Tesco is suing Broadcom and VMware reseller Computacenter for £100 million in damages after Broadcom terminated perpetual license support for VMware’s vSphere Foundation and Cloud Foundation, which Tesco had purchased in 2021 with a five-year support agreement (until 2026) and an optional four-year extension. The abrupt shift to subscription-based pricing forced Tesco to face 'excessive and inflated prices' for virtualization software it had already paid for. The lawsuit highlights severe operational risks, as VMware’s software underpins ~40,000 server workloads—including critical systems like store tills and supply chain operations. Failure to resolve the dispute could disrupt Tesco’s grocery supply chains across the UK and Ireland, potentially leading to widespread operational outages, financial losses, and reputational damage. Replacing VMware entirely would also be costly and high-risk, compounding the threat to Tesco’s business continuity. The case reflects broader industry backlash against Broadcom’s pricing model, with other major firms like AT&T and Siemens filing similar lawsuits.
TPRM report: https://www.rankiteo.com/company/-tesco
"id": "-te4420144091925",
"linkid": "-tesco",
"type": "Breach",
"date": "6/2021",
"severity": "100",
"impact": "5",
"explanation": "Attack threatening the organization's existence"{'affected_entities': [{'industry': 'Grocery/Retail',
'location': ['United Kingdom', 'Ireland'],
'name': 'Tesco',
'size': 'Large (Multinational)',
'type': 'Retailer'},
{'industry': 'Software/Semiconductors',
'location': 'Global (HQ: USA)',
'name': 'Broadcom',
'size': 'Large',
'type': 'Technology Vendor'},
{'industry': 'Virtualization/Cloud',
'location': 'Global',
'name': 'VMware (acquired by Broadcom)',
'size': 'Large',
'type': 'Software Provider'},
{'industry': 'IT Services',
'location': 'Global (HQ: UK)',
'name': 'Computacenter',
'size': 'Large',
'type': 'Reseller'}],
'description': 'Tesco has filed a £100 million lawsuit against Broadcom and '
'VMware reseller Computacenter for breaching VMware perpetual '
'licensing contracts, which included five years of support and '
'upgrades (2021–2026) with an optional four-year extension. '
"Broadcom's decision to discontinue perpetual license support "
"and push subscription-based models led to 'excessive and "
"inflated prices' for virtualization software Tesco had "
"already paid for. The dispute risks disrupting Tesco's "
'grocery supply chains across the UK and Ireland, as VMware '
'software underpins ~40,000 server workloads, including store '
'tills and operations. Replacing VMware could introduce '
'further costs and operational risks. Similar lawsuits have '
"been filed by AT&T and Siemens over Broadcom's pricing "
'strategies.',
'impact': {'brand_reputation_impact': ['Negative publicity due to lawsuit',
'Potential customer trust erosion if '
'supply chain disruptions occur'],
'financial_loss': '£100 million (claimed damages, potential to '
'rise if case prolonged)',
'legal_liabilities': ['Lawsuit against Broadcom, VMware, and '
'Computacenter for breach of contract'],
'operational_impact': ['Potential disruption to UK & Ireland '
'grocery supply chains',
'Risk of operational instability if VMware '
'replacement is required'],
'systems_affected': ['40,000 server workloads (including store '
'tills and operations)']},
'investigation_status': 'Ongoing (lawsuit filed, no resolution yet)',
'motivation': ["Financial Gain (Broadcom's subscription model push)",
"Contractual Enforcement (Tesco's lawsuit)"],
'post_incident_analysis': {'root_causes': ["Broadcom's termination of "
'perpetual license support '
'post-VMware acquisition',
'Misalignment between purchased '
'licensing terms and '
'post-acquisition vendor policies',
'High dependency on VMware for '
'critical infrastructure (40,000 '
'workloads)']},
'recommendations': ['Review vendor lock-in risks in perpetual licensing '
'agreements',
'Assess long-term costs of subscription models vs. '
'perpetual licenses',
'Diversify critical infrastructure dependencies to '
'mitigate supply chain disruptions',
'Proactively renegotiate contracts during corporate '
'acquisitions (e.g., Broadcom-VMware)'],
'references': [{'source': 'The Register'},
{'source': 'TechRadar Pro',
'url': 'https://www.techradar.com/pro/tesco-sues-broadcom-for-100-million-over-vmware-licensing-dispute'}],
'regulatory_compliance': {'legal_actions': ["Tesco's £100M lawsuit against "
'Broadcom, VMware, and '
'Computacenter']},
'response': {'communication_strategy': ['Public disclosure via media (The '
'Register, TechRadar Pro)'],
'remediation_measures': ['Legal action to enforce contractual '
'obligations',
'Potential VMware replacement '
'(high-risk, costly)'],
'third_party_assistance': ['Legal counsel (lawsuit filing)']},
'title': 'Tesco Sues Broadcom and VMware Reseller for £100 Million Over '
'Breach of Licensing Contracts',
'type': ['Contractual Breach', 'Licensing Dispute', 'Supply Chain Risk']}