Tesco Migrates 40,000 Server Workloads Off VMware Citing Broadcom's 'Abusive Conduct'
Tesco, a retail conglomerate based in the United Kingdom, is moving 40,000 server workloads away from VMware. This decision follows allegations of "abusive conduct" by Broadcom, which acquired VMware in November 2023. Tesco claims Broadcom hiked VMware prices by approximately 175 percent and refused to honor previous licensing and support agreements, leading to a lawsuit filed in the UK’s High Court.
Tesco, a retail conglomerate headquartered in the United Kingdom, is in the process of migrating 40,000 server workloads from VMware. The company attributes this move to what it describes as "abusive conduct" by Broadcom, the current owner of VMware.
Legal filings indicate that Tesco has initiated a lawsuit against Broadcom in the UK’s High Court, alleging breach of contract. A September report from The Register detailed claims from the lawsuit, stating that in January 2021, Tesco acquired perpetual licenses for VMware’s vSphere Foundation and Cloud Foundation, alongside a subscription to VMware Tanzu and support services extending until 2026, with an option for a four-year extension.
Following Broadcom's acquisition of VMware in November 2023, Tesco alleges that Broadcom failed to honor the existing agreement. The initial complaint, as reported by The Register, states that Broadcom attempted to compel Tesco to pay “excessive and inflated prices for virtualization software for which Tesco has already paid.” Furthermore, Broadcom allegedly would not permit Tesco to purchase support services for its perpetually licensed software unless the company also acquired “duplicative subscription-based licenses for those same Software products.”
According to Ars Technica, these actions by Broadcom prompted Tesco's decision to shift its substantial server infrastructure.
