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

Tesco is also dealing with migration challenges related to data security because its new, unnamed virtualization software is incompatible with the Veeam and Zerto products it uses.

“Manifestly unfair and excessive” price hike

Tesco initially requested at least 100 million pounds (about $133.6 million) in damages each from Broadcom, VMware, and reseller Computacenter, plus interest.

In its recent filings, Tesco said it turned down at least four offers from Broadcom to continue using VMware and Broadcom’s mainframe tech. One offer charged $23.5 million (about 17.6 million pounds) for VMware Cloud Foundation 9.0 and mainframe software and support services for a year, The Register reported. Tesco said that was “around 175 percent” more expensive than what it believes it should have had to pay for VMware and a 350 percent price hike for the mainframe offerings. The prices were “manifestly unfair and excessive,” one of Tesco’s filings said, according to The Register.

In an amended defense, Broadcom denied that the price hike was unfair, The Register reported. Additionally, Broadcom argued that it shouldn’t have to pay damages in relation to Tesco struggling to find VMware and Broadcom alternatives before Tesco’s support expired, as the retail firm has since found replacement products.

The case is expected to go to court between November 1, 2027, and February 25, 2028, The Register reported. Afterward, it could go to trial.

Although the companies will continue their dispute in UK courts, the disagreement mirrors frustrations that VMware customers and partners around the world have expressed since Broadcom bought VMware. With users often being heavily dependent on VMware products, many have delayed or avoided migration or are only moving some workloads, due to complications around cost, time, support, and compatibility.

Still, virtualization rivals, like Hewlett Packard Enterprise and Nutanix, have been making aggressive pushes to attract disgruntled VMware users.

Simultaneously, Broadcom has stuck to its VMware strategy and has reported financial success, especially among its target of large enterprises. It has also dealt with other public legal disputes with large customers, including AT&T, with which it reached an undisclosed settlement, and Siemens, which Broadcom accused of software pirating in an ongoing case in the US District Court for the District of Delaware.