It's the oldest truism in European history: Never start a two-front war. Napoleon did it with England and Russia. Kaiser Wilhelm, too. And the guy with the funny mustache, three. They all lost in the end. So I find it more than a little curious that in the latest example of bi-martial European business, an English company is failing to heed the lessons of history.
According to several reports out yesterday, U.K. grocer Tesco has decided that it's no longer content to go head-to-head with the world's largest retailer, Wal-Mart (NYSE:WMT). Perhaps drunk with its victory over one of the titans of world business, Tesco has decided to open a second front, and challenge yet another giant. This time, Microsoft (NASDAQ:MSFT) is the focus of its frontal assault. The field of battle: computer software.
On Monday, the U.K.'s biggest supermarket chain announced that it will begin selling six software packages in Britain and Ireland, including word-processing, spreadsheet, and antivirus software, a personal finance package, a photo-editing tool, and a package used for burning CDs and DVDs. Sold separately, each software program is expected to retail for less than $40.
Although the price looks nice (when compared to Microsoft packages that can cost several times more), it leaves unanswered the obvious question: Just how qualified is a supermarket to write software, anyway? And here's the answer: It isn't at all. But Tesco knows that, so it's partnering with UK computing house Formjet to do the actual coding. Most importantly, Tesco confirms that all of the software it will retail will be compatible with Microsoft's own software and operating systems.
That's telling in itself, when you think about it. Investors, ask yourselves: Does Tesco's initiative pose any real threat to Microsoft's software dominance? Hardly.
If Microsoft's "real" rivals -- software titans such as Adobe (NASDAQ:ADBE), Sun (NASDAQ:SUNW), or Oracle (NASDAQ:ORCL) -- feel they need to align themselves with EU regulators in order to compete effectively against Microsoft, it's unlikely Tesco will fare much better. In the final analysis, its move can be best compared to U.S. grocers' selling of five-year-old DVD titles at the checkout line. It may provide an incremental boost to revenues, but a serious challenge to Microsoft this is not.
Add further Foolishness to your cart:
- Never heard of Tesco? You may soon -- "the Redcoats are coming."
- Surprised to hear that Tesco's besting Wal-Mart? Well, it is -- and Wal-Mart's crying foul.
Wal-Mart and Microsoft are Motley Fool Inside Value picks. To discover more top-shelf stocks trading at bargain-basement prices, try Inside Value free for 30 days.
Fool contributor Rich Smith does not own shares of any company named above.
