMware.

The dispute centers on licensing agreements Tesco signed in 2021, which granted the retailer perpetual licenses for VMware products and support services until January 2026, with an option to renew until 2030. Following the acquisition, Broadcom shifted VMware to a subscription-only model and ceased providing support for existing perpetual licenses. According to court filings, this forced Tesco into new, bundled subscription offers at dramatically higher prices. The company stated that a post-acquisition offer from Broadcom for VMware Cloud Foundation and CA Technologies mainframe software was approximately 175 percent more expensive than its previous agreement, with the mainframe software component priced over 350 percent higher.

Faced with what it describes as Broadcom's "abusive...