The UK supermarket chain paid for what it thought was indefinite access to VMware's server virtualization software in 2021. After Broadcom acquired VMware and changed the terms, Tesco is now migrating off and suing in UK High Court.
Tesco, one of the UK's largest supermarket chains, also runs one of the largest private data-center footprints in British retail. The software that keeps checkouts, supply chains, and store systems running is now being ripped out and replaced on a tight schedule, while the company simultaneously fights VMware's new owner in the UK High Court, according to The Register.
Tesco did what enterprise procurement teams are told to do: it signed a multi-year contract with perpetual licenses, bought support and upgrade runway, and secured extension options. It still ended up needing an emergency migration.
In January 2021, Tesco signed a deal for perpetual licenses to VMware vSphere Foundation and VMware Cloud Foundation, plus Tanzu subscriptions, The Register reports. The package included support services and software upgrades running until 2026, with an option to extend support for four more years. Computacenter acted as reseller and Dell as distributor. At the time, Broadcom had not yet acquired VMware.
After Broadcom acquired VMware, the new owner stopped selling certain VMware offerings and reorganized packaging around bundles that pushed customers toward its own stack. Tesco argues the changes left the perpetual licenses it had paid for materially less useful, and that getting back to equivalent functionality now requires moving workloads off VMware entirely, per the court filings reported by The Register.
That is the migration now underway. Tesco is replacing VMware with an alternative product while continuing its licensing lawsuit against Broadcom, according to The Register. The UK High Court case is scheduled to start in November 2027.
Tesco also runs Broadcom mainframe software and sought to extend support for that as well, The Register adds, which is why the dispute covers more than the VMware virtualization layer. The combined exposure, the cost of the migration itself plus lost productivity and reduced functionality during the cutover, is what turned a routine contract renewal into litigation.
The open question for every enterprise buyer sitting on a similar VMware or perpetual-license arrangement is whether a 2021-era perpetual license still means what it said on the cover page when the vendor changes the product underneath it. Tesco's answer, filed in court, is that it does not.