#127 Special Episode: The Tesco v Broadcom Case Explained: Why Enterprise IT Leaders Should Pay Attention

5 Mar 2026 · 59 min · 26 chapters

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In short

A special episode explaining the Tesco v Broadcom High Court case and what it means for enterprise IT commercial/platform risk, especially VMware licensing and “end of availability” support.

Guests

Barry Pilling (BDigital). Background: 25+ years in IT after leaving the Royal Air Force in 2000; started in software asset management, then IT asset management for 16–17 years. Worked across major software vendors; has focused on VMware licensing for ~13–14 years and helped build BDigital’s ITAM practice.

Key claims

  • Broadcom’s VMware acquisition (Nov 2023) drove a shift from perpetual to subscription licensing and withdrawal of perpetual support.
  • Tesco’s contract via reseller/distributor chain (Computer Center, Dell) allegedly preserved 4 years of perpetual-license support; Broadcom says it didn’t agree and relies on an “end of availability” clause.
  • Tesco argues support can’t be “end of availability” if the same products/patches/support are still available under subscriptions; Broadcom argues the clause allows retirement at its discretion.
  • Precedents (AT&T; Dutch Water Ministry) suggest courts may compel support obligations.

Notable examples

Tesco’s ~40,000 VMware VMs; Microsoft’s “preferential pricing” approach for moving to Office 365; Broadcom’s “Subscription Upgrade Program” (Aug 2022).

Written by AI. May contain mistakes. Listen to the episode to check what was said.

Chapters

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Barry Pilling's Background in ITAM

1:49 to 4:36

Barry shares his career journey and expertise in IT asset management.

“But if you could just sort of set a bit of context, can you talk us through a little bit about your background, how you got into IT asset management and sort of a little bit of a high-level overview of your career?”

Understanding VMware and Broadcom Acquisition

4:36 to 6:29

Overview of VMware's role and significance of Broadcom's acquisition.

“Well, it's been fab to get you on board and work with you, Barry.”

Impact of Tesco vs. Broadcom Case

6:29 to 10:56

Discussion on the legal implications of the Tesco vs Broadcom case.

“And before we dive in, I just wanted to check, is that a Tottenham shirt on the wall behind you?”

Timeline of the Tesco and Broadcom Dispute

10:56 to 12:45

Timeline of events leading to the dispute between Tesco and Broadcom.

“a couple of hundred people mainly reliant on Microsoft 365.”

Complexities of the Software Supply Chain

12:45 to 14:01

Examination of the complexity involved in the software supply chain.

“is who's involved in the dispute as well.”

Understanding the Tesco v Broadcom Case

14:01 to 14:54

Learn about the core elements of the Tesco v Broadcom legal dispute and its implications.

“And a key part of Broadcom's defence is that, well, we never agreed that in a contract.”

Contractual Obligations and Support Challenges

14:55 to 17:40

Explore the complexities of contractual obligations in the case and how support is impacted.

“But I think actually, let's talk about this.”

Broadcom's Revenue Strategy and Historical Comparisons

17:41 to 20:54

Analyze Broadcom's approach to revenue generation and compare it to Microsoft's practices.

“their superpower is ambiguity, isn't it?”

Impact of Subscription Models on Customers

20:55 to 22:16

Discuss the implications of shifting from perpetual licenses to subscription models for customers.

“I mean, VMware, when they were VMware, it was after the announcement by Bracom, they intended to acquire VMware, but before the acquisition was finalized, they actually did something similar.”

Third-Party Support Options

22:17 to 24:44

Evaluate the availability and effectiveness of third-party support for VMware customers.

“if they carried on with their existing support.”
Show all 26 chapters

Migration Challenges from VMware

24:45 to 28:00

Identify the challenges and costs associated with migrating away from VMware for organizations.

“The one downside to it is that you can't get version upgrades.”

VMware's Dominance in Enterprise IT

28:00 to 28:39

Learn about the challenges Tesco faces in moving away from VMware.

“because they say they reckon it'll take them three to five years to get away from VMware.”

Precedents from Previous Cases

28:40 to 29:59

Explore how past cases like AT&T and Dutch Water Ministry relate to Tesco's situation.

“about their innovation and the way they've invested so heavily in research and development.”

Impact of Customer Support Obligations

30:00 to 31:56

Discuss the implications of court rulings on customer support obligations in software contracts.

“You know, and they sought what's called injunctive relief in law.”

Tesco's Allegations of Competition Law Breach

31:57 to 34:19

Understand Tesco's claims against Broadcom regarding competition law violations.

“But yeah, it's an interesting one, no doubt.”

Current Status of the Case

34:20 to 36:26

Get an overview of the ongoing legal battle involving Tesco, Broadcom, and Computer Centre.

“we could see software vendors reviewing how they deal with end of life for their products and services, making sure there's changes in contracts, making sure that the language is explicit and less ambiguous.”

The Role of Supply Chains in Software Licensing

36:27 to 38:39

Analyze the implications of the case for the software supply chain and vendor relationships.

“So basically, as I understand it, what a Part 20 claim is, is so it sits alongside the main action.”

Future Implications for Vendor Behavior

38:40 to 41:18

Discuss potential changes in vendor behavior and customer negotiations post-case.

“I suppose, I mean, let's be honest, I suppose part of it is pricing, isn't it?”

Legal Precedents and Their Impact

41:19 to 42:04

Explore how the outcome of the case may affect future contractual obligations in IT.

“I think it really comes down to which elements of the case are found in Tesco's favour.”

Understanding the Case Elements

42:04 to 43:19

Learn about the legal implications of Broadcom's support withdrawal and its connection to the Braganza duty.

“I think the key for me is definitely the end of availability clause.”

Advising VMware Customers

43:20 to 44:41

Discover key strategies for VMware customers to navigate licensing negotiations with Broadcom.

“What steps do you think they should take to reduce exposure to future licensing shocks from Broadcom?”

CIO Strategies for VMware Reviews

44:42 to 47:29

Gain insights on essential actions and pitfalls for CIOs during VMware reviews.

“And it's got to be something that's realistic.”

Recent Developments in the Case

47:30 to 51:07

Explore the latest updates in the Tesco v Broadcom case, including the Part 20 claim.

“So given the pace of developments in this case and the wider attention it is now attracting across enterprise IT, we felt it was important to bring you the most up-to-date position.”

Implications of Dell's Involvement

51:08 to 56:03

Understand how Dell's actions impact the broader context of the case against Broadcom.

“And it's specifically, the quote itself specifically identified Tesco as the customer, Computer Center as the reseller, and Dell as the distributor.”

Implications of Tesco v Broadcom Case

56:03 to 56:55

Explore the potential impacts of the Tesco v Broadcom case on enterprise IT leaders.

“potentially they're going to have a lot of customers wanting to revisit their renewal agreement so say well hang on a minute, you told us that we couldn't have that support and service because it had been retired.”

Barry Pilling's Insights and Contact Information

56:55 to 58:01

Learn how to connect with Barry Pilling and follow his work in IT asset management.

“Where can people find you, follow you, etc to see how this progresses and also other things around ITAM?”
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Transcript

Automatic transcript. May contain errors.

0:00Don't let Borgon control the negotiation. Bring them to the table early. Tell them what you want to see. So you want to see prospective agreements. You want to see the order forms. You want to see pricing early.

0:17This episode is slightly different from our usual format. We normally interview technology leaders about their careers and the trends shaping the industry. But today, we're doing something a little different. At BDigital, we work with organizations to manage commercial and platform risk across complex technology estates. And in recent times, enterprise IT has experienced something of a seismic moment. Broadcom's acquisition of VMware, one of the most widely deployed infrastructure platforms in the world, has had a significant global impact. With VMware embedded across so many major enterprises, the commercial implications of this acquisition have prompted serious discussion across the industry.

1:06The court case involving Tesco versus Broadcom has brought those implications into sharp focus. What may appear to be a contractual dispute raises broader questions about platform dependency, vendor discretion, and how resilient enterprise IT contracts really are when vendor ownership changes hands. Given the significance of this moment, we've created a special episode and brought in our very own expert, Barry Pilling, to unpack what this means to CIOs and boards alike responsible for commercial and platform risk. In this very special edition of the Tech Leaders Podcast, this is Mr. Barry Pilling.

1:55Barry Pilling thank you so much for coming on the Tech Leaders Podcast this is a bit weird but obviously we know each other very well but look thanks for agreeing to do this by the way that's alright thanks for having me on Gareth I really appreciate the opportunity to talk about what we're going to talk about today fantastic well for the listeners who are unfamiliar with yourself so obviously we both are part of Be Digital you're our resident expert within the domain of ITAM, especially in relation to what we're about to talk about. But if you could just sort of set a bit of context, can you talk us through a little bit about your background, how you got into IT asset management and sort of a little bit of a high-level overview of your career?

2:34Yeah, I mean, how I got into IT asset management is a bit of an odd story, actually. But I mean, I've been working in IT now for over 25 years since I left the Royal Air Force in 2000. Well, I started off with software asset management and then into IT asset management for probably 16, 17 years now. I fell into it like a lot of people did of my era and generation, just purely accidentally. I mean, I was working in data centers for a large insurance company based in Norfolk, got outsourced to a service integrator, and they were looking for someone to take responsibility for the software asset management function and I was I was casting around for a new job and I just said I said to the the recruiter said will I be able to work from home occasionally and they went yeah sure yeah I'm in there you know so why not I had an interview with with that service integrators head of UK and Ireland ITAM service or SAM services at the time um and she said to me at the time is is you know watch out it's a very steep learning curve and boy was she ever right um you know it is a very very steep learning curve.

3:40And you've been climbing up that hill ever since, Barry. Absolutely. Pushing the rock up the hill ever since. But yeah, and it's led me to some really, really great places. I've been lucky enough to work with some really huge organizations and some small organizations. I've been lucky enough during my consulting contracting career to work across most of the major software vendors. So, you know, I've been quite fortunate to get to this position with a fairly broad and deep body of knowledge across all of the major data center vendors. So, yeah. And obviously, there was the seminal moment when you joined BDigital for the second time, which was, you know, most recently.

4:23I mean, this is my first permanent job for well over a decade, apart from a brief period working for another consultancy. So, yeah, but it's been great. You know, obviously, as you say, I've worked with you guys previously before on a project basis, but actually coming in on a permanent basis has been a really good experience and helping to build up the ITAM practice here and develop more junior colleagues here has been really good, really rewarding. Absolutely. Well, it's been fab to get you on board and work with you, Barry. So can we set the context a little bit? Can you tell the listeners a little bit about VMware, the Broadcom acquisition and why that's important?

5:03Yeah, so for those that are unaware, and I'd like to think that anyone in the ITM industry or even the IT industry would be well aware of this by now. But in terms of my history of VMware, I've been working on VMware licensing for probably 13, 14 years or so now. I was asked to do a training course for Lisa about eight or nine years ago was the first course we put out for it. And I've just become a bit of an expert ever since then. It's gone from being kind of a hobby to really, I mean, it takes up most of my time now. I've got to be honest. But yeah, so obviously back in 2022, Broadcom announced that they were going to acquire VMware.

5:43It took around about 18 months to get all of the regulators because the Chinese regulators weren't happy about the potential risk of one of the world's biggest software vendors being bundled together with one of the world's biggest hardware vendors. You know, the European Union looked at it. Our own Competition and Markets Authority looked at it. But eventually, it was all signed off. So the acquisition went ahead in November 23. And then a month later, Brawcom announced a wholesale raft of changes. And the biggest one of those, obviously, was the switch from perpetual licensing to subscription licensing and the withdrawal of support for perpetual licenses pretty much instantaneously.

6:25And that's kind of the crux of what we're going to be talking about today. Absolutely. And before we dive in, I just wanted to check, is that a Tottenham shirt on the wall behind you? It is most certainly not. It is most certainly not. This is just the one shirt you can see. So that is a signed Lee Dixon Arsenal shirt. I was going to say, I thought it was Lee Dixon. I can see the number two there. But what you can't see is a Tony Adams one there. There's a Charlie George one there. There's a Patrick Vieira one there. and I've got an England shirt in my office from 1966 signed by 10 of the team.

6:56So I'm a collector of signed sports memorabilia. So for the listeners who don't know, Barry is a season ticket holder for Arsenal and is desperate that they don't throw it away this season like they did last season. But yeah, thanks for that. So look, before we get into the detail, why should CIOs and senior IT leaders care about this case at all? So, I mean, Tesco versus Broadcom is potentially a landmark case. It's the first time Broadcom have been sued in English courts. So obviously it's in the High Court of England and Wales. And obviously there are some legal precedents in this country which are maybe a bit different from the United States or on the continent in Europe.

7:41So Tesco cited, they've made some fairly far-reaching allegations. Obviously the first one, primary one being breach of contract. They've also cited breach of competition law. Now, obviously, when we talk about competition law, I'm going to be referring to UK competition law, the primary driver of which is the Competition Act 1998. So whether there's any implications in other legal jurisdictions, I don't know because I don't pretend to know anything about competition law overseas. I mean, what I will say as well, just to be very clear, I'm not a lawyer. So everything I, when we're talking about the laws, everything I'm talking about legally today is my own research.

8:17Of course. And absolutely not to be taken as gospel truth because it's possible I may make mistakes. But, you know, I've done, I do do quite a lot of sort of corporate law research when it relates to software licensing. But it could potentially fundamentally change how software vendors do business in the UK, depending very much on what the court finds, you know, which elements of Tesco's case it sees merit in and which elements of the case end up being dismissed potentially. Yeah, no, absolutely. Of course. I mean, we will come back to that, but I just go in setting a bit more context from a business IT standpoint.

8:57Can you just talk us through how virtualization became so strategically central to enterprise IT over the last sort of 20, 20 years? Yeah, yeah. I mean, I think the first thing to remember is virtualization has been around for a long time on mainframes, for example. So, you know, that's where early virtualization developed, where partitioning allowed for sort of different processes to be run concurrently on the same servers. I mean, what we call the x86 server virtualization boom. So, you know, the boom on Wintel servers came in the early 2000s. You know, senior IT people, I think, started seeing the benefits of server virtualization.

9:37So, you know, hardware resource optimization, cost efficiency, scalability, flexibility, all sorts of benefits to it. And VMware were one of the pioneers of that virtualization boom. You know, they released their first hypervisors in 2001. And then vCenter server followed a couple of years later, which gave you the ability to sort of manage multiple host servers with hypervisors running on them. It proved, I think, so popular because they put so much effort into research and development. and they were quick to market with so many of their technologies. I mean, when you look at some of the comparable technologies, I mean, Zen Server sort of first appeared in the early 2000s as well, but it's always been an open source project until Citrix purchased, I think it was Zen Source in 2008.

10:22You know, Microsoft Hyper-V didn't appear until 2008. Nutanix wasn't founded until 2009. So a lot of the other comparable technologies weren't even around when VMware was making such great strides in the market. Yeah. And I think it's just grown from there, really. It proved to be a very popular platform, and it's become so entwined with enterprise IT. I mean, honestly, and I've worked with a lot of clients over the last 16, 17 years, and I can honestly only think of one that didn't have a VMware footprint of any kind. And it was a very, very small client, a couple of hundred people mainly reliant on Microsoft 365.

11:02Yeah, it's ubiquitous, isn't it? But what I'm keen to sort of home in on is the level of dependency that certain organizations have on VMware, which is, is that a failure of governance in your eyes, Barry, or is that simply just how enterprise IT has evolved? I think it's much more the latter, to be honest. I mean, potentially we could sort of look at it now where we talk about governance a lot, especially over the last few years, and retroactively apply governance standards. But, I mean, it's probably how enterprise IT evolved. And as I say, VMware was the first to market and the quickest, and their technology has always been really, really good.

11:39I mean, even now, VMware technology tends to come out sort of head and shoulders above comparable virtualization technology. So I think it's just evolved that way. You know, strategies develop over time, don't they? And growth is often organic and piecemeal depending on how businesses grow and the technologies that are available to them at any given moment. I mean, I think in my experience, historically, large organizations have tended to keep their eggs in one virtualization basket for maybe one of a better metaphor, certainly for mission critical applications. I mean, I think in all the years I've been working in SAM and ITAM, I mean, I've seen a few organizations that have diversified their virtualization footprint, but it's only ever on a small scale.

12:24You know, you see small pockets of Hyper-V on customer footprints. You see maybe small pockets of ZenServe or whatever, but it's never on a significant scale like VMware. No, absolutely not. So let's maybe drill into the actual dispute then. So how did the dispute actually arise, Barry? What was the timeline of it? So, I mean, the first thing we need to consider is who's involved in the dispute as well. So it's not just Tesco versus Broadcom. I mean, the supply chain in this instance involves Dell as the software distributor and Computer Center as the reseller. So there's four companies totally involved in it.

13:01So, yeah, so Tesco filed its suit in July last year, and they've named Broadcom and Computer Center as the defendants in its claim. So the dispute started effectively because Tesco had a five-year enterprise license agreement with VMware, which was due to expire at the end of January, just gone. So it started in January 2021 due to expire this year. As part of the procurement of that agreement, the supermarket entered a contract with Computer Center to enable staggered payments. As the total ELA cost was, it was over£20 million. It was a huge, huge enterprise license agreement. And as part of that contract, there were some renewal provisions included, which gave Tesco preferential pricing for another four years of support for their perpetual licenses when the ELA expired.

13:49So effectively, you know, from 2026 to 2030, they should have had another four years of support. Now, just to be clear, that was in the contract between Tesco and Computer Centre. And a key part of Broadcom's defence is that, well, we never agreed that in a contract. So Tesco believed it had protected pricing for another four years, and they wanted to trigger that element of the contract with Computer Center. And basically, based on the claims and reading the legal findings, it looks like VMware was involved in the pricing for that contract and supported it. But as I say, it wasn't actually a party to that agreement.

14:29So Computer Center went to Dell, the distributor, with whom they had a contract. And in turn, they went to Broadcom to trigger this contracted rights that Tesco believes it has, only to be told by the vendor that support for perpetual licenses is no longer available. And Tesco would have to buy subscription licenses, which include support. So there is a little bit more complex than that, but that's pretty much the basic case at this stage. So obviously, the software supply chain has evolved to be in the way you just laid out. But I think actually, let's talk about this. So Tesco is arguing that if the only difference is how you pay, support should continue.

15:08Is that the gist of Tesco's case, do you think? Why is Tesco arguing that if the only difference is how you pay, support should continue? Do you know what I mean? So is that what they're saying? Is that a fair reflection of what their case is built on, Barry? Yeah, it's an interesting one. And I think this is where the discussion around end of availability is so crucial. And it'll be really interesting to see what the High Court makes of this. So Broadcom is relying on a clause that appeared in the legacy VMware support and subscription contracts called end of availability. This is the one you told me about.

15:44Yeah, so this is where the discussion around end of availability is really critical to the case. It'll be interesting to see what the High Court makes of it. So Broadcom is relying in its defense on the clause that appeared in the legacy VMware support and subscription contracts called end of availability. So basically this clause stipulated that the vendor had the right to retire any software or services at its discretion. And in its defense, finally, with the high court, this is exactly what Broadcom has said, the support Tesco wants is end of availability, so we can't offer it. Sorry. So Tesco's contention, and I'll be honest, I don't think it's unreasonable.

16:23is that said support isn't end of availability. And they're saying Broadcom simply wants customers to pay for it in a different way. So if you think about this, if Tesco moved its entire VMware estate to Broadcom subscription bundles today, what would actually be different? So they would be running the same products. They'd be running the same versions. They would be getting exactly the same support patch and upgrade availability that they got under the previous contract. So their argument is, well, how can you say something's end of availability when it's only the product skew that's changed.

16:54And that's the crux of that bit of the argument. So I suppose another way to think about it is agreement life cycles. So we've had lots of customers doing broadcast renewals at different times, and I dare say we'll support a few more through the process. So Tesco has been told that the support it wants is end of availability, right? Yeah. But there will be other customers who haven't yet been through the renewal process who will still be receiving the support that Tesco has been told is end of availability. So again, if you're providing that support to someone else purely because they're on a different life cycle with their contract, how can you say that support is no longer available?

17:30And it's not, as I say, it's not an unreasonable argument to put forward to the court. It would just be interesting, as I say, to see how the high court views that interpretation. I think a lot of these technology companies, their superpower is ambiguity, isn't it? Absolutely. It's not really built on increased overhead to deliver the service on their part like it is in other industries. SaaS is very much smoke and mirrors, isn't it? I mean, it feels a bit shady, really, let's be honest. But they've got to make money. But obviously, the margins they make is incredible, isn't it? So let's look at it from Broadcom's view then.

18:09So they are saying there's no real difference between perpetual and subscription as you've laid out. So why is that such a critical industry argument in terms of, you know, the ramifications of this case? I'll be honest, I think it's a disingenuous claim. And that's just my opinion. I just think it's a slightly disingenuous claim. Because in their legal defense, what Broadcom has said is that the offer it made Tesco for its subscriptions includes the support it wants. So effectively, what's the problem? But this brings us to another one of Tesco's complaints, which is that Broadcom's attempting to force them to purchase subscription licenses they neither want nor need, as they already have perpetual licenses.

18:48And that is the key differentiator, because obviously, with the subscriptions from Broadcom, you are paying for brand new licenses to cover an estate that you've already licensed perpetually. And you're doing that just so you can get the support that Broadcom has denied you for your perpetual licenses. So I think if there is a vendor claim that actually there's no real difference between them, I think it's disingenuous at best. But I mean, for me, I'm just citing industry precedent here. So Broadcom, I think, has gone about this the wrong way. And I think it's reflective of how keen the leadership of the company is to drive revenue from the acquisition.

19:23Because, I mean, let's not forget, VMware cost them nearly$70 billion. So it was a huge investment. Wow. Yeah. And they really do need to drive the revenue to pay for that. But let's take Microsoft as an example. So a good few years ago, Microsoft started incentivizing customers who were renewing enterprise agreements to go for Office 365 subscriptions rather than renewing support for on-premise Office, perpetual Office licenses. And the way they did it, instead of walk on where they just said, no, you can't have that anymore, you've got to do this. What they did is they offered preferential pricing.

19:58And you'll still see it on customer agreements now where they had what's called a From SA Office 365 subscription. So that basically is where Microsoft have translated the value from the perpetual license and the support the customer is paying into a cheaper Office 365 subscription. And the deal was is that you can take all of those across because that's what you currently have. And you can have that many user subscriptions. But any new subscriptions you buy will be at full price. and customers accepted that change because in their eyes, Microsoft were playing fair. They were saying, well, actually, we're going to give you some credit because you've already invested for years in that software, so we're going to make the subscriptions cheaper for you for your existing user base.

20:41And they maintained that existing price all the way through their contracts. Obviously, price might go up by RPI, but they still get the value of that from SA subscriptions, they call it. And I think that's the way Broadcom maybe should have gone about it. Yeah. But obviously, they chose not to. I mean, VMware, when they were VMware, it was after the announcement by Bracom, they intended to acquire VMware, but before the acquisition was finalized, they actually did something similar. They introduced a program called the Subscription Upgrade Program in August 2022. And what they did is they allowed customers to upgrade perpetual licenses and support for products like vSphere, vCenter, Aria Suite, that sort of stuff, to subscriptions.

21:23And again, it was for preferential pricing. So they would give you a credit against the investment you'd already made, and you would get better pricing for the subscriptions if you went that way. Now, in Borgom's big announcement in December 2023, they said at the time, and we maybe can find the link for this, they said customers would get a credit against their perpetual licenses. Now, to the best of my knowledge, no customer has ever actually been offered any preferential pricing against their existing license base. But the problem is it's really, really difficult because it's always been VMware's practice, and it is Broadcom's, now that they've acquired VMware, they don't actually break down the pricing by line item in agreement.

22:02So when they make you an offer, it's effectively that is the price of the agreement. That's the cost of the agreement. There you go. And VMware always did that as well. So where there are price increases, and Tesco have claimed that going into Broadcom subscriptions would cost them nearly 250 % more than the comparable costs if they carried on with their existing support. You can't really tell if a customer is actually getting any credit or any preferential prices at all because that price is not broken down. Yeah. I mean, it kind of feels a lot about this case is not really about licensing. It's about support being used as leverage.

22:42Do you know what I mean? Absolutely. How exposed do you think organizations whose operation resilience depends on continued vendor support? How exposed are organizations, do you think, regardless of license ownership? Do you know what I mean? So is this ubiquitous in the industry? That's a good question. I mean, it's happened. There's sort of similar things have happened before where vendors will change things. I mean, we saw, as I say, with the Microsoft example I was just given. And as a general rule, I mean, with Office 365, initially with Microsoft, they were incentivizing customers. There was never a case of you can't have support for your perpetual licenses anymore.

23:23I mean, now at the point, they don't do that. Now, I don't believe. It's been a while since I've touched Microsoft, to be honest. But there was never a case of, right, that's it. We've pulled up the drawbridge. You can't have that anymore. And I think with Broadcom, they have challenged the whole industry, really. I mean, customers are left, right, and center. And probably big enterprise customers who thought they would be with VMware for years and years and years. Let's look at the Tesco estate. In their claim they've mentioned, they have 40 ,000 VMs running on their VMware platform. And so they probably thought they would run them there forever.

23:58They support a lot of their critical business systems. And a lot of customers, well, particularly the ones that can't afford to take Broadcom to court, are now in a position where they either have to just deal with it. They have to look at ways to migrate away to an alternative virtualization platform, or in some cases going for third-party support. So it has thrown the whole industry for a loop, really. Yeah. Is there much third-party support available then, out there? Is that a thing? There's three companies, I think. Well, certainly three that I know of that offer third-party support for VMware.

24:31Yeah, yeah. Okay. I mean, I think it is good. It is really good, obviously, because I know certainly one company has a lot of ex-VMware engineers, quite a lot of ex-VMware engineers, because Broadcom made a lot of guys redundant when they bought VMware. So there are really good options. The one downside to it is that you can't get version upgrades. Once you're out of support from the vendor, any version upgrades and patches is gone. But again, in my experience, most customers run their VMware estates behind the curve anyway. We see lots of customers who are still running unsupported versions of the software.

25:11So as long as they have the patches and upgrades that they're entitled to downloaded before they come out of support, then they've still got themselves protected for quite some time. Yeah, yeah. I spoke to a local authority yesterday, like the head of IT, and I brought up this issue, and they have VMware everywhere. And he just quite nonchalantly said, well, it's fine, we're just going to get rid of it. We're just going to use something else. But that's not an option for a lot of CIOs, Barry, as it exists. No, absolutely. It's so ingrained. What are the biggest barriers to getting rid of it and replacing it with another product, then, have you seen?

25:44It depends on size and scale, doesn't it? Of course, yeah. Tesco's VMware estate, as I say, there's 40 ,000 VMs. Now, they have estimated, and again, included it in their legal filing, they have estimated it would take them between three and five years to migrate completely away from VMware, which actually, again, I don't think is unreasonable because when you're running a lot of mission-critical applications, for example, with Tesco, VMware underpins all of the software that power their tills. So if you can imagine if there was a problem on that front and all their tills went down, that would cause so many potential issues for them as a supermarket.

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26:19Yeah, of course. I think it does depend on size. I mean, Gartner did some research last year or the year before where they suggested it could cost anything up to$2 ,000 per VM to migrate, depending on alternative platforms you're looking at, how they were licensed, how big your estate was, how much you had to re-engineer your applications on a new estate, all that sort of stuff. But if you apply that, I mean, as I say, they said between$200 and$2 ,000. So even going for the worst case figure,$2 ,000 per VM for 40 ,000 VMs is a lot of money. Yeah. You know, so, yeah, I mean, I think for the bigger customers, it is difficult.

26:59I think for smaller customers, you know, it's less of an issue. It's more realistic. And I think I've also seen some customers as well that will take like a one-year renewal just as a holding position and then use that year to get themselves away from VMware so they don't have to renew again. Yeah, so just correct me if I'm wrong here, Barry, but VMware is a pretty dominant player in the global virtualization market, isn't it? I've read 50 % to 70 % of the marketplace. Is that realistic? Is it something like that, would you say? It's difficult to say, and it is. The dominance in the market is really important to Tesco's case.

27:35I would say, yeah, somewhere. I've seen most analysts put it somewhere between 50 % and 70%, so I don't think that's unreasonable to say that. I mean, I would argue that that's probably going down a bit now because the customer's leaving VMware thanks to what Morgan have done. But that's where I was going with it was, you know, How much is market dominance a factor in this case compared to a normal licensing dispute? It's potentially enormous, potentially enormous, because of the fact that Tesco probably feel a little bit trapped, because they say they reckon it'll take them three to five years to get away from VMware.

28:10I think, you know, as I say, their ELA resute expired January 2026. I recall reading in the filing that they tried to execute their four-year extension, they believe they had 18 months prior. So it's not like they left it to the last minute. It was a good 18 months to two years before the end of the agreement when they tried to execute the extension. And obviously already, by their own estimation, that's not enough time to get off of VMware for them. So VMware's dominance, I mean, it comes back to what we were saying earlier about their innovation and the way they've invested so heavily in research and development.

28:45they have ingrained themselves as one of the world's most critical enterprise IT applications or software platforms, you know. Yeah, of course. I think it's a really, it is a huge factor because obviously Tesco looking at it going, well, we don't really have many alternatives or any alternatives. Whereas normally with a software vendor and a license and dispute, if you're unhappy, generally speaking, there will be an alternative available. It might take you time to get away from it and re-engineer depending on what the software is and who the vendor is. But I would say, I would argue, it's probably easier than having to replatform your entire virtual server estate.

29:22So what kind of precedents have been set on this? Do you know much? I know there's been cases previously, you know, overseas with AT &T in America, the Dutch Water Ministry in the Netherlands. What do those cases tell us, Barry, about this? How does it impact this case? Yeah, I mean, the AT &T and the Dutch Water Ministry cases are actually reasonably similar to Tesco's argument. I think AT &T, I think, were actually the first company to sue Borgon. And their case was very, very similar to Tesco's. They alleged breach of contracts by Borgon. They said that Borgon failed to honor their renewal rights for support on perpetual licenses.

29:59They also claimed that the shift to subscription licensing and the price increases resulted in an anticipated increase in costs of around about 1 ,000%, which is horrifying when you think about it. You know, and they sought what's called injunctive relief in law. So basically, I just wanted to force Broadcom to provide them with the support they wanted. The case was eventually settled out of court, but it was a confidential settlement. Now, I don't know what the law around that is in the United States or even the state concerns. And I don't know whether that will happen here because I'm not quite sure how that works.

30:37But it was a confidential settlement. So it was all kept very, very quiet. I suspect that was at Broadcom's request to try and head off further cases potentially. But the best guess, I think, is that there would have been some form of compromise between the two, and AT &T probably got a lot of what it wanted. Otherwise, they wouldn't have dropped the case, I don't think. So the Dutch Water Ministry's case, again, very similar. The projected increase in cost was a lot lower. It's something like 85%, 90%, I think. but the court in that case compelled Brokong to provide two-year support to the Dutch Water Ministry for their perpetual licenses.

31:14I think the key factor as well is they also imposed a potential penalty if Brokong refused to do it. So I think it was€250 ,000 per day and it was capped at€25 million. So if Brokong refused to actually do what the court had ordered, there was a penalty imposed upon them for doing that. So I think both these cases indicate a precedent that courts are taking customer sides over support obligations. It remains to be seen, I think, whether the High Court in England will view the contractual relationship we've talked about, so the contract between Tesco and Computer Centre, and whether Brawcom actually has any obligations in that area in the same way.

31:56So we'll see how that goes. But yeah, it's an interesting one, no doubt. Do you expect similar cases to emerge after this one then? Do you think we're going to see a lot of this over the next couple of years against Broadcom? Or do you think this is going to set a precedent that's going to shape things going forward? It's an interesting one, isn't it? I think it depends what elements of the case the High Court finds merit in. I mean, let's be honest, primarily Tesco are mainly interested in getting injunctive relief from Broadcom to give them the support they think they're entitled to. That is the primary element of their case.

32:34But I think depending on how the court finds on the various aspects, it could set some very compelling precedents that could potentially impact software vendors and customers with some really far-reaching consequences. I mean, as I say, we haven't really talked about it much so far, but Tesco have also cited breach of competition law. I won't go into that in depth because it is quite a challenging in area of law. Just maybe give us a high level explanation of what you're talking about, Barry. The two bits that they've alleged. So firstly, in the Competition Act 1998, there are a couple of sets of prohibitions called the Chapter 1 and Chapter 2 prohibitions.

33:12So Chapter 1 prohibitions basically prevent companies from colluding to price fix. And Tesco have alleged that that's what happened with Computer Center and Broadcom. Although they have actually said we have no knowledge of their exact contractual relationship and how things work between them. And then the other thing, the Chapter 2 prohibitions, which I think is the more interesting one, is abuse of a dominant market position. So Tesco are accusing Borgom of taking advantage of their dominance in the market to charge customers who have very little choice in the matter some eye water in price increases.

33:46So, again, I think, I mean, I'm not a legal expert, but I think there's potential merit in the latter one due to the size of the market share that VMware currently holds in the virtualization market. So I think it depends what happens. But if the High Court does find that Broadcom have breached competition law, and that is a big if, I mean, it potentially opens up Broadcom to an investigation by the Competition and Markets Authority. So there could be some far-reaching consequences there. I think the bigger one is the end of availability. You know, if the court finds in Tesco's favour on end of availability, we could see software vendors reviewing how they deal with end of life for their products and services, making sure there's changes in contracts, making sure that the language is explicit and less ambiguous.

34:33And also, we could then see if the high court says, yeah, actually, Borgom, you can't use that end of availability clause. That doesn't say what you think it says. We could find a lot of customers who've already gone through renewals coming back to the table, Bork, I'm saying, right, hang on. Yeah. You've sold us this agreement on a false pretense. So we want some form of we don't want that. We want money back for that. And we want support for our perpetual licenses. And I think it will also have a potential impact on supply chains. You know, again, if the court finds in Tesco's favor, we could see much more caution in contracts between vendors, distributors and resellers.

35:08And the layer of assurance of contractual terms for the customer are reflected all the way down the chain, which doesn't appear to be the case. And I say that without having seen any of the contracts between them all, but that doesn't appear to have been the case because, you know, Tesco are saying, well, we had this contract with Computer Center, and I think VMware played a role in it, but they were not a party to the agreement, and Borgom are denying that they ever had an agreement in place that obligated them to provide that additional four-year support. So where is the case right now, Barry, and what are the sort of plausible next steps?

35:41So at this stage, we've got four companies effectively standing and pointing fingers at each other. So there's four companies basically doing that. So Tesco filed its action last summer against Broadcom and Computer Centre. In October, both Broadcom and Computer Centre filed their defences. Computer Centre's defence is largely, it's not really our fault because we were compelled to act in the way that the vendor decided and the distributor told us. Broadcom's defence is pretty much, no, it's all nonsense. We don't accept any of this. I mean, some of it they've admitted to, but they haven't admitted to breach of contract.

36:16They haven't admitted to breach of competition law. And as I say, they continually rely on the end of availability clause in their defense. So that's where that is. But also what Computer Centre have done is filed what's called a Part 20 claim against Dell. So basically, as I understand it, what a Part 20 claim is, is so it sits alongside the main action. and if you are a defendant in said action, then the defendant in your Part 20 claim, basically, if the main action is found against you, you can then pass any relief that you're obligated for onto them. So what computers under a base is saying, well, it wasn't our fault.

36:52We only acted in the way that Dell told us was possible. So if you find against us, High Court, it's not fair that we pay, that should go to Dell. And I think Dell filed their defense for that in December and then in January, Dell have now done exactly the same as Computer Centre, so they've filed a Part 20 action claim against Borgon. So what Dell are now saying, exactly the same as Computer Centre, that if the main case goes against them and Computer Centre get away with passing their obligation on to Dell, Dell should be allowed to pass their obligation on to Borgon because they acted in the way that Borgon told them to.

37:25So, I mean, effectively, if it's all successful, what we're effectively saying is that, you know, All the injunctive relief will be passed on to Borgom and the reseller and the distributor will have no part of it. Which, again, you can sort of understand that because Dell basically, they were told by Borgom that support's not available, so they did what they were told. They passed that on to Computer Centre and Computer Centre said, well, we can't honour that contract because we've been told by the distributor that it's not possible. Yeah, but in an era where the middleman is slowly in some cases getting phased out and there's a lot more direct to manufacturer, direct to vendor purchasing these days.

38:04I mean, surely this shines a light on an unnecessary supply chain, unnecessarily long supply chain. I mean, you've got the vendor to the distributor to the reseller to the end customer to the consumer on the license. Do you think people will look at this and go, do you know what, they're not adding much value. Let's just sell directly to end customers. What is the point of these middlemen? Do you think it's going to accelerate this trend, do you think, in the software industry? It's a possibility. It is a possibility. I mean, me personally, and I'm going to be controversial here, I've never seen the point of the channel anyway.

38:40I suppose, I mean, let's be honest, I suppose part of it is pricing, isn't it? Yeah, of course. Because obviously the distributors as wholesalers buy licenses in bulk. It's because there's so much margin, Barry. That's what it is, isn't it? Yeah, you're right. You're right. But, I mean, if a vendor – I mean, and you can buy directly from vendors. So, for example, VMware used to have an online store where you could go and buy their products at this price. But obviously that was geared more towards low-level purchases if you wanted a couple of copies of vSphere, for example. And Microsoft, you can go and buy licenses direct from Microsoft.

39:11So it is possible. I think for volume purchasing, though, there will continue to be a channel market because, as I say, I mean, by guaranteeing the orders, Broadcom will offer better discounts to the distributors who will then offer better discounts to the resellers, who can then offer better discounts to the customers. So I think it will probably stay in place purely for pricing. Yeah, there are other benefits of going through a reseller and a distributor. I'm just being a little bit, I'm just joking around a little bit. Yeah, being a bit of a contrary, not like me at all. But yeah, I mean, it is definitely going to shine a light on this though, I think, isn't it?

39:49Yeah, absolutely. And I think the back-to-back contractual relationships particularly. Did you expect to see more organizations challenging vendors or possibly resellers more openly? Or will sort of most absorb the change quietly, do you think? It's an interesting one. I think the fact that Broadcom has taken this approach sort of speaks volumes about how confident vendors are in this space. I mean I don't think that even if the court finds in Tesco's favour I don't think it's going to lead to a change in vendor behaviour quickly I think if Broadcom loses case you would expect them to appeal the ruling so it could drag on for quite some time because you think about it above the High Court you've got the Appeal Court and if that rules against Broadcom they could potentially take it to the UK Supreme Court whether they would or not I don't know but it is a possibility you know so but it might just be the case that all tesco want from broadcom is support for long enough just to enable them to migrate away and if they get an offer to that they may just drop the rest of the case so right that's it we're done you know and then broadcom will just carry on doing what they've been doing so they may well let it go not appeal it they might be happy with that just say okay because at the end of the day if the court does find in tesco's favor and tesco get the support they wanted broadcom is still being paid for it just not the amount of money they originally quoted.

41:12So they're still getting paid. So let's see what happens. I don't think there will be any quick changes. Whether other customers will challenge vendors, I think it's a possibility. I think it really comes down to which elements of the case are found in Tesco's favour. I think the end of availability, if the High Court decides that that is actually correct and, you know, Borkon can't rely on that clause, I think that could lead to a lot of customers coming back to the negotiating table of Broadcom saying, right, in the light of that ruling, we're not happy about this. So let's see what happens, I guess.

41:48Yeah, of course. So Barry, if the court sides with Tesco, what does that unlock for sort of CIOs and organizations in future negotiations? So I think it really depends, as I say, on what aspects of the case the court finds in Tesco's favor. I mean, I suspect there will be elements of the case dismissed, but I wouldn't like to speculate on which ones. I think the key for me is definitely the end of availability clause. If the court finds that Broadcom has unreasonably and unfairly withdrawn support, and that comes back to a legal precedent known as the Braganza duty in English law. So it was set up and it was based on a ruling by the Supreme Court about 10 or 11 years ago in an employment law case, actually.

42:28But basically what it means is that where one party to a contract has the discretion to change elements of the contract, they must exercise that discretion in a reasonable way and in a fair way. And I think Tesco would argue that them suddenly saying that the support is end of availability and modifying the meaning of that clause is not in the spirit of the Beganza duty, as they call it. So I think if the court finds that Tesco's claim has merit in that regard, as I say, it could open up a lot of organizations coming back to Broadcom and telling them that, well, naturally, we're not very happy.

43:04You told us we couldn't have this. The court has now found that you telling us was incorrect and unfair. So we want support. So it could have some really far reaching consequences for Broadcom. If you were advising a VMware customer now, and I know obviously every organization is different, but in general terms, what would you sort of advise them? What steps do you think they should take to reduce exposure to future licensing shocks from Broadcom? It's all about ITAM maturity, isn't it? You know, I mean, most organizations that have mature SAM and ITAM practices. And that's where BDigital come in.

43:42Absolutely. We can help that. We can certainly help there. But I think most organizations that have mature in Salmon Item, if they have a good level of governance around the software, commercially astute enough, certainly with Broadcom, begin the negotiations early. There's no reason to think you can't get an equitable deal. Negotiating with Broadcom, it's like any negotiation. You have to ask yourself, what's your BATNA, as they call it? What's your best alternative to a negotiated agreement? and then you have to make sure you have enough time available to execute that alternative if you don't get the deal you want because that's the way you get Broadcom to offer you maybe the pricing or the deal that you want.

44:25Obviously, if you do move away from Broadcom, it could potentially lead to audience. But again, if you're mature and confident in your position, you've got nothing to fear from that. And I think that lesson can be applied to all software vendors. It's all about start early, make sure you have an alternative. So if you can't get the deal you want, what are you going to do about it? And it's got to be something that's realistic. And it's got to be a threat that the vendor will take seriously. Otherwise, they'll never offer you preferential pricing. Now, with Broadcom, you could say to them, if we don't get the pricing I want, we're going to walk away.

44:55We're going to go third-party support. We're going to migrate to a new platform, whatever. So it's key that you have the time to actually execute that change. Yeah, absolutely. That makes total sense. It's rational. Can I just put another spin on that, though, as well? If you were advising, let's say, a CIO or a head of IT or a senior manager within an organization who was starting a VMware review today. What would you tell them to do and what would you tell them not to do? So what I would tell them to do, firstly, is be all over your estate. Now, I mean, one of the great things about VMware is VMware admins are generally all over their VMware estates.

45:34They know what the estate looks like. It's actually relatively easy to get data on your estate as well. There are tools out there that enable you to quickly gather data. But make sure you're all over it. Make sure you know what your roadmap is. You know, how entwined are you with VMware as a platform? How important is it that you keep that platform? And then make early plans. So get on it early. Get all over it. And in terms of actually when it comes to like shaping the estate, I mean, we always recommend optimizing workloads where possible as well. I don't think I've ever seen a customer of VMware estate that didn't have ESX host servers sitting there largely doing nothing.

46:14And we always say, look, if that host isn't really running huge workloads, why are you not consolidating your VMs? Because you're licensing it on physical calls when you move to Broadcom. So the fewer hosts that you have, the lower your renewal costs are going to be. So seriously, look at optimizing your estates. And in terms of what not to do, firstly, don't let Broadcom control the negotiation. Bring them to the table early. Tell them what you want to see. So you want to see prospective agreements. You want to see the order forms. You want to see pricing early. Now, Broadcom will say to you, well, we can't do pricing until you've given us some data to show us what your estate looks like.

46:53That's fine. What they will do is ask you for RV Tools data. So for those that don't know, RV Tools is a free tool that you can run against your vCenters, and it gives you every single bit of information conceivable about your VMware platform. So you don't want to give Broadcom that because, you know, it could have data in there you don't want them to see. It could have confidential data in there you don't want them to see. Sure. But all you need to give them is details of the servers and their core counts and their geographic locations to enable them to apply the licenses correctly. So only give them the data that they actually need.

47:24and obviously if you're not sure what they actually need, come and speak to some specialists like us and we can help you with that.

47:35So given the pace of developments in this case and the wider attention it is now attracting across enterprise IT, we felt it was important to bring you the most up-to-date position. So we reconvened with Barry to record a short additional segment covering the latest developments, including Dell's Part 20 claim, what that actually means in practical terms, Broadcom's response, and how this may influence the direction of the case. So what follows is that updated discussion reflecting on where things currently stand.

48:13So Barry, with Dell now filing a Part 20 claim against VMware, does this move the case beyond what initially looked like a dispute with a single customer? I mean, I think before we actually ask that question, what we need to do is just examine what a Part 20 claim is, because we kind of touched on it in the other element of the podcast we recorded. So basically, in English civil law, in the rules of civil procedure, a Part 20 claim is basically if you're being sued and you believe that another party has the liability. So, for example, if the reason you're being sued wasn't something you could do much about because you're beholden to another party, then effectively you can file a Part 20 claim, which really puts the liability, if any liability is found against you, it puts the liability onto that party, provided the court agrees with your claim.

49:07So in this instance where we have, for example, Tesco have sued Computer Centre and Broadcom, Computer Centre said, well, actually, it wasn't our fault that you couldn't get that support. That was Broadcom's decision. But they then have to go to the next party in the chain, which is Dell. So they filed a Part 20 claim against Dell. Dell have in turn now filed a Part 20 claim against Broadcom saying, well, you know what, this isn't actually our fault. This is Broadcom's fault because we're all beholden to Broadcom in this process. So I don't think it's ever, once Tesco sued Computer Centre, I don't think it was ever a sort of just a straightforward commercial dispute because there's so many moving parts, so many elements to this as well.

49:49I mean, I think it's the first time a reseller has been a co-defendant in the many cases that have been filed against Broadcom internationally. And as we said previously, this is the first one that's actually been filed in the High Court of England and Wales as well. But I think Computer Centre and Dell have made it more complicated by ensuring that all parties in the supply chain are now involved legally. So it is quite a complex situation now. Absolutely, it is. Yeah, of course. So given Dell's role then as one of VMware's largest distributors, does its involvement add weight to the fairness argument, or is this still largely about how the contracts have been drafted?

50:29I think it's a little of both, being completely honest. One of the most interesting aspects of Dell's case against Broadcom is that they have now effectively taken Tesco's side in the argument. In Dell's claim, they basically accused Broadcom of not honouring a quote that VMware sent to them, which specifically included the additional four years of support that Tesco has claimed it's entitled to. So in its filing, Dell's mentioned VMware's authorised distributor partner programme, of which it was a part, and the agreement that governed it. So we'll just call it the ADPA, ADPPA. So, you know, it's a bit of a complex one.

51:05So according to Dell, the quote is governed by the terms of that partner agreement. And it's specifically, the quote itself specifically identified Tesco as the customer, Computer Center as the reseller, and Dell as the distributor. And it also apparently is noted as a final quote and includes a schedule of all services agreed between VMware, Tesco, and the supply chain. So Dell's contention is, therefore, that this created a contractual obligation on VMware to deliver all of the quoted services, and Broadcom has breached it. So I think it adds a lot more weight to the whole fairness element of the case that Tesco's made.

51:44But at the same time, it is still effectively. I think this whole case could see a major shakeup in the way contracts are drafted between the parties in the supply chain. So in your humble opinion, Barry, has Broadcom's response changed the tone or the direction of the case in any meaningful way? I'm glad you said humble. I do try to be. Honestly, not really, I don't think. I mean, Broadcom has continued to deny any contractual link between itself and the additional four-year support that Tesco have requested. They're also continuing to rely on the end of availability clause, which we've touched on previously, which I don't actually think covers them the way they think it does.

52:29And they've stuck to that defense throughout everything, all of the proceedings so far, all of the counter suits, the part 20 claims and whatever. So I don't think they'll move away from it now. Yeah, no, I agree. But sort of taking a step back then, is this becoming a broader challenge around market power and licensing control? or do you think it just remains a typical commercial dispute? I think it's got the potential to cause a huge ripple effect across the software licensing industry. It's one of those that could cause huge problems. And it's interesting as well, actually, because Tesco in there, I think it was in their response to Broadcom's defence, cited all of the cases that have been filed against Broadcom internationally as an example of their behaviour in this regard.

53:15So I think potentially that's now introducing all of those cases to the high core. And Tesco is saying, we need you to consider these as well as an example of where Broadcom are really trying to cause problems for their customers. So then you think about it, firstly, you've got the competition element. Now, Tesco has now dropped its claim around the Chapter 1 prohibitions of the Competition Act, which, if you remember, is the element that bars collusion between companies on the same level in a supply chain, price fixing, all of that sort of stuff. So Tesco said, OK, in light of further evidence received in computer sentence defence, we're dropping that.

53:52But they're continuing to push on the Chapter 2 prohibition, which is the one that bars abuse of a dominant market position. and Tesco's argument is that you know the renewal quote they had from Broadcom was nearly 250 % higher than the cost they should have been paying under the four years support they're entitled to you know and given the fact Tesco got 40 ,000 VMs on their VMware platform and said it could take us three to five years to get away from this and Broadcom know it could because it's also business critical they're arguing and it is hard to argue that that's not abusing their position because they know they've got Tesco locked in as a customer.

54:31And then to give them a quote, which is just such inflated pricing, you know, it's a really interesting argument. And I think it's quite a strong case as well. But that's me speaking, and I'm not a legal expert, but it's just the way it looks to me from reading all of the filings. And then secondly, I think it's the end of availability as well. So, I mean, Tesco's claiming that Broadcom have not actually retired any services, which again, when you look at it logically, they haven't. what they've done. It doesn't matter whether you've got perpetual licenses with legacy support or you've now transitioned into subscriptions, you're getting the same support for the same platform.

55:07If you renew your agreement at that point, you're not actually fundamentally changing the support you're getting. They still continue the support. They're just changing the way that you pay for it. So Tesco are arguing that actually it was a commercial decision to repackage the services. It's not an end of availability. It's not a retirement. And it is really hard, again, to argue against that when you read the end of availability clause that Broadcom is actually relying on. And I think if the High Court finds in favour of Tesco on either or both of those points, I think it's going to leave Broadcom with a lot of problems.

55:41Because, you know, if the court does decide that Broadcom have breached competition law, then obviously the Competition and Marketing Authority have got the Competition and Markets Authority. sorry, you would think logically speaking they have to get involved and investigate why they've breached the Act. And then the other side of it as well is if the High Court agree with Tesco's claim that the end of availability doesn't mean what Broadcom say it does, then potentially they're going to have a lot of customers wanting to revisit their renewal agreement so say well hang on a minute, you told us that we couldn't have that support and service because it had been retired.

56:17The High Court has now said that you're talking nonsense, so what are you going to do about it? So it could leave Borkham with a lot of problems. I mean, I would say as well, obviously, because this... A can of worms springs to mind, Barry, doesn't it? I would argue as well for any international listeners that this will probably only apply to England and Wales because that's where the jurisdiction is for this particular hearing. But again, it could have ripple effects out to other jurisdictions depending on competition law and their rules of civil procedure, for example. Barry that is the perfect place to end this this conversation thank you so much it's been really it's been brilliant I think I've learned a lot and I'm sure the listeners have as well so thanks for talking us through the main elements of this of this intriguing case we will watch and listen out for what what what unfolds before us as this comes to a conclusion but look thank you so much, Barry.

57:14It's been great talking to you. Where can people find you, follow you, etc to see how this progresses and also other things around ITAM? Where can people reach out to you and find you? So you can always reach me on LinkedIn. LinkedIn.com forward slash IN forward slash Barry Pilling or just search my name. It's a fairly unusual name. So generally if you search me in the UK, you'll find me fairly quickly. Or obviously come and look at our website to see what services we can provide, bdigitaluk.com. Absolutely. And you recently did a video with Computer Weekly, didn't you, with Cliff Saron, and I know he references you in a lot of his articles.

57:53Another great source to stay up to date with this case. But, yeah, thanks so much, Barry. Thanks for coming on the Tech Leaders Podcast.

58:08Thank you for listening to the Tech Leaders Podcast. we'll be back very soon with one of our more conventional leadership focused episodes but in the meantime if your organization is navigating VMware exposure facing licensing pressure or simply wants a clearer understanding of its commercial position please feel free to get in touch with us at b digital we're always happy to have a conversation and where appropriate to connect you with one of our specialists if you found value in this discussion please don't forget to subscribe and also share with others in your network who you think may benefit it really helps us reach a bigger audience and bring you more amazing guests in the future thank you so much for joining us

From the publisher

This episode of The Tech Leaders Podcast takes a different format from our usual leadership interviews. 

The recent acquisition of VMware by Broadcom has sent significant ripples through the enterprise IT landscape. As one of the most widely deployed infrastructure platforms in the world, VMware sits at the heart of many global technology estates. The commercial changes that have followed the acquisition have prompted widespread discussion across the market. 

The ongoing court case involving Tesco and Broadcom has brought those issues into sharp focus. What may appear to be a contractual dispute raises much broader questions around platform dependency, vendor discretion and how resilient enterprise IT contracts are when ownership changes hands. 

In this special episode, Gareth Davies is joined by licensing specialist Barry Pilling to unpack the case, explore the latest developments, and discuss what it could mean for enterprise software licensing and commercial governance going forward. 

For CIOs, technology leaders and procurement teams responsible for major vendor relationships, this conversation looks at the wider implications, and the questions organisations should be asking right now. 


Timestamps: 

  • Introduction and Barry’s Background (2:04) 
  • VMWare and the Broadcom Acquisition (5:00) 
  • The Rise of Virtualisation (8:50) 
  • The Tesco Dispute Background (12:38) 
  • Organisations Exposure to Licensing Risk (22:45) 
  • Other Broadcom Cases (29:22) 
  • Death of the Middleman? (37:51) 
  • Potential Consequences and Advice for VMWare Customers (41:49) 
  • Recent Developments (47:30) 

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