Tesco races to exit VMware as Broadcom licensing fight heads to court

Tesco has begun replacing VMware and Broadcom mainframe software while it pursues a licensing lawsuit against Broadcom in the UK High Court.

The dispute traces to a January 2021 deal covering VMware vSphere Foundation, VMware Cloud Foundation, Tanzu subscriptions, support, and upgrades. Tesco says the contract gave it an option to extend support for four years after 2026.

Broadcom bought VMware, changed the sales model, and pushed customers toward subscription bundles such as VMware Cloud Foundation. Tesco says Broadcom then refused the support extension that Tesco expected under the 2021 agreement.

Tesco sued Broadcom in mid-2025, alleging breach of contract and anti-competitive conduct. The UK High Court has set a hearing window from Nov. 1, 2027, to Feb. 25, 2028.

The filings show a hard operational problem behind the legal fight. Tesco says it uses Broadcom mainframe software to order store products and process payroll. It also relies on VMware across its virtualization estate. Replacing both stacks at speed gives the retailer less room for testing, fallback planning, and security review.

Tesco says Broadcom stopped supporting its VMware software Jan. 29, 2026. The company has hired third-party support providers while it works toward a VMware exit by the end of 2027. Tesco calls that date its earliest target.

The replacement plan also affects backup and recovery. Tesco says its chosen VMware alternative does not work with the Veeam and Zerto tools it uses. That gap matters for user data because backup, replication, and recovery systems help companies restore service after outages, failed migrations, ransomware attacks, and data loss.

Broadcom made several offers, according to the filings. Tesco says an April offer sought $23.5 million, about £17.4 million, for one year of VMware Cloud Foundation 9.0 and mainframe software support. Tesco says that price exceeded the VMware support price it expected under the 2021 contract by about 175% and exceeded the mainframe support price by about 350%.

Broadcom disputes Tesco’s account. The company argues that Tesco found alternative suppliers, which weakens Tesco’s claim for damages. Broadcom also says its VMware reorganization changed the product and support structure.

The case gives enterprise customers another test of Broadcom’s post-acquisition VMware strategy. Broadcom executives have pushed customers toward bundled subscriptions and away from older perpetual-license arrangements. Some large users have accepted the move. Others have started exit programs, fought pricing changes, or moved workloads to rival platforms.

For Tesco, the cost fight now runs beside a live infrastructure migration. The retailer must keep stores supplied, payroll running, and protected data recoverable while engineers replace virtualization and mainframe systems that support core operations.

The court fight will test the 2021 contract, Broadcom’s licensing conduct, and the limits of vendor power after a major software acquisition.