Computacenter enters the fray against Broadcom in Tesco's VMware lawsuit

Computacenter has filed its own claim against Broadcom and Dell as part of a wider lawsuit brought by Tesco.

Last month, the supermarket giant announced plans to sue Broadcom for £100 million over VMware licensing contracts. Broadcom bought VMware in 2022 for $61 billion, sparking a backlash from its own customers by changing licensing terms in a way that led to price increases for many.

Tesco said via court filings that the licensing changes led to prices it paid for VMware software to jump by 237%, accusing Broadcom of refusing to negotiate and taking advantage of its market dominance to hike up prices.

So what does any of this have to do with Computacenter? The IT reseller was pulled into the lawsuit as a defendant, because Tesco got its licenses for VMware via Computacenter.

As spotted by The Register, Computacenter has filed a legal claim against both Broadcom and Dell. Court filings seen by the publication noted that Computacenter used Dell to distribute VMWare software, and in 2021 quoted Computacenter for subscriptions for Tesco to use VMware's Tanzu Basic and Tanzu Mission Control for five years with an extra four years of support.

Computacenter is suing for damages if Tesco wins because it hasn't supplied those services at the prices quoted, despite the agreement, and Dell for breaching its contract. Dell told the publication that because of "the changes within VMware and actions by Broadcom" it couldn't fulfil the promised renewals at the pricing.

The Register also noted that Broadcom has filed documents in its defense against Tesco's initial suit, saying it can't deliver products it doesn't sell anymore, among other claims.

VMware upheaval

The lawsuit from Tesco is just one complaint of many from VMware customers after Broadcom overhauled the virtualization giant's licensing structure post-acquisition.

Broadcom said the changes were designed to "streamline" its partner program, and led to fewer companies able to resell VMware products. Critics, meanwhile, have said it appears Broadcom is focusing on larger players.

In response, the Cloud Infrastructure Services Providers in Europe (CISPE) has essentially called for the acquisition to be reversed, with its own research showing some prices have gone up by between 800% and 1,500%.

That trade body said new agreements were "often signed under significant pressure", adding: "Consequently, while Broadcom has succeeded in transitioning VMware customers to its new licensing framework, these customers continue to face substantial financial burdens and operational disadvantages due to the imposed terms."

While CISPE warned that some customers remain locked into the VMware ecosystem, rivals have started to launch competing solutions, including Pure Storage, NetApp, and HPE's VM Essentials.

In the meantime, CISPE has called for Broadcom to restore fair licensing by offering advance notice of six months or more to contractual or pricing changes, offer transparent pricing with no penalties for over or under use, and have agreed charges for peak usage.

If that doesn't happen, CISPE called for regulatory action against Broadcom's "harsh, exploitative practices" — if that happens, we could see further trouble for Broadcom beyond the legal cases brought by Tesco and now Computacenter.

ITPro approached Computacenter, Broadcom, and Dell for comment, but had not received a response at the time of publication.

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