Tesco Moving 40,000 Server Workloads Off VMware Amid Broadcom's 'Abusive Conduct' (arstechnica.com) 65
An anonymous reader quotes a report from Ars Technica: Tesco, a retail conglomerate headquartered in the United Kingdom, is moving 40,000 server workloads off of VMware amid "abusive conduct" from Broadcom, recent legal filings claim. Tesco filed a lawsuit in the UK's High Court against Broadcom alleging breach of contract last year. According to a September report from The Register, the lawsuit claimed that in January 2021, Tesco bought perpetual licenses for VMware's vSphere Foundation and Cloud Foundation, a subscription to VMware Tanzu, plus support services until 2026, with the option to extend support for four additional years.
But when Broadcom took over VMware in November 2023, it would not honor the deal and instead tried to get Tesco to pay "excessive and inflated prices for virtualization software for which Tesco has already paid" and would not allow it to buy support services for its perpetually licensed software without buying "duplicative subscription-based licenses for those same Software products," the initial complaint read, The Register reported at the time. Tesco, which reported 73.7 billion pounds (about $98.7 billion) in revenue in its fiscal year 2026, has since started migrating away from VMware and Broadcom's mainframe products, according to late-May court filings reported on by The Register today.
In January, Broadcom stopped supporting Tesco's VMware products, Tesco said, and Tesco has been paying for third-party support since. In its initial filing, Tesco also said that Broadcom refused to upgrade software or provide all security updates to customers without subscriptions. One of Tesco's recent filings, per The Register, reads: "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."
If it works "at exceptional pace," Tesco will be completely off VMware by the end of 2027 at the earliest. However, "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," Tesco reportedly noted. 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. 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. [...] 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. Further reading: HPE Tempts VMware Users, Partners With Year of Free Virtualization Software
But when Broadcom took over VMware in November 2023, it would not honor the deal and instead tried to get Tesco to pay "excessive and inflated prices for virtualization software for which Tesco has already paid" and would not allow it to buy support services for its perpetually licensed software without buying "duplicative subscription-based licenses for those same Software products," the initial complaint read, The Register reported at the time. Tesco, which reported 73.7 billion pounds (about $98.7 billion) in revenue in its fiscal year 2026, has since started migrating away from VMware and Broadcom's mainframe products, according to late-May court filings reported on by The Register today.
In January, Broadcom stopped supporting Tesco's VMware products, Tesco said, and Tesco has been paying for third-party support since. In its initial filing, Tesco also said that Broadcom refused to upgrade software or provide all security updates to customers without subscriptions. One of Tesco's recent filings, per The Register, reads: "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."
If it works "at exceptional pace," Tesco will be completely off VMware by the end of 2027 at the earliest. However, "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," Tesco reportedly noted. 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. 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. [...] 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. Further reading: HPE Tempts VMware Users, Partners With Year of Free Virtualization Software
Precedent? (Score:5, Interesting)
Going to be an interesting case to follow, as it will likely set at least some precedents in UK in terms of how much you can squeeze other businesses in B2B contracts in "terms of service", as well as how much you can retroactively change terms on "perpetual licenses".
Re:Precedent? (Score:5, Insightful)
should be interesting like you said... Europe isn't as quick to F over the people in exchange for corporate BS.
I hope Broadcom gets destroyed. The precedent upholding this bs is you can sell services/goods with licenses, then have another company buy you, keep all the profits from that and not honor the contracts. One can do this perpetually and grift customers and completely undermine all contracts. How this is even thought to be okay is insane, no sane logical person would look at this and think this is how contracts work and what perpetual means. Buying a company- there is due diligence done BECASUE you buy the company whole and it's LIABILITIES... even if those are contracts you don't like. Normally, they'd need to buy out the contract or re-negotiate first. In some jurisdictions- contract changes are a 2 party system where both need to agree on changes to the terms no matter the TOS.
Re:Precedent? (Score:5, Informative)
Someting like this has happened in the U.S. with unscrupulous solar panel + loan companies. You sign a contract to get the company to install solar panels on your house, and you pay for it with a lien. Usually the company has to maintain the installation. But there have been cases where the original company goes bankrupt, and another company buys all of the loans. The new company demands the client to continue to pay them monthly, but refuses to maintain the system any more, claiming they bought the loans, not the service agreements.
Did not (and won't) happen to me, but it's been in the news in the U.S.
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It's different when you have a contract with a company that goes bankrupt. You get screwed in that case. Vmware didn't go bankrupt and I see no reason why Broadcom should be able to buy the company but not have to take over all the obligations including the service contracts. This should be an easy win for Tesco and if Broadcom tries to do this to USA based customers, Broadcom should lose in USA courts too.
It may be, but it shouldn't be. Because many of the "solar company" bankruptcies were planned from day 1: Sell loans by marketing an unsustainable business model, loot profits from origination fees, "go bankrupt". Maybe even buy up those loans in the"bankruptcy" of the "solar company" by a company you opwn/have interst in! It's win, win, win for the scammers and all losing for the sucker homeowners.
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The solar-scam model is well established by now and has lots of creative permutations. It's at the point where finding a legitimate company to install them without shenanigans is ... difficult.
All the rebates and other incentives played a huge part in creating this of course. Shocking how 'free money' drives up prices and brings corruption so consistently. /s
Re:Precedent? (Score:4, Interesting)
I hope Broadcom gets destroyed
So long as they keep making chips for Raspberry Pi. (Although, I wouldn't be surprised if the Pi Foundation folks aren't working on alternative designs at this point.)
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IANAL
It is well known at this point what Broadcom has been up to for the last couple of years with VMware. How is this not some class action lawsuit in multiple countries by now? How is it that no attorney general or some regulatory agency has not investigated and brought Broadcom to court by now?
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None of this matters in court of law. What matters in court of law is what is written in the contract, what is written into law, and what is the precedent in similar cases.
"We signed the contract and other party to it followed the terms, but we need to take pecuniary losses to meet our contractual obligations today, so we want to renege on our obligations" normally leads to "cool story bro, you're ordered to follow the contract" in court.
Justice delayed is justice denied (Score:5, Insightful)
"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."
So two years later, after Tesco has completed all of the emergency work that's required to change their IT systems to something else, then this matter will be heard.
That timeframe is ridiculous. There's no reason why the courts can't operate more efficiently than they do other than that the lawyers and judges have no incentive to move things along.
How many other cases are old news and no longer particularly relevant by the time they're decided?
Re:Justice delayed is justice denied (Score:5, Interesting)
Both sides are going to want to get a great deal more evidence to support their positions - Tesco might want access to e-mails and strategy documents from Broadcom and they might want internal documents from Tesco showing what actual difficulties they encountered in migrating away. These will then have to be digested by experts capable of presenting them to the court and a case/defence built around them. All that takes a great deal of time. The aim of a civil case is to get financial restitution for the damages allegedly caused and the full amount probably won't even be known until the migration process is complete. Filing the case allows the discovery process to begin.
Courts will only intervene urgently if there's a threat of harm that could not subsequently be compensated adequately by monetary damages. In this case, all parties are large corporations with deep pockets whose continued trading is not in question.
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That timeframe is ridiculous.
It it.
There's no reason why the courts can't operate more efficiently than they do other than that the lawyers and judges have no incentive to move things along.
That's conservatism for you. Turns out if you strip masses of funding from the justice system under the guise of "austerity", then it grinds to a halt. Next time a conservative insists that they are a party of "law and order" or "tough on crime", call them out for being outright liars.
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To some extent, but this is being done in the commercial courts, which are largely self-funded by litigants through expensive court fees. The figure is well above 80% and that was true before austerity too. HMG has always seen commercial courts as an economic asset. The Tories still fucked things up to some degree, as they did for everything else, but less so than other areas.
Re:Justice delayed is justice denied (Score:5, Interesting)
You need to read The Secret Barrister novels, written by a real criminal-law barrister.
The UK courts are an absolute mess of chaos, that's not the lawyer's or the judges fault.
You would think that with a former-lawyer as the prime minister now it would get sorted, but they've made only token changes to an absolutely nonsensical court-appointment system that operates largely on constant fire-fighting and ill-preparedness and throwing lawyers to the wolves making them run from case to case with little to no preparation or warning.
It's continued because "that's how it's always been done" but the court system outgrew the capacity decades ago.
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You would think that with a former-lawyer as the prime minister now it would get sorted
You'd think that with a former human rights lawyer as the prime minister, he wouldn't be so keen on shitting on human rights.
No for Starmer, everything was just a stepping stone on his career ladder.
It's weird but he's a vacuum. He doesn't appear to stand for anything in particular. This is why none of the decisions make much sense as a whole, why there's no coherence, why he has no articulated vision, why the policies ar
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You would think that with a former-lawyer as the prime minister now it would get sorted
You'd think that with a former human rights lawyer as the prime minister, he wouldn't be so keen on shitting on human rights.
No for Starmer, everything was just a stepping stone on his career ladder.
It's weird but he's a vacuum. He doesn't appear to stand for anything in particular. This is why none of the decisions make much sense as a whole, why there's no coherence, why he has no articulated vision, why the policies are a complete mishmash.
But it's weirder. He doesn't even seem to stand for enriching himself beyond career climbing. He's somewhat non corrupt as these things go (I mean the glasses thing was dumb shit but small fry on the scale of these thing).
So sure he knows about the courts and human rights and etc but he doesn't stand for any of them.
Actually scratch that.
Judging him by what he's achieved, about the only thing he has been consistent on is a kind of petty authoritarianism with him in charge. This isn't even to say he hasn't done anything good (he manifestly has), but as part of a weird directionless morass (nationalise the trains, but repeat water company press releases about why that's impossible for water, for example).
Starmer is still better than the alternatives (Farage, Badenoch) but that's not saying much. The alternatives are just that shit.
Labour need to backtrack on the authoritarianism pronto, otherwise we'll be proper fucked the next time a real authoritarian gets in (like Trump bum buddy Farage). Some of the laws they're creating are made to be abused, even though Starmer isn't going to abuse them (he lacks the initiative, drive and imagination for that)
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Starmer is still better than the alternatives (Farage, Badenoch) but that's not saying much. The alternatives are just that shit.
Well quite. The thing about the lesser evil is it's still less evil.
I mean some stuff he's done is good. Some bad. It's all directionless.
Some of the laws they're creating are made to be abused, even though Starmer isn't going to abuse them
Well apart from the laws against protest which are selectively enforced (left wing aligned protests get policed heavily with long sentences, fa
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Tell us you don't know how courts operate without telling us you don't know how courts operate.
The parties have to file the appropriate paperwork and there are specified timeframes when they have to be done. For example, the plaintiff files to start the case, the defendant generally has 20 - 30 days to respond. Th
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Then the court has to schedule the case in between all the other cases they're dealing with. The parties may be ready to go to trial on April 1st, but if the first available slot in the court's docket isn't until June 1st, guess when the trial starts.
Except this isn't a delay from April to June. This is a delay of well over a year, and maybe nearly two years.
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"The wheels of justice turn slowly, but grind exceedingly fine."
No one is in a hurry, because it is just money. Financial harm can be made whole by financial means -aka Broadcom can be made to pay ALL of the costs of the harm to those they wronged, if they are found liable. There is no rush in a big business vs big business lawsuit, they are all assumed to be able to withstand the losses for as long as it takes.
The plaintiffs are usually not in a hurry, because they can tally up all of their actual costs
buyer beware (Score:1)
Wait..what?? (Score:4, Interesting)
its new, unnamed virtualization software is incompatible with Veeam
So, being as Veeam supports Hyper-V, Proxmox, Nutanix, Red Hat, and XCP-NG is supposedly coming within the next month or two...what could they have POSSIBLY moved to, and why the hell did they walk past all of those other products to do it?!
Re: Wait..what?? (Score:3)
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out of the frying pan
Re: Wait..what?? (Score:2)
While true, you trade the VMware problem for a vendor that actively wants you to stop using your preferred product and start renting from azure instead.
Unless you are all in on azure, Microsoft is a dubious choice as a virtualization solution.
That Make No Sense (Score:2)
Ex techies have already said that Tesco is moving to Hyper-V
That makes no sense as Hyper-V is fully supported by Veeam and Zerto.
Hyper-V for individual hosts may be "free". But at scale Hyper-V ends up costing almost as much as Broadcom. The cost for Windows Data Center and System Center Virtual Machine Manager(SCVMM) is ridiculous.
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If their VMs are Windows, they are already paying for the Windows DC cores. So it comes down to the cost of SCVMM vs VSphere Foundation Super Deluxe Pay for my Yacht.
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Personally, I'd give Tesco the benefit of a lot of doubt - they're super hot on their technology choices, so whatever they decided was for very good reasons. Whilst I'm sure they're mindful of their legacy, I'd also imagine they'd be very happy to clean it up in order to take advantage of something new, if such a move was justified.
Tesco works on tiny profit margins (relatively speaking). They also work at massive scale. Every penny in that place counts, so they definitely don't want to spend it somewhere t
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and you post this as AC because this is classic /. quip posting. just empty headed linux bro thoughts. "surely i must be smarter!"
Re:Wait..what?? (Score:4, Funny)
Could be HPE Morpheus [hpe.com], maybe?
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Good for them. Roughly 20 years to late ... (Score:2)
... for my taste but good for them.
Broadcom are going to get spanked (Score:4, Insightful)
The UK is well known as a premier venue for commercial litigation, partly because UK commercial judges have a reputation for being fair-minded, and this seems like a very obvious breach of the ToS. On top of that, Tesco is a notoriously well-run and extremely litigious shop. They are going to rip Broadcom a new one.
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Yes, I know. That’s what I was saying: Tesco get to use the UK commercial court system, with which they are *very* familiar, and which will peer at this with a very disapproving eye. And Tesco will fight this smartly and are going to administer a spanking as a result
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Oh really? Because here was I thinking that Mr Justice Trower was a High Court judge in the Chancery Division, called to the English Bar in 1983, made silk in 2001 and was hearing this case.
https://caseboard.io/cases/01c... [caseboard.io]
But do go on with your confident assertions.
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It's actually near impossible to believe t
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Gosh, a little knowledge really turns out to be a dangerous thing, eh? Looks like the very thing you said was utterly non-negotiable, a US jurisdiction for any disputes rather than the UK, was in fact completely negotiable. So if you’re wrong on that, perhaps it’s time to step back from what you think you know and understand that you don’t know enough to comment knowledgeably about this case
Now do Altium. (Score:2)
They just did this to everyone who purchased perpetual licenses. We told them to F off as the last version we could download was good enough and we literally cant use their cloud services which are the only updates they push now.
Tempted to forward the Altium sales guy this article. Maybe he'll realuze what they did is probably illegal.
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We have 5 Altium perpetual licences and were offered the usual maintainence renewal but have finally declined because any new stuff is in their cloud subscription layer which we refuse to use, because who wants their IP trapped in single vendor subscription hell.
The old Altium perp. Lic. Is not going away, but what they are saying, is if you don’t stay on maint. you can’t get back on maint. They made that threat 5 years ago and I called their bluff. $ are $.
VMWare on mainframe? (Score:2)
VMWare on mainframes? IBM (z/VM) would like to have a word with you as the last maker of mainframes
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It's probably legacy CA software on the mainframes, not VMWare product.
Broadcom is an absolute abomination when it comes to rent seeking from legacy customers for their predatory IP purchases.
Vendor lockin (Score:3)
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But for enterprise/corporate products, I agree. The sad thing is that AWS, Azure, and Google Cloud are the new VMWares, since what runs under your open-source Kubernetes cluster is a proprietary stack. Yes
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And yet, everybody, from startups to big corpos, is ok with this new severe form of vendor-lock-in. Please someone make it make sense!
It's cheaper in the short term to get going. Methods without the lock in tend to be a bit more expensive up front. Most businesses are looking only at the current quarter without regard for the longer term. Buying is cheaper than renting only after some period of time, and that period of time is nearly always longer than a quarter.
Also, they have established their way as 'the' way for any *serious* business to do things. So management doesn't want to be seen as failing to do 'the' thing.
Considering Tesco's own behaviour (Score:3)
What Is Tesco Switching To? (Score:2)
its new, unnamed virtualization software is incompatible with the Veeam and Zerto products it uses.
So what are they using? Veeam handles Hyper-V, Proxmox, KVM, Nutanix, and more.
XCP-ng seems like a likely candidate. It is an excellent, though not drop-in, replacement for VMWare. But, Veeam doesn't support it.
You can't convince me that Tesco is using HPE's shitty product. That would be like jumping from the frying pan into a super volcano.
Meanwhile...in the US (Score:1)
You're just fucked. Once broadcomm took the business over they had no legal responsibility to honor previous contracts.
We're at the point now that business just exists to fuck everyone over. Given a CEO can run a company in to the ground and still get billions in payouts....where is the incentive to do anything? They don't have any. They can be the nastiest sons of bitches anywhere...and the courts will ensure they get paid.
Pretty soon we'll all be paying companies for no reason by legal force.
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Broadcom has been sued by AT&T. Fidelity and the UnitedHealthcare. The first two companies reached settlements with Broadcom. Why would Broadcom settle if they had no legal requirement to honor prior contracts?
And Broadcom doesn't really care. (Score:3)
Broadcom's strategy all along has been;
1. Buy VMWare.
2. Squeeze maximum short-term money out of it to earn back the purchase price plus a big profit.
3. Kill VMWare dead in five years because they'll have their money and they don't want to be bothered with it anymore.
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Broadcom's strategy all along has been;
1. Buy VMWare.
2. Squeeze maximum short-term money out of it to earn back the purchase price plus a big profit.
3. Kill VMWare dead in five years because they'll have their money and they don't want to be bothered with it anymore.
And because they knew the product was going to die anyway. Open source alternatives have caught up and there's nothing to keep customers from switching.
This isn't a justification, but it's an explanation. If they thought VMWare would be a long-term cash cow, they would keep it going. They know that won't happen, so they've opted to squeeze as much cash from it as possible, as quickly as possible. They recognize that will accelerate its demise, but apparently believe it will make them more money, since
Anyone remember Computer Associates? (Score:2)
This is exactly how CA used to operate:
- acquire a company
- screw the customers by cranking up the price
- stop development and let the product die
It looks like when Broadcom acquired CA, as part of the deal they got CA's business strategy and the assholes who implemented it as part of the deal.
How to write a perpetual license (Score:2)
For any "forever" contract, it is key to put in a penalty clause, along the lines of:
(License bought for $100)
Penalty Clause:
If in the event the company decides it no longer desires to honor this contract, it can buy itself out of the contract for $10,000, plus any legal fees and interest due upon termination of the contract.
If you do this, the company will:
a) Be hesitant to break the contract
b) Have a much harder time in court should they do so.
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Race to the bottom (Score:2)
How business sell things has become enshittified.
Every last way to exploit the customer is discovered and used. This will continue until the customer(s) have a different way to solve an issue, and even then the greedy companies will use the court system to attempt to block any alternatives.
There used to be simpler times. Before the Internet, there were more businesses which acted in good faith. This isn't the case nowadays.
Something eventually will have to give.
The question is will the government(s) allow t
An opportunity for Tesco? (Score:2)
By the end of this migration Tesco will know a LOT about what's needed to wean oneself from VMware. They will also have developed a lot of contacts with other software and service providers.
Wouldn't it just be a shame if they leveraged the newfound expertise and contacts to help other businesses escape the fucking-over that Broadcom is delivering? And wouldn't it also be a shame if they spearheaded the creation of a new offering to compete with VMware, and made a little money while putting the screws to the