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Microsoft Office 365 to Help Tesco

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The world’s largest software maker Microsoft Corp. (MSFT) will now be selling its social platform to U.K.-based retailer Tesco. Tesco will be using Microsoft Office 365 at its headquarters and across stores and field offices in Europe and Asia.

Deploying Microsoft Office 365 will enable employees of Tesco to access the latest Microsoft Office software, eventually making their job easier. The software will help in bringing together Tesco’s workforce on a single platform, thus allowing them to transfer relevant information.

A new channel of functionality and communication will open up, which will provide employees with the latest information about products in the stores and work as a team. It will also help in taking decisions. All of these will ultimately help in bringing unique shopping experience to Tesco’s customers.

Tesco plc is a multinational grocery and general merchandise store. Founded in 1919, the chain expanded from just 500 stores in the 1990s to 2,500 after two decades. It has diversified retail items such as books, clothing, electronics, furniture, petrol, software, financial services, telecom and Internet services, DVD rental, and downloadable music.

Tesco has been facing challenges due to the economic downturn and has been slowly losing market share at home. As per research conducted by Kantar Worldpanel, Tesco’s U.K. market share dropped to 30.7% in November 2012 from 31.0% last year. All the other super market companies are also losing some business.

On a global basis, Planet Retail noted that Wal-Mart (WMT) is the leading super market chain, followed by Carrefour and Tesco. Thus, it makes sense for Tesco to collaborate with Microsoft and enhance its business by implementing superior software.

Microsoft has been battling a slump in the PC market, impacted by an uncertain global economic climate. Further, smartphones and tablets from Apple Inc. (AAPL) and Google Inc. (GOOG) have been cannibalizing PC market sales. Thus, such collaborations may ease some pressure on Microsoft going forward.

Microsoft reported revenue, excluding deferrals, of $16.01 billion in the first quarter of fiscal 2013, down 11.4% sequentially and 7.9% from the year-ago period. Revenues also missed the consensus by 2.5%.

Microsoft, Apple, Google and Wal-Mart all have a Zacks Rank #3 (Hold).

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