Ever since buying out VMware in 2023, Broadcom has raised prices for existing customers. Although the play did result in massively increased revenue for VMware, it also triggered a slow but steady exodus away from the platform, as enterprises everywhere balk at the price tags and/or sue Broadcom.
UK supermarket chain Tesco is the latest entity to up and replace VMWare across its fleet of 40,000 servers, a move it expects to complete in 2027, Ars Technica reports.
This marks the largest publicly known migration off the platform in recent years, and arrives against the backdrop of the $134-million (£100m) lawsuit that Tesco filed last year against Broadcom. In the filing, Tesco claims that Broadcom committed a breach of contract by not honoring the perpetual licenses it bought in 2021, and that Broadcom’s actions are at odds with multiple competition laws. Tesco also named VMware itself and Computacenter, the reseller, in the suit.
Tesco’s story is a familiar one since the Broadcom acquisition. Much like other customers, the supermarket chain had reportedly bought perpetual licenses for vSphere Foundation and Cloud Foundation, plus support services until 2026 with a four-year extension option. In 2023, Broadcom bought VMware and stopped perpetual licensing in lieu of subscriptions.
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This resulted in highly elevated pricing figures for Tesco, apparently to the tune of a 175% price hike for VMware and a 350% upcharge for mainframe software. After the 2025 lawsuit, the situation predictably deteriorated further, and Broadcom stopped supporting Tesco’s VMware suite, forcing the chain to find an unnamed third party for that job. CEO Hock Tan’s shop goes as far as to refuse security updates to customers without subscriptions, too.
There’s no word on which software Tesco’s systems administrators have selected for the job, though the Ars Technica report says that the choice appears to be incompatible with both Veeam and Zerto, suggesting it’s a lesser-known offering. Additionally, TechRadar notes that HP Enterprise just announced it’s offering its customers a year’s free licensing to Morpheus VM Essentials, along with a $1 license for Zerto migration software. The timing is interesting, as HP is looking to snag former VMWare customers.
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Ever since the Broadcom acquisition, VMware has forced subscription bundling for support contracts, effectively doubled per-core pricing, specified a 72-core minimum for purchase (thereby nuking small business setups), added a three-year contract minimum, and enforced penalties for late renewals. Moving an entire server infrastructure off a hypervisor platform is significant. Even still, a few corporations have done so, and others are reportedly considering switching away.
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