Tesco is migrating 40,000 servers off VMware and suing Broadcom for GBP 100M+. It says Broadcom hiked prices 175% and killed perpetual license support.
Tesco, one of Britain’s largest supermarkets, is migrating approximately 40,000 servers away from VMware. It is also suing Broadcom in the UK High Court for more than GBP 100 million, accusing the company of “abusive conduct.” It is one of the largest publicly disclosed VMware migrations since Broadcom completed its acquisition of VMware in late 2023.
Tesco purchased perpetual VMware licenses in 2021 with support and software updates until 2026, plus an option to extend for another four years. After Broadcom took over, Tesco says it faced price hikes of around 175% and was forced into more expensive subscription bundles. Broadcom refused to continue standalone support for the perpetual licenses Tesco had already paid for.
“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,” the filing reads. The company has hired third-party support providers to maintain its VMware environment while it migrates.
Tesco is not waiting for the court case to finish. It has set a deadline of the end of 2027 to complete the migration, choosing to move now rather than depend on a legal outcome. The decision to migrate 40,000 servers while simultaneously suing the vendor reflects how badly the relationship has broken down.
The timing coincides with HPE announcing this week that it will offer customers a free year’s licence for its Morpheus VM Essentials alternative, plus a $1 licence for its Zerto migration software. The VMware exodus is creating a market for alternatives that did not exist two years ago.
Broadcom’s CEO Hock Tan said earlier this month that the company is stepping back from acquisitions because AI revenue is growing fast enough organically. The VMware acquisition was the last big deal in that strategy. For the customers that deal trapped, the growth story looks very different. Tesco is spending money it did not budget to replace software it already owned because the new owner changed the terms.
The case matters beyond Tesco. Thousands of enterprises globally face the same pricing pressure from Broadcom’s post-acquisition VMware licensing changes. If Tesco wins its “abusive conduct” claim, it could establish a legal precedent that constrains how acquirers can restructure the licensing terms of products their customers already paid for. If it loses, enterprises will have confirmed what many already suspect: perpetual licences are only as permanent as the company that sells them.
Staff who use AI can end up with more to do, not less.
Think carefully about the tools you’re using and why.
Adopt a set of standards and refine your outputs.
The promise of productivity boosts from AI can come with an unwelcome side order of stress. Harvard Business Review found that AI doesn’t reduce work; it intensifies it, leading to cognitive fatigue and unsustainable hours.
While the common perception is that AI can help reduce workloads, allowing employees to focus more on higher-value and more engaging tasks, HBR’s research found that staff using AI worked more quickly and often ended up with more to do, not less.
Ankur Anand, group CIO at tech recruiter Harvey Nash, said professionals who want to avoid cognitive fatigue must understand how to use AI effectively and its potential risks.
“That focus will help to reduce the noise around the workload that AI creates,” he told ZDNET, suggesting that many people have unrealistic expectations about the productivity boost that AI will provide.
“Many organizations are telling their people, ‘We want to understand how you’re making an impact with AI,'” he said. “But these professionals are not empowered, which means that using AI adds a lot of pressure, because they need to prove themselves on their own terms.”
If you’re going to make the most of AI at work, then you’re going to have to find an effective balance between completing tasks quickly and producing high-quality work.
Here’s how the experts believe professionals can ensure they reap the benefits, not the problems, of AI — and they suggest that you’ll need to focus on three core areas: tools, guidelines, and outputs.
Limit your toolset
Alex Read, senior enterprise product manager for data at energy provider EDF UK, told ZDNET that the best way for professionals to reap the benefits, not the challenges, of AI is to be uber-focused on tools that help you produce value in your roles.
While there are thousands of potential AI-enabled services on the market, Read said sensible professionals limit their horizons.
In his own role, for example, Read focuses on how AI can help him build a data platform and update information accurately, efficiently, and productively: “Anything outside of that scope is noise for me.”
That sentiment resonated with Nick Pearson, CIO at technology specialist Ricoh Europe, who told ZDNET it’s important to take a step back and think carefully about how an AI tool can help you produce value in your role.
“If you think about the phrase ‘gen AI,’ the tech is very good, by definition, at generating outputs,” he said. “I could go to bed in the evening, set the model to work, and we could have four new IT strategies produced overnight.”
However, quantity doesn’t necessarily mean quality. Pearson suggested it’s important to focus on AI’s blind spots, particularly as most models are trained on preexisting content.
“AI can’t inspire people, per se; it can’t naturally create something new, because it’s actually quite recursive,” he said.
“And the judgment you have to put in sometimes, on top of everything else, whether it be an ethical or a capability judgment, is not there automatically in the technology.”
It’s in this gap, said Pearson, that human experts play a critical role: “We’re toying with that concern as an organization and saying, ‘Where does AI really play an important role, versus where are we upskilling people in areas that AI probably won’t play for a long time?'”
To correct this issue, HBR said companies need to adopt an “AI practice,” or a set of norms and standards around AI use that help professionals ensure they use AI in a constrained but productive manner.
At EDF UK, Read is part of an internal AI Center of Excellence in enterprise IT, which enables policy for the effective use of AI across the wider organization.
In addition to Read, who contributes input from a data-use perspective, the group includes other tech representatives, such as the firm’s senior manager of AI, principal software engineer, and principal solution architect.
“The remit of this center is to make sure that, when the federated business units are looking to build, develop, and deploy AI services, they have platforms, guidance, best practices, architectural assets, and materials to guide them on how to safely and efficiently adopt AI and operationalize it at scale,” he said.
Some of the key themes the center considers when assessing AI tools are scalability and reusability, ensuring a proposed service doesn’t replicate one already in use.
“All new tools and services related to AI will go through that hopper and funnel to understand scope and ensure the security, regulatory, and ethical side of things are understood,” he said, suggesting that all professionals should use their organization’s pre-existing guidelines to foster an appropriate exploitation of emerging tech.
“The benefit that guided approach brings is that it allows us to be clear in our messaging around what AI services can be used, how they’re used from a use-case perspective, and ultimately, what personas are allowed to use them.”
Louise Newbury-Smith, head of UK&I at technology specialist Zoom, told ZDNET that one way to ensure your outputs are constrained is to focus on prompting.
“Use simple amendments to be specific, such as ‘Give me the top three things with the biggest impact.’ That approach should guide your prompt, rather than saying, ‘Give me everything you know about this topic.'”
Newbury-Smith said the successful use of AI is all about being smart about how it’s exploited, and that effectiveness comes down to enablement and engagement. If a prompt yields too much information, refine it until you get what you need. She said this should still be faster than trying to get answers without AI.
The basic message for professionals is that effective applications of AI are all about you staying in the loop, said Bernhard Seiser, vice president of digital, data, and IT at AOP Health.
Think before you use AI, and think again before you push your outputs around the organization.
“It doesn’t help the business if you get AI-generated emails that are many pages long, and then you need ChatGPT to summarize the text,” he told ZDNET.
Seiser said that while there are certain tasks generative AI is good at and worth using for, in the end, “you need to use your brain.”
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