Tesco says it is moving 40,000 server workloads off VMware after a court fight with Broadcom over support and licensing pushed the retailer into a costly search for replacements. The company told the UK's High Court that the shift is already under way and that it could be fully off VMware by the end of 2027 at the earliest.
The scale matters because these are not spare systems. Tesco said the software supports business functions such as store ordering and payroll, and that the migration has to be done at exceptional pace. For a retailer of that size, the project is less a technology refresh than a rebuild of the plumbing that keeps daily operations running.
Tesco's dispute began with a licensing deal it struck in January 2021, when it bought perpetual licenses for VMware's vSphere Foundation and Cloud Foundation and subscribed to VMware Tanzu with support services until 2026, with an option to extend support for four additional years. Broadcom acquired VMware in November 2023, and Tesco says the new owner would not honor the arrangement after the takeover. Broadcom then stopped supporting Tesco's VMware products in January, leaving the supermarket to pay for third-party support while it looks for alternatives.
That gap is why the latest filings landed with so much force. Tesco said Broadcom refused to upgrade software or provide all security updates to customers without subscriptions, forcing it to procure alternative solutions with reduced functionality. It also said the new virtualization software it chose is incompatible with the Veeam and Zerto products it uses, which means the move is not just about replacing one platform with another but about untangling a wider set of tools around it.
Tesco has also put a price on the dispute. It initially sought at least 100 million pounds in damages each from Broadcom, VMware and Computacenter, plus interest, and said it turned down at least four offers from Broadcom to continue using VMware and Broadcom's mainframe technology. One offer, dated January 9, 2026, would have charged $23.5 million for VMware Cloud Foundation 9.0 and mainframe software and support services for a year. Tesco said that was around 175 percent more than it believes it should have paid for VMware and represented a 350 percent price hike for the mainframe offerings. Broadcom denied that the price hike was unfair in an amended defense.
The clash leaves Tesco in a narrow lane: keep paying for third-party support while it migrates, or absorb the risk of moving a large estate under pressure. Tesco said it could be completely off VMware by the end of 2027 at the earliest, but the open question is whether it can finish the shift without disrupting the systems that keep its stores and back office running.
