By silicon.com, 4 October 2006 14:05
Who ever thought Microsoft would face pricing pressure from a supermarket chain?
That's exactly what has happened with Tesco launching its own-brand software line including, yes, an office suite for about £20 - as opposed to the £300 Redmond charges for its Office package.
Microsoft and Symantec (Tesco's also selling antivirus software) are both being good sports by saying they welcome the competition - a sign they still feel pretty confident about their hold over software buyers.
And well they probably should - for now at least. Which company people choose to buy software from is largely an issue of trust and brand - and though Tesco's brand is trusted for many household items, software is not among them.
Microsoft has spent decades building its brand into the household name for software and that perception won't disappear quickly. So, for the time being, that means users will fork out the extra £280 for Office.
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But this is a threat the old-school software makers should take seriously. Tesco holds sway over the mainstream population - many of whom aren't particularly tech-savvy nor harbour much loyalty to Microsoft and their like. These buyers are price sensitive too and so could be won over by Tesco, if the supermarket chain puts some marketing muscle behind their software push.
Whether Tesco will succeed in taking on Microsoft in the consumer software realm remains to be seen but the move certainly shows guts - no one in the IT industry has tried it for years.
Comments
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1. Allen Jones
Tesco security software -- are you kidding me? What kind of global threat response capabilities does Tesco have? If I need a six-pack of Pilsner, I'm going to Tesco. If I need protection from Trojan horses, phishing attacks and zero-day threats, I'll stick with the Symantecs of the world. Truly bizarre.
2. Mark Kobayashi-Hillary
Tesco has the benefit of offering an immense retail platform for any supplier of software (£1 in every £8 of retail spend in the UK goes to Tesco). The average silicon.com reader might know how to hunt around the web for a good deal on software, but most PC users are using it as a tool, just like a washing machine or toaster. If Tesco can offer these users a real alternative then they will really clean up. A credible move might be to package some open source alternatives under the Tesco banner. A partnership between Tesco and Open Office - now something like that really could be competition...