Tesco shifts 40,000 workloads from VMware over Broadcom conduct

UK retail giant Tesco is migrating 40,000 server workloads away from VMware, accusing Broadcom of “abusive conduct” following its acquisition of the virtualization company. The move, detailed in recent UK High Court filings, represents one of the largest-scale defections from the Broadcom-owned platform since the controversial takeover.

Tesco initially filed a breach of contract lawsuit against Broadcom last year. According to a September report from The Register, the grocer had purchased perpetual licenses for VMware’s vSphere Foundation and Cloud Foundation in January 2021, along with a subscription to VMware Tanzu and support services extending through 2026, with an option to extend support for four more years.

The trouble began after Broadcom completed its acquisition of VMware in November 2023. The chipmaker allegedly refused to honor the existing agreement, instead demanding that Tesco pay “excessive and inflated prices for virtualization software for which Tesco has already paid,” according to the initial complaint. Broadcom also reportedly blocked Tesco from purchasing support services for its perpetually licensed software unless it also bought “duplicative subscription-based licenses for those same Software products.”

Tesco, which posted 73.7 billion pounds (approximately $98.7 billion) in revenue in its fiscal year 2026, has now begun actively migrating away from both VMware and Broadcom’s mainframe products, according to late-May court filings cited by The Register.

In January, Broadcom cut off support for Tesco’s VMware products, forcing the retailer to pay for third-party support. Tesco also alleged in its initial filing that Broadcom refused to upgrade software or provide full security updates to customers without active subscriptions.

One of Tesco’s recent filings starkly describes the situation: “Faced with Broadcom’s abusive conduct, and given the criticality of virtualization and mainframe software and services to its business, Tesco has been forced to incur material costs to procure alternative solutions with reduced functionality, and to migrate to that software in a manner, and on a timeframe, that creates very significant risks to its business.”

Even if Tesco moves “at exceptional pace,” it will not be fully off VMware until the end of 2027 at the earliest. The company noted that “the timeframe in which that migration must be undertaken has created and continues to create operational and commercial risk, and at material ongoing cost and disruption to the business.” The case highlights growing friction between Broadcom and enterprise customers since its VMware acquisition reshaped licensing and support models.