U.K. supermarket to release own-brand software

British supermarket chain Tesco is challenging Microsoft and the security industry with the launch of low-priced 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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