Tesco sues Broadcom for £100M, says VMware perpetual licenses were stranded

UK supermarket chain Tesco has taken Broadcom and reseller Computacenter to court, alleging breach of contract over support for VMware software it already owns. Tesco says it bought perpetual licenses for vSphere Foundation and Cloud Foundation in January 2021, plus Tanzu subscriptions and support running through 2026 with an option to extend four more years. After Broadcom acquired VMware and pivoted the entire business to subscriptions, Tesco claims it can no longer buy standalone support for those perpetual licenses without also paying for duplicative subscription licenses covering products it has already purchased. It further alleges Broadcom is gating Cloud Foundation 9 upgrades and security patches behind subscriptions.

The stakes are framed as operational, not just contractual. Tesco says VMware underpins roughly 40,000 server workloads and the data systems that connect its stores, arguing that being cut off from support and patches threatens the infrastructure behind grocery supply across the UK and Ireland. It is seeking at least £100 million (about $134 million) in damages plus interest, and warns the figure will grow the longer the standoff continues.

The case is another data point in the backlash against Broadcom’s post-acquisition licensing overhaul, which scrapped perpetual licenses in favor of bundled subscriptions. AT&T and Siemens have filed comparable suits, and Tesco’s complaint references further unnamed disputes over the same question: whether Broadcom can withhold support for licenses customers bought outright. The outcome could shape how much leverage enterprises retain when a vendor unilaterally rewrites the commercial terms underneath software they depend on.