Tesco moving 40,000 server workloads off VMware amid Broadcom’s “abusive conduct”

Tesco, the UK-based retail giant, is actively transitioning away from VMware, with plans to shift 40,000 server workloads due to what it describes as Broadcom's "abusive conduct." This move follows legal actions filed last year in the UK High Court, where Tesco accused Broadcom of breaching their contract. In a September report by The Register, it was revealed that Tesco had purchased perpetual licenses for VMware’s vSphere Foundation and Cloud Foundation, along with a subscription for VMware Tanzu and support services extending until 2026, with an option for a four-year extension. However, after Broadcom acquired VMware in November 2023, the terms of this agreement were allegedly disregarded. Tesco claims that Broadcom attempted to impose excessive fees for virtualization software, despite Tesco having already settled payments for these services. The situation escalated when Broadcom reportedly ceased support for Tesco's VMware products in January, compelling Tesco to seek third-party support instead. Initial filings indicated that Broadcom's refusal to provide software upgrades and essential security updates unless customers held active subscriptions further complicated matters for Tesco. In light of Broadcom's actions, Tesco's recent court filings expressed significant concerns about the risks posed by the accelerated migration to alternative virtualization solutions. The retailer stated that it has incurred substantial costs in procuring these alternatives, which offer diminished functionality. Tesco anticipates completing the transition from VMware by the end of 2027 at the earliest, although the rapid pace of this migration introduces considerable operational and commercial challenges, along with ongoing costs and disruptions to its business.