Supermarket giant Tesco sues VMware, warns lack of support could disrupt food supply
- Reference: 1756883846
- News link: https://www.theregister.co.uk/2025/09/03/tesco_sues_vmware_broadcom_computacenter/
- Source link:
Court documents seen by The Register assert that in January 2021 Tesco acquired perpetual licenses for VMware’s vSphere Foundation and Cloud Foundation products, plus subscriptions to Virtzilla’s Tanzu products, and agreed a contract for support services and software upgrades that run until 2026. Tesco claims VMware also agreed to give it an option to extend support services for an additional four years.
VMware is essential for the operations of Tesco’s business and its ability to supply groceries
All of this happened before Broadcom acquired VMware and stopped selling support services for software sold under perpetual licenses. Broadcom does sell support to those who sign for its new software subscriptions.
The supermarket giant says Broadcom's subscriptions mean it must pay “excessive and inflated prices for virtualisation software for which Tesco has already paid,” and “is unable any longer to purchase stand-alone Virtualisation Support Services for its Perpetually Licensed Software without also having to purchase duplicative subscription-based licenses for those same Software products which it already owns.”
The complaint also alleges that Tesco’s contracts with VMware include eligibility for software upgrades, but that Broadcom won’t let the retailer update its perpetual licenses to cover the new [1]Cloud Foundation 9 .
[2]Defiant Broadcom calls for tech to go back where it belongs: On-premises
[3]We all live in a virtual machine, a virtual machine, a virtual machine
[4]VMware: The private cloud's main purpose is now keeping developers happy
[5]VMware before Broadcom was 'a unicorn in fluffy cloudland'
The filing names Computacenter as a co-defendant as it was the reseller that Tesco relied on for software licenses, and the retailer feels it’s breached contracts to supply software at a fixed price.
Tesco’s filing also mentions Broadcom’s patch publication policy, which means users who don’t acquire subscriptions can’t receive all security updates and don’t receive other fixes. The retailer thinks its contracts mean it is entitled to those updates.
[6]
The filing suggests that lack of support is not just a legal matter, but may have wider implications because VMware software, and support for it “are essential for the operations and resilience of Tesco’s business and its ability to supply groceries to consumers across the UK and Republic of Ireland.”
[7]
[8]
“VMware Virtualisation Software underpins the servers and data systems that enable Tesco’s stores and operations to function, hosting approximately 40,000 server workloads and connecting to, by way of illustration, tills in Tesco stores,” the filing states.
Tesco’s filing warns that Broadcom, VMware, and Computacenter are each liable for at least £100 million ($134 million) damages, plus interest, and that the longer the dispute persists the higher damages will climb.
A familiar dispute
Tesco is not the first organization to sue Broadcom for not extending its support contracts for software acquired under perpetual licenses. US telco AT&T [9]made a very similar complaint in September 2024. A dispute between Broadcom and [10]Siemens covers similar issues. The Register understands several other lawsuits touch on the same issue.
Companies the size of Tesco, which posted £69.9 billion ($93.5 billion) revenue in 2025 can comfortably afford to run lawsuits when negotiations don’t go their way and use the prospect of protracted and pricey proceedings as leverage to reset talks. The Register mentions such tactics as Tesco’s filings reveal its operations are dependent on VMware, and a 2019 [11]VMware case study reveals the retailer has used Cloud Foundation for years. Given Tesco has used VMware for so long, replacing it would likely be a more costly and risky endeavor than a lawsuit.
[12]
If Broadcom has budged when confronted with such suits, The Register ’s virtualization desk hasn’t heard about it. In public, Broadcom insists that Cloud Foundation is such a good private cloud stack that it quickly pays for itself, that its subscriptions are therefore good value, and that sticking with perpetual licenses for old software is a fool’s errand.
The chips-and-code company also points to strong adoption of Cloud Foundation among its largest customers, and increased revenue from VMware since it took over the company.
Vendors of rival private cloud products [13]report strong interest from VMware customers who intend to migrate to an alternative private cloud platform, and point to record numbers of new clients – 2,700 for Nutanix alone over the last year. But The Register expects Tesco and Broadcom will work this out, probably in private, dammit. ®
Get our [14]Tech Resources
[1] https://www.theregister.com/2025/06/17/vmware_cloud_foundation_9_released/
[2] https://www.theregister.com/2025/08/26/vmware_explore_vcf_evolution/
[3] https://www.theregister.com/2025/08/27/vmware_submarine_software_licenses/
[4] https://www.theregister.com/2025/08/27/vmware_private_clouds/
[5] https://www.theregister.com/2025/08/25/yves_sandfort_comdivision_vmware_interview/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aLgRtqRR5ifQvEwfL4XhKgAAAEE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aLgRtqRR5ifQvEwfL4XhKgAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aLgRtqRR5ifQvEwfL4XhKgAAAEE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/10/01/att_broadcom_filings_update/
[10] https://www.theregister.com/2025/06/16/vmware_vs_siemens/
[11] https://blogs.vmware.com/emea-en/2019/08/cloud-and-security-insights-from-tesco/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/virtualization&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aLgRtqRR5ifQvEwfL4XhKgAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2025/08/28/nutanix_q4_2025/
[14] https://whitepapers.theregister.com/
Re: Popcorn time
The main winners will be the lawyers!
Re: Popcorn time
Yep and customers will pay the costs.
Predator vs. Predator
Whoever wins, we lose.
Re: Popcorn time
Let me guess, Broadcom told Tesco they'd get a better deal if they signed up for their loyalty card- let's call it 'Clubcard' for the sake of satire- and Tesco complained that Broadcom was making the 'regular' deal deliberately uncompetitive in order to force people to sign up for Clubcard to get the competitive deal/offer they'd previously have been given regardless?
Well, that's okay then.
>> Broadcom insists that Cloud Foundation is such a good private cloud stack that it quickly pays for itself, that its subscriptions are therefore good value, and that sticking with perpetual licenses for old software is a fool’s errand.
Well, that's okay then. Just unilaterally declare contractual obligations defunct, redefine "perpetual" and call your customers "fools".
Seems like a broad con to me. (Sorry, couldn't help it.)
Well done Tesco, every little helps after all.
Re: Well, that's okay then.
Perpetual licence, right up until they work out people expect the licence to be perpetual and it doesn't contribute to the revenue stream
Re: Well, that's okay then.
That's what paid support and/or paid upgrades are for. The vendors want subscriptions to make their revenue stream more even and predictable, rather than the client hanging on to legacy versions until they are forced to upgrade because of end-of-life happens. Or happened and they ignored it as long as they could (or much longer than they should have, which accounts for a good chunk of my job lately). Whether that's at all attractive to Tesco is a bit moot. I still can't see why Broadcom isn't automatically forced to honour the existing VMware contracts, it's not like VMware was bankrupt when it was acquired
Re: [..] why Broadcom isn't automatically forced to honour the existing VMware contracts
Exactly that.
You buy a company, you buy its obligations.
Personally I'm surprised that it took this long for someone to drag Broadcom to court.
This should be a class-action issue.
Re: [..] why Broadcom isn't automatically forced to honour the existing VMware contracts
Doesn't the likelihood of a class action- traditionally a yank thing- depend on the jurisdiction and nature of the entities involved?
If it's UK and/or English law (Tesco being based there) I don't think class actions are as widespread a thing- although IIRC there have been a few in recent years- and I'm not sure whether they apply in business-to-business contracts in the same way?
Hey, Tesco, do Oracle and SAP next.
I'm not a customer of any of them, I just think they need to be taken down a peg or two and Tesco has the oomph to be able to do that.
Oracle and SAP next.
Great idea! Throw in Salesforce and you've got a deal!
(Wait, what just happened?!)
What happens if it goes pineapple shaped, will the gammon be upset?
The lawyers will get the biggest pizza the action.
It's difficult to know who to root for here. The choice between wanting Tesco to win or VMware/Broadcom is very much like choosing which arm you'd like to have severed from your body.
As bad as Broadcom have been, Tesco are abhorrent bastards as well. In a time when the cost of food and various things have skyrocketed, somehow Tesco managed to record a £2.3 billion profit in 2024 which was already up from the ~£800 million the year before. And that's before taking COVID in to account.
So fuck the both of them, I hope the lawyers take both of them for every penny they have arguing the toss about it.
"In a time when the cost of food and various things have skyrocketed, somehow Tesco managed to record a £2.3 billion profit in 2024 which was already up from the ~£800 million the year before. And that's before taking COVID in to account."
That's because Tesco is a very large company. Its total revenue is closing on £70bn, so you are looking at a 3% profit margin. Broadcom on the other hand took in around $50bn (so much less than Tesco) and had a profit of $13bn (so much more than Tesco).
Hate Broadcom, not Tesco.
Posting anon for a little professional discretion, but the retail superstores (i.e. not just Tesco) are not saints either. They all are notorious for stripping down their farm/frozen/ambient suppliers to tiniest of margins, and that attitude extends to companies providing other professional services like IT. If Tesco and Broadcom both get bruised in the fight, I won't cry to excess.
Exactly this. A friend who worked for Tesco told tales of suppliers leaving meetings in tears after contract renewal talks that would have seen them operating at a loss after supplying Tesco for many years on slim but sustainable margins. "So you can't grow potatoes for this price? Fuck you, I've got a new supplier who can".
We're adults here, aren't we? We can do shades of grey, can't we? Rather than labelling a company as either "goody" or "baddy"?
So it's okay to say Tesco are bastards. But, in this fight, Broadcom are the bigger bastards. And so I'd be happy to see Tesco take them down a peg. (Also, Tescos are our bastards.)
"Every little lawsuit helps", "Click. Collect. Counsel, "Half chips, half solicitors", etc appearing on the side of their delivery vans soon :-)
Popcorn time
A supermarket with a reputation for bullying it's suppliers and a supplier with a reputation for bullying it's customers.
I don't care who wins because I'll laugh whoever loses.