Tesco, a major UK supermarket chain, is migrating its entire server fleet of 40,000 servers away from VMware, citing...

Tesco, a major UK supermarket chain, is migrating its entire server fleet of 40,000 servers away from VMware, citing Broadcom's aggressive subscription pricing and a 175% price hike. This is the largest publicly known VMware exit since Broadcom's acquisition, reflecting growing customer backlash. Tesco has also filed a £100m lawsuit against Broadcom for breach of contract and competition law violations. Broadcom has reportedly stopped supporting Tesco's VMware suite. The migration, expected to complete by 2027, signals a potential acceleration of customer churn away from VMware's platform, threatening Broadcom's software revenue. While the direct impact on AVGO's AI/semiconductor business is limited, the broader reputational and financial risk from enterprise customer losses is significant. The lack of named alternative software suggests migration challenges, but HPE's offer of free Morpheus VM Essentials and Zerto migration incentives indicates competitors are actively poaching disgruntled VMware customers. This event confirms the ongoing risk to Broadcom's VMware revenue and may pressure AVGO's stock in the near term. Source: Tom's Hardware