Twist in Tesco vs. VMware case as Computacenter files claim against Broadcom, Dell

Tesco’s lawsuit against VMware has taken a twist, with Computacenter filing a claim against Broadcom and Dell. As The Register reported in September, Tesco sued VMware’s new owner Broadcom and Computacenter for not honouring a contract that gave the supermarket giant the option to acquire software at pre-determined prices and …

[Anonymous Coward]

Awww, poor Broadcom

Not, really..

:)

[Anonymous Coward]

Re: Awww, poor Broadcom

A resource rich end -User that won’t cower in the face of Broadcom’s aggressive Bully-Boy Business tactics. Hurrah!!

Shame it’s Tesco who do the same to its customers in the face of inflation, offloading of businesses like Tesco Bank Credit Cards and constant reneging on Clubcard customer commitments - Boo, Hiss!!

[xyz]

Broad con

They're not really doing themselves any favours are they?

[EvaQ]

Re: Broad con

LOL @ "Broad con". Nice!

[cd]

Re: Broad con

With all the Broad cons

[big_D]

Re: Broad con

We've given up and are moving on...

[Richard 12]

Not really a twist

Broadcom appear to have decided they can break any and all contracts at will.

And yes, of course Tesco do not see Broadcom as a long term partner, because Broadcom have repeatedly proven they are not willing to fulfil long term contracts.

Tesco would have been insane to seriously consider signing a seven-year contract with the same supplier who just broke a five year one.

[Anonymous Coward]

Re: Not really a twist

"Broadcom appear to have decided they can break any and all contracts at will."

The overriding provisions of the US TACO Act ?

Broadcom can hardly claim force majeure to void its contractual obligations, I would have thought.

[Alan Brown]

Re: Not really a twist

"Broadcom appear to have decided they can break any and all contracts at will."

Which marks them as an "unreliable supplier" and will be costing them in terms of lost sales where people won't even bother dealing with them in the first place

It's hardly the first time a giant has torpeoed its own business model and gone out of business as everyone leaps to another provider

[David Hicklin]

Re: Not really a twist

> Tesco would have been insane to seriously consider signing a seven-year contract

Which gives them time to move to an alternative

[dipole]

Re: Not really a twist

We are removing them from our organisation. Not sure exactly how we will transition off a few of the harder scenarios but we are dispensing with their services. No more revenue from us.

[EvaQ]

Lawyers will love this

What a mess. Lawyers will love this ... enough hours to bill.

[wolfetone]

Re: Lawyers will love this

Do you think they'll give Tesco two prices?

A highly inflated one, but then if they happen to have a loyalty card for said lawyer, it magically loses 40%?

[Korev]

Re: Lawyers will love this

Every Little Helps

[Tubz]

Broadcom killing itself slowly, one contract at a time.

[ecarlseen]

Is Broadcom even suffering?

Everyone who has been paying attention knew what was coming if they purchased VMware, and a lot of organizations either decided to ignore history.

It looks like Broadcom is coming out ahead on this because not enough customers jumped ship when the ticket prices doubled (or more) mid-cruise. Sure, people can sue and maybe even win, but even if they win, it's not like they're going to have anything resembling a good vendor/customer relationship. Any support they get is going to suck ass.

The smarter move would have been to get off at the next port, cut your losses (the sunk cost jokes write themselves), and never go back. If enough customers had done this, Broadcom would lose money on the deal. But plenty of companies would rather pay lawyers and fight to stick with someone who doesn't like or respect them.

[I could be a dog really]

Re: Is Broadcom even suffering?

But plenty of companies would rather pay lawyers and fight to stick with someone who doesn't like or respect them

That's one interpretation, another is that to switch to a different tech stack is non-trivial and takes time and resources - how many times have we seen articles about such migration projects going wrong, and in retail, the Walmart-ASDA divorce comes to mind as a prime example. So I suspect in many cases it more a case of "we can't migrate fast enough, we need the existing supplier to support the systems until we're done".

In Tesco's case, it looks like they contracted based on assurances about future support availability - but Broadcom have decided they don't want to honour the contract. I think it's a safe bet to assume they have a plan that involves not using VMware long term.

[Anonymous Coward]

Re: Is Broadcom even suffering?

And quite likely not very long term either.

They are big enough to just try to get a refund (damages) for being mucked about, and exit asap anyway.

They are also big enough to do it to try and make an example of Broadcom, and discourage the next big tech dickheads that think they'll try this because Broadcom got away with it (i.e. all of them).

[Anonymous Coward]

Re: Is Broadcom even suffering?

I think if Tesco win adding to the Dutch win there maybe an opening for a class action damages suit here just to shake some money for losses suffered.

[Dwarf]

Support costs

The Register understands Broadcom may have another motive, as sources tell us the company finds it very difficult to profitably provide extended support.

All support costs money, as it takes people with experiece. You would have thought that any software company would be able to factor this into the price of a product and also recognise that not everything is route to making money. Sometimes its about keeping the customer happy by ensuring that what you sold them, actually works as advertised.

You would also hope that as a product matures, the need for support would diminsh as there are less bugs to be encountered in the first place.

[Lord of Fries]

Re: Support costs

Also I was under the impression the VMware was doing very well before Broadcom entered the picture.

Broadcom went for its clients wallets like a leach, I just hope Tesco sues them for the full extent of the law!

[Alan Brown]

Re: Support costs

"All support costs money, as it takes people with experiece"

Not providing support can cost even more money, as customers take their business elsewhere - permanently

I'm aware of cases where particular execs have been blacklisted by customers and any new company they show up at gets dropped in the "Don't do business with" bucket

[Michael Strorm]

Re: Support costs

I'm not sure whether this is *exactly* an example of that, but I do know that McDonalds dropped Heinz as a supplier after Heinz hired the former CEO of Burger King as its new head.

[Roland6]

Re: Support costs

So McD were unable to find anyone with suitable experience to offer Heinz, hence threw their toys out of the pram when Heinz went to the market and found someone…

[Michael Strorm]

Re: Support costs

I'm pretty sure it's not McDonalds' responsibility to headhunt on behalf of Heinz, though...!

I'm not familiar with the background details of the case, or why McDonalds apparently felt strongly about this one in particular. Maybe they had a legitimate interest in not having someone who might still have been close to his ex-employer (and their biggest rival) being closely involved with their business and they'd let Heinz know that in advance.

Maybe there were personal politics involved, maybe not. This is all speculation on my part- I'm in no position to judge whether they simply threw a strop and chucked their toys out of the pram as you suggest, but given that large corporations usually don't respond *this* strongly to job-jumping CEOs, I wouldn't automatically jump to that conclusion.

[anonymous boring coward]

Re: Support costs

That sounds more like petty revenge. Not that I care what sugary condiment they want people to put on their excuse for food.

[harrys]

the laws become an ass

broadcams legal division is their essential department for staying profitable... even so more then the engineering and sales

the shareholders know it too, expect this department to continue its track record of success as in previous years

[Nick Ryan]

Re: the laws become an ass

Seeing as Broadcom don't do anything original and are just make predatory asset grabs and then bleed them dry... their legal division is all they really have

[nematoad]

Wrong way round.

" a package of mainframe and virtualisation software that Broadcom considered would meet Tesco’s needs,”

Surely it is for Tesco to decide what will meet its needs rather than Broadcom. This is much the same thinking as espoused by SAP when they told customers that they needed to re-jig their businesses to fit in with what SAP was prepared to offer.

What happened to "The customer is always right"?

Do these arrogant companies think that they are too big to fail or that they are the masters now?

[Alan Brown]

Re: Wrong way round.

> What happened to "The customer is always right"?

"In matters of style"

That said, German/Swiss companies are particularly bad at this kind of thing. They can't imagine why anyone would want to work in ways other than their prescriptive methods. It's referred to as the Teutonic Blindspot

See also: German cars. "You are not using the machine per the manual, therefore we do not need to support you"

Dealing with outfits like SAP can be an exercise in banging your head against a brick German wall and they're also fairly thin skinned about criticism

[Cruachan]

Re: Wrong way round.

There was a story a few years ago about BMW trying software reseller tactics. Can't remember which series of car it was, but they fitted all of them with all the optional extras like heated seats, but you had to pay a license fee to activate them. The backlash was huge.

[Anonymous Coward]

Re: Wrong way round.

A lot of German companies forced into the servitude of the Nazi’s never had their leaders and empires removed from them during the de-Nazifucation at the ending WW2. The Americans got bored of it.

Perhaps this is where this mindset comes from.

https://m.youtube.com/watch?v=WooL32H-MP

Actually a fascinating watch.on actually how few people actually get taken down as culpable and most disappeared back into society cleansed.

[Ididntbringacoat]

Re: Wrong way round.

"Do these arrogant companies think that they are too big to fail or that they are the masters now?"

Well . . . Yes.

And it is not limited to the IT world. Just look how the "Masters of the Universe" have branched out in the last Decade or so.

[Anonymous Coward]

Re: Wrong way round.

Do you mean Broadcom, Tesco … or both ?

[Dave Null]

I hope BC get it in the neck

this was one of the most egregious monopoly abuse scenarios I've heard of in recent years. Tesco is a formidable customer to most large IT providers and not shy of going legal. Good luck to everyone apart from BC.

[fronty]

Tesco will be apoplectic

Tesco will already be looking at alternate solutions - they've built their own private cloud and invested heavily in VMware, but they have abstracted it with their own API, so can effectively just swap out the hypervisor for something else. I can guarantee that they will not be at all happy with this situation that Broadcom have created, and just like they migrated all their workloads out of AWS and into Azure (when Amazon started selling groceries why would they give money to a competitor?), they will already have a plan in place to migrate off VMware. Broadcom have lost a key strategic account and I'm sure many others will follow.

[Alan Brown]

Re: Tesco will be apoplectic

"They will already have a plan in place to migrate off VMware"

Tesco don't go into such setups without an already envisaged exit scenario if things go pear-shaped.

Compare and contrast with how UK universities have managed to shackle themselves to MS or Google and have no way of exiting even though the "Free" services are now being charged for.

One London university spent upwards of £5million mograting from its own mail system to MS, is now hemorraging cash and have discovered there's no way back to the old system as all the people involved have retired. What used to take 1/2 FTE is now 16 support staff

Relevance: Same issue: Companies attempting vendor lock-in once the clients are dependent on the product

"Broadcom have lost a key strategic account and I'm sure many others will follow."

Worse for Broadcom, a lot of potential clients will take note of what's happening and stay as far away as possible, which will probably lead to an increase in bait-and-switch sweetheart deals being peddled

[Nick Ryan]

Re: Tesco will be apoplectic

Ah, but cloud... cloud... cloud... CLOUD... CLOUD... CLOUD. You MUST move everything to cloud, no matter how unhelpful or unprofitable or how the performance will be worse. Because it's CLOUD. Also, because there are gobshite consultants running around telling all their victims that they have to move to cloud to take advantage of (looks up the current excuse) "AI".

[Anonymous Coward]

Re: Tesco will be apoplectic

Which, therefore, suggests the case isnt about enforcing the deal, but being compensated to migrate away...

[Jon 37]

Re: Tesco will be apoplectic

Migration isn't instant. They may need additional VMware licences before their new system is ready. They may need support before their migration is complete.

The ability to continue to buy VMware licenses and get VMware support is guaranteed by their contract. So they may have relied on that when making contingency plans for how to move off VMware.

[Roland6]

Re: Tesco will be apoplectic

Suspect Broadcom’s decision to not honour the contract will be instrumental in Tesco’s decision to stay or move away from VMware.

[anonymous boring coward]

Re: Tesco will be apoplectic

I'm pretty sure Tesco is leaving VMWare. It's just a question of suitably punishing Broadcom while doing so (and pocketing something from it).

Good on Tesco!

[anonymous boring coward]

Re: Tesco will be apoplectic

Glad to hear that Tesco has the technical chops to do this. Not all companies, even large ones, have enough in-house expertise.

Making yourself totally dependent on external expertise isn't a good recipe for long-term success.

[MJI]

Took some reading to understand

"Tesco sued VMware’s new owner Broadcom and Computacenter"

Does Computacentre own VMWare along with Broadcom?

[sal II]

Re: Took some reading to understand

Did you bother reading the article? As with many if not most companies, Tesco used a reseller, in this case Computacenter to purchase the licenses, it was Computacenter they had the contractual options for extended support with

[MJI]

Re: Took some reading to understand

Yes, but read that once sentence, it could have done with some more punctuation.

[Stoic Skeptic]

Open playing field

First, no one who knows Broadcom's history should ever trust it to be a long-term partner, full stop.

Second, it does open up the playing field for someone to be come the next industry standard hypervisor.

[Nick Ryan]

Re: Open playing field

In this case the contracts were signed prior to Broadcom taking over and starting to asset strip VMWare - neither Tesco nor Computacenter had any control over that side.

[cookiecutter]

still cheaper

than the cloud

and more stable

and more predictable

and more secure

and no chance of the americans coming after your data

[Anonymous Anti-ANC South African Coward]

Re: still cheaper

Ah, ah, ah... the cloud only benefits the one who hosts the servers... not the company running the VM's.

Clever money-grabbing scheme there.

Smart IT shops know that on-prem is the best. Always.

[anonymous boring coward]

Re: still cheaper

"still cheaper

than the cloud"

Who says "the cloud" it the only option?

[IGotOut]

It's one of those

Can the both lose? Tesco and Broadcom. I'm indifferent to the other two.

[Roland6]

Re: It's one of those

Any awake judge should throw out Broadcom’s claims as they go against established contract law, so that’s lose 1. Tesco whilst winning this, will also have lost as they will have to spend to get Broadcom out of their IT before the reaffirmed contract expires, which if they achieve will have dealt a second lose to Broadcom - loss of a customer.

[arachnoid2]

Re: It's one of those

Not a small margin in their yearly profits, which won't be easy to fill .after these shenanigans.

[Anonymous Coward]

I've been in 9 figure, multi year IT contract negotiations for a contract we ended early due to various reasons included price increases and poor performance. I guarantee that things are not black and white. The only winner will be the lawyers.

My guess is the main loser is going to be Computacenter. going to get screwed by Tesco and Broadcom. That sucks for them, making millions being the middleman for all these years.

[anonymous boring coward]

Computacenter may have go sue Broadcom in turn. Getting the popcorn ready...

[sal II]

This is literally the title of the article....

[anothercynic]

Quite honestly, the way CC makes money does not endear them to their own customers. And they could have joined forces with Tesco and gone "you know, you're right, we'll join you", but instead they look after their bottom line first and gave Tesco the middle finger.

So I'm not breaking out my tiny violin for them... hang on, trying to find it... nope, nope, sorry, no tiny violin for Computacenter.

[Anonymous Anti-ANC South African Coward]

Boredcon and the Golden Goose

Now gather round the campfire all you youngsters, and I shall tell you a tale of high boringness and nothingburgers... the tale of Boredcon and the Golden Goose...

Of course we have seen this sort of tomfoolery coming a long time ago, and of course smart companies did the sensible thing and migrated, which caused revenue to dry up.

Boredcon surely must now be regretting their decision to mess around with licencing fees... but it is too late, the horse has bolted etc etc.

[Pirate Peter]

Broadcom unload both barrels into feet again

as per the title

they are trying to railroad all their customers into the cloud foundation service, as massive increase in cost, they want to do away with any perpetual licensing and replace with expensive subscription licensing to keep their income streams in a very healthy state

[Anonymous Anti-ANC South African Coward]

Re: Broadcom unload both barrels into feet again

This has the smell of Beancounter Central all over it.

Send in the undercover elite BOFH team.

[arachnoid2]

No apparent honour in the vendors behaviour.

Its not just the disingenuous behaviour of dishonouring already signed contracts, its also being unable to take a supplier's word that any newly signed contract will be fulfilled.