Tesco takes on software giants

Tesco takes on software giants

Summary: Supermarket chain is challenging Microsoft and the security industry with the launch of cut-price £20 software

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TOPICS: Tech Industry
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Tesco is to start selling cut-price software, in a move that could spark a price war among the major vendors.

The supermarket chain is aiming to steal market share from the likes of Microsoft and Symantec. It will offer six products all costing under £20, cutting a substantial discount compared with rival products.

"We will be offering unbeatable prices, but with good quality as well," a Tesco spokesperson told ZDNet.

Tesco's software will include antivirus, firewall and office productivity products.

Symantec took a positive line, telling ZDNet UK that "we welcome healthy competition".

Microsoft was also supportive. "We welcome competition in all its markets, because it drives innovation and keeps prices competitive — both of which benefit our customers and our reseller channel," said a Microsoft spokesperson.

Tesco is entering a crowded marketplace, taking on not only the likes of the global software vendors, but also a whole host of low-cost or free alternatives such as OpenOffice.

Tesco will buy the products through a Sussex-based distributor called Formjet, which will provide its customer support services. Support will be Web only, with no telephone helplines.

The software is manufactured by a combination of Panda Software, Filestream, Ability and Software Dialog. All the products will be branded as Tesco software, and will be available through its Web site and in at least 100 stores later in October.

Some analysts questioned whether the supermarket chain would be successful, given that the software is made by relatively obscure IT companies.

David Mitchell, an analyst with Ovum, said: "Partnering with a category minnow demonstrates one of two things: either that Tesco is confident that its marketing engine is robust enough to develop their brand and the business behind it, or that it has not properly understood the dynamics of the market it is entering."

The antivirus product will be available for £10, an Internet security package will be priced at £20 and the office software is to be priced at £20.

For £10, shoppers will also be able to buy photo software, a personal finance tool and a burning tool.

Mitchell argued, though, that price is not a sure-fire winner for any IT software provider and that the level of interoperability with Windows will be critical to its success.

"If the Tesco product range does not provide file format compatibility with Microsoft Office, for example, then it will find user adoption to be a challenge," Mitchell said.

The announcement is not Tesco's first foray into technology: the supermarket chain already provides telecoms services plus a limited range of PC hardware.

Topic: Tech Industry

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8 comments
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  • they will never get to microsofts level!!!!!!!!!!!
    anonymous
  • Tesco Value Antivirus :)
    anonymous
  • Anyone with shares in Symantec, McAfee or Microsoft should cash them in now. As Private Frazer would say, they are all DOOMED!
    anonymous
  • What you lot don't seem to be thinking of is the effect this will have on the marketplace. Joe public will (or should) start to think, "why do I HAVE to get MS Office, when I can get it from Tesco? And it's cheaper too!"

    Yes, it won't be as fully functional as MS Office, but 90% of users don't use the "advanced" functionality offered by Office anyway (hands up all those who are still using Office97). I use OpenOffice by choice, not because it is Free and Open Source (although that is definately a BIG plus point), but because I have got just the functionality I need and I haven't got to pay hundreds of pounds to Microsoft for something I'm only going to use 10% of.

    I'm all for Tesco raising the awareness of viable alternatives to the Microsoft dominance of the software market. I'm just waiting for them to start to offer an Operating system to run these products on as well (GNU/Linux, *BSD, OpenSolaris anyone?)

    Andy
    anonymous
  • I really hope it works but i will be waiting for the experts to review the products before i replace my current antivirus and firewall's - and who funded the develpments of six new products, they had better not be beta versions or have compatibility problems with windows or its products else it will lose credibility very very quickly. Good luck though - i will be watching
    anonymous
  • They will be of very POOR quality, I wouldnt like to risk using Tesco 'Value' security on MY PC....
    anonymous
  • They're all existing products, and, you can bet that Tesco have done their homework. I can certyainly vouch for the quality of "ability office".

    I am mystified by the belief that Ms office is high quality: I have tried recentish versions of "word perfect", Ability, software 602 and open office:

    I have to use word at work: it is the worst word processor on the market.

    I concede that Excel still remains ahead of most of the oposition.
    anonymous
  • Software today is sometimes too complex and thus expensive and there is any amount of very cool and good software in the opensource and shareware market that quite often do the job as well or better. Supermarkets are a fantastic outlet for these programs and I feel the giants must heed this move. They will need to cut the price of their software as if they wish to remain in the game.

    How many times do you go to PC World? How many times to you go to Tesco.? Professionals will most often go tthe Microsoft et al route 0 but millions won't. I think this step is the most significant step in software distribution for years.
    anonymous