UK retail giant Tesco is replacing VMware with an alternative product and pressing ahead with its licensing lawsuit against the virtualization pioneer's parent company, Broadcom, which will be considered by the UK's High Court no sooner than November 2027. The roots of the dispute are a January 2021 contract that saw Tesco acquire perpetual licenses for VMware's vSphere Foundation and Cloud Foundation products, plus subscriptions to Virtzilla's Tanzu products. The supermarket giant also signed up for support services and software upgrades until 2026, with an option to extend that deal for four years. Computacenter signed up as a reseller and relied on Dell as the distributor of VMware's products. Tesco also uses some of Broadcom's mainframe software, and wanted to extend licences and support for that too. Tesco and VMware struck that deal before Broadcom acquired VMware. After the acquisition, Broadcom stopped selling standalone services for customers who did not adopt subscriptions for its software bundles. Broadcom was therefore unwilling to extend support for Tesco's VMware estate. The supermarket chain sued Broadcom in mid-2025, alleging breach of contract and anti-competitive behavior. The case picked up again in late May with a flurry of filings that The Register has just digested. The new documents reveal that Tesco has decided to quit VMware and Broadcom's mainframe products, is rushing to migrate to alternatives, has turned to third-party support providers for its VMware estate, and alleges Broadcom is abusing its market power. "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," the filing states. Those costs include payments for third-party VMware support because Broadcom stopped supporting the virtualization software in January 2026. The supermarket hopes to be off VMware by the end of 2027 but says that target is its earliest possible date and will require it to work "at exceptional pace." Elsewhere in the filing, Tesco says "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." The risks aren't abstract: Tesco says it uses Broadcom mainframe software to order products for its stores and process its payroll. The retailer is also worried about data security and protection because the virtualization product it has chosen as a VMware replacement isn't compatible with the Veeam and Zerto tools it uses. Rejecting offers Broadcom appears to have made Tesco at least four offers, including a "Strategic proposal" in July 2024 that covered virtualization and mainframe products. Another offer delivered on January 9, 2026, offered separate terms for VMware products and mainframe software – the first time Broadcom dangled discrete deals. Tesco struggled to process it because Broadcom offered the deal just 19 days before the end of its existing agreements. Two offers arrived in April. Tesco says one proposed charges of $23.5 million (around £17.4 million) for a year of VMware Cloud Foundation 9.0 and Mainframe Software and Support Services. The retailer says that offer represented an increase of "around 175 percent" compared to the prices Tesco believes it was entitled to under its 2021 contract for VMware software and services, and a 350 percent increase for the mainframe products and services. The retailer described those price hikes as "manifestly unfair and excessive." Broadcom's amended defence rejects that characterisation, and also Tesco's claim that it deserves damages as it could not find an alternative supplier before its deals expire. Now that Tesco has found alternatives, Broadcom thinks the retailer can't easily point to losses that deserve damages payments. Other recent filings reveal that the matter is due to be heard in the UK's High Court during a window that opens on November 1, 2027, and closes on February 25, 2028. That doesn't mean the trial will consume all that time – it's an indication of when the court thinks it will have time to consider the matter. Broadcom has fought other high-profile cases over its licensing changes, most notably with AT&T and Siemens. The telco giant reached a confidential settlement, but the Siemens case is ongoing. On The Reg's reading of Tesco's filings, the retailer appears comfortable with litigating its claims with an argument that Broadcom refused to honor past agreements and that its main defense – it can't support products that don't exist since it reorganized VMware – is weak. Broadcom execs have told The Register they have an enormous dislike for providing extended support for old products and a huge preference to shift customers to subscriptions for the company's flagship Cloud Foundation (VCF). They argue that that continuing to use old VMware software sold under perpetual licenses is an act of corporate self-harm because VCF is so powerful it quickly pays for itself by improving IT department operations and improving business efficiency. But those messages aren't landing with some customers. We've reported organizations including Western Union, GEICO, and Computershare moving away from VMware, and even some VMware partners like Rackspace reducing their use of the virtualization giant's wares. We've also just learned that Belgian technical secondary school Scheppers Instituut Wetteren shifted to local contender Whitesky.Cloud to avoid a 400 percent price hike, and made the move without needing any new hardware. ®
An anonymous reader quotes a report from Ars Technica: Hewlett Packard Enterprise's (HPE) new virtualization software promotion will likely pique the interest of end users and resellers who are unhappy with Broadcom's pricing of VMware. During its HPE Discover event in Las Vegas this week, HPE announced that customers could use its "HPE Morpheus Software -- VM Essentials" offering for free for "up to one year," per a press release. HPE's website describes its virtualization platform as a "VMware alternative." It includes a hardware virtual machine (HVM) hypervisor and unified management and lets users "manage VMware ESXi and HVM clusters from one console and migrate when you're ready," HPE's website says. "New VM Essentials customers can receive up to one free year of licenses for VM Essentials, a year of HPE Zerto for $1 to support non-disruptive migration to HPE virtual machines, and 0 percent interest on software through HPE Financial Services," HPE's announcement reads, referring to HPE's group for helping IT teams manage funding.
Free for a year is cheaper than what Broadcom has charged for VMware vSphere since taking over. VMware prices have skyrocketed due to VMware's parent company eliminating perpetual licenses and bundling products into expensive packages. Notably, per its website, HPE recommends charging $600 per CPU socket per year for VM Essentials; Broadcom has controversially shifted vSphere licensing pricing to a per-core basis. "Customers are feeling quite a bit of pain in the change that some of the virtualization companies have put there, specifically Broadcom," Jeremiah Jenson, VP of HPE's North American channel and partner ecosystem, told CRN. The executive claimed that VM Essentials could bring up to 90 percent cost savings compared to VMware while also helping to "eliminate vendor lock-in and simplify hybrid IT."
From March 1 to June 30, HPE has also been offering a free year of VM Essentials via rebate to customers who buy an AMD server and a one-year VM Essentials license. VM Essentials is only available through channel partners, a stark contrast from Broadcom's VMware approach, where the chip giant has drastically reduced the number of resellers that can sell VMware products. HPE's new promotion aims to entice customers to more deeply consider migrating off VMware. [...] HPE also announced that it would give 600 reseller partners who earn the HPE partner program's Private Cloud with Virtualization competency by the end of the year free VM Essentials software licenses for three years. Partners still have to pay support costs, though. The benefit is "a step in the correct direction," said Dean Colpitts, CTO of Canadian managed services provider (MSP) Members IT Group (MITG), which VMware cut from its reseller program after 19 years of partnership a year ago. However, limiting the promotion to 600 partners is "very shortsighted." He believes that HPE should give all of its partners VM Essentials "to facilitate getting [VM Essentials] into customer sites and displacing the competitors."
"They need to fling [VM Essentials] as far and as fast as they possibly [can] to immediately gain traction and draw ISVs to them, which will increase adoption even more," he said.
HPE is taking advantage of VMware's expensive licensing changes by offering customers free use of its own VM Essentials product for a year, plus a $1 license for its Zerto data protection product to help ease migrations. The jolly green giant announced the cheapies at the Partner Growth Summit staged alongside its HPE Discover event in Las Vegas, and framed them as a migration assistance program intended to arm channel partners who want to help customers reduce their financial risk when migrating virtualization platforms. "One of the big things we see is that as customers are going through this journey on transforming their operating model, you end up with double expenses and so we're really pleased to announce the program around Morpheus and platform migration," said EVP and CTO Fidelma Russo. "We are announcing that as a customer goes through this transformation with HPE Morpheus VM Essentials, you don't pay for the first year of licenses. You will get Zerto migration licenses during that period to help you move, and so what this does is it helps mitigate the double-bubble cost problem that customers see as they are looking to migrate from one platform to another." Neither Russo nor HPE mentioned VMware as part of their pitch for this migration assistance program, but it seems pretty clear where it is aimed. At its last Discover event in Barcelona, HPE talked about customers seeing license fees for virtualization skyrocketing and claimed that it was able to provide "a fully integrated enterprise-grade alternative" with Morpheus and OpsRamp management tools, plus Zerto disaster recovery software. A survey recently found that half of VMware users plan to reduce their use of the virtualization pioneer's products by 2028. Since being acquired by Broadcom, VMware license costs have increased by 800 to 1,500 percent for some customers. VMware also ended partner programs that many service providers relied on. HPE says it is introducing VM Essentials for Partner IT to help providers transition their virtualized business applications. This will see it provide VM Essentials software licenses free of charge for three years, with partners paying only support costs, to the 600 partners who gain Private Cloud with Virtualization competency by the end of the year. The company is also extending its channel-only model to cover HPE Private Cloud PC3000 (formerly HPE Private Cloud Business Edition), HPE SimpliVity PC1000, and HPE Zerto software from July 1. HPE said this follows the success of selling Morpheus VM Essentials through a channel-only route to market. Also at the Partner Growth Summit, the IT biz will disclose that it is unifying the HPE and Juniper Networks partner programs under its Partner Ready Vantage umbrella. The aim is to have a single, global program for partners to offer services across networking, cloud, and AI. This change will take effect from November 1, after which partners will operate under one program with a simplified structure, aligned incentives, and a consistent engagement model, while existing investments are protected, or so HPE claims. The company also says it will help cloud service providers build and operate differentiated private cloud services with CloudOps Software and the backing of HPE Partner Ready Vantage. "Partners want a simpler way to engage and a bigger opportunity to grow," said Simon Ewington, HPE's SVP for Worldwide Channel and Partner Ecosystem. ®
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