October 3, 2006 3:14 PM PDT

U.K. supermarket to release own-brand software

British supermarket Tesco is starting to sell low-priced software, taking on the major vendors.

The U.K. supermarket chain is aiming to take market share from the likes of Microsoft and Symantec. It will offer six products all costing under 20 pounds, or about $38--a substantial discount compared with rival products.

"We will be offering unbeatable prices, but with good quality as well," a Tesco representative said.

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

Symantec took a positive line, saying, "We welcome healthy competition."

Microsoft was also positive. "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," a Microsoft representative said.

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

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

The software will come from a variety of providers: Panda Software, Filestream, Ability and Software Dialog. All the products will be branded as Tesco software, and will be available through the supermarket's Web site and in the U.K. in at least 100 stores by 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 at 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 pounds ($19), an Internet security package will be priced at 20 pounds ($38) and the office software is to be priced at 20 pounds.

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

Mitchell argued that price is not a surefire winner for any 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 telecommunications services, plus a limited range of PC hardware.

Richard Thurston reported for ZDNet UK in London.

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5 comments

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How About if "Tesco"....
... starts to sell "spare parts" (and services) that are economically available and needed for the "CONCORDE" so that some enterprising entrepreneurs around the world can take another "shot" at flying the "EU's CONCORDE" again since according to this article; "The supermarket chain already provides telecommunications services, plus a limited range of PC hardware." From its perspective... Microsoft, as it is well known has set its eyes towards the "skies" by being involved in the development of the "AIR TAXI". DUH!
Posted by Captain_Spock (894 comments )
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Concord?
The concord was not really economically viable and analysis showed it to contribute to breakdown of the ozone layer. Satelites could track the flight path by the streaking slice it took out of the ozone layer. Lets not also forget the ban placed on supersonic flight over most countries, which is why it was basically restricted to atlantic ocean crossings. I, for one, am not sorry to see it go.
Posted by Seaspray0 (9714 comments )
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Sell open source CDs as a value brand
It's a great idea, and one that I think will catch on.

Any supermarket can sell open source software CDs for a small markup over the cost of producing the CD.

(Open Source licenses don't prohibit the sale of copies, but require that buyers of copies also be entitled to make copies.).

It's the kind of everyday exposure that open source software can benefit from.
Posted by Maccess (610 comments )
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Conflict of interest
Should the EU decide that microsoft's security package is non-competitive because it doesn't require "user permission" to install, does this create a conflict of interest since they now are also the owner of security software? Whether they are right or wrong, it would still set up a case similar to company A suing company B with the judge being employed by company A.
Posted by Seaspray0 (9714 comments )
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Tesco funded by Microsoft to avert more European Commision fines??
conspiracy theory...that's all..
Posted by baswwe (299 comments )
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