Supermarket Giant Tesco Files Lawsuit Against VMware Over Support Disruption
Tesco, one of the UK’s largest supermarket chains, has filed a lawsuit against VMware and its reseller Computacenter for at least $134 million, accusing them of breaching support agreements tied to its perpetual licenses. The dispute centers on VMware’s failure to provide ongoing support for its software, which Tesco claims is essential for its operations. The lawsuit warns that a lack of support could disrupt food supply, as VMware software underpins critical systems such as store systems and supply chain management.
Tesco’s filing details that in January 2021, the retail giant acquired perpetual licenses for VMware’s vSphere Foundation and Cloud Foundation products, along with subscriptions to Virtzilla’s Tanzu products. These licenses were accompanied by support services and software upgrades promised until 2026. However, after Broadcom acquired VMware, the company ceased selling support services for software sold under perpetual licenses, forcing Tesco to seek new subscriptions at higher costs. The retailer argues that this has resulted in significant financial strain, as it is now required to pay inflated prices for virtualization software it has already purchased.
Tesco claims that Broadcom’s new subscription-based model has left the supermarket chain unable to purchase support services for its existing perpetual licenses without also buying additional subscriptions. This duplication of costs has led to accusations of unfair business practices. Furthermore, the retailer alleges that its contracts with VMware included eligibility for software upgrades, but that Broadcom is now withholding updates for its Cloud Foundation 9 software. This has created a risk of operational instability, as Tesco’s systems depend on the latest versions of these products to maintain efficiency and security.
Tesco’s lawsuit also targets Computacenter, the reseller it relied on for software licenses, accusing it of breaching contracts by failing to supply software at a fixed price. The filing states that the reseller’s actions have contributed to financial loss. Additionally, the retailer argues that Broadcom’s patch publication policy leaves users without subscriptions unable to receive all security updates, which could expose its systems to vulnerabilities. Tesco claims it is entitled to these updates under its contracts, further complicating its ability to secure its operational infrastructure.
The filing outlines the potential consequences of the dispute, warning that without proper support, VMware software and its associated systems are vital for the operations and resilience of Tesco’s business. The retailer states that its operations, including store systems and supply chain management, are critically dependent on VMware’s platform, which hosts approximately 40,000 server workloads. The lawsuit asserts that the failure to provide support could undermine Tesco’s ability to continue its grocery operations, threatening food supply across the UK and Republic of Ireland.
Tesco’s filing demands that VMware, Broadcom, and Computacenter be held liable for at least $134 million in damages, plus interest. The retailer warns that the longer the dispute persists, the higher the damages will climb, highlighting the urgency of resolving the matter. This case underscores the growing tensions between software vendors and their enterprise clients, particularly in the face of shifting support models and financial implications for large-scale operations.