Tesco PLC (LSE:TSCO) has reportedly sued VMware owner Broadcom Inc (NASDAQ:AVGO) and reseller Computacenter PLC (LSE:CCC) over licensing and support contracts.
The FTSE 100-listed grocer's lawsuit claims breach of agreements signed before Broadcom’s acquisition of VMware in 2023, according to a report on The Register, which it says puts critical IT infrastructure supporting its stores in danger.
In 2021, according to court documents seen by the website, Tesco says it bought perpetual VMware licenses with support through 2026, plus an option to extend.
The retailer claims Broadcom’s move to subscription-only support forces it to pay inflated prices for software it already owns.
Tesco alleges it is being denied upgrades, including to VMware’s Cloud Foundation 9, and blocked from essential patches unless it buys new subscriptions.
The supermarket warns the dispute could affect its ability to run critical IT infrastructure, which supports about 40,000 server workloads including tills in stores.
Tesco is seeking at least £100 million in damages from each of Broadcom, VMware, and Computacenter, with the retailer saying the longer the dispute continues, the greater its damages claim could become.
Broadcom has previously argued its subscription-based Cloud Foundation platform offers strong value and is widely adopted among major customers.