British supermarket chain Tesco is suing Broadcom for £100 million over VMware licensing contracts, claiming a failure to maintain support for software could disrupt the supply of groceries in the UK.

The case follows Broadcom's $61 billion acquisition of VMware in 2022 and the subsequent licensing changes which sparked a backlash among customers.

In court filings, Tesco claims that the changes to licenses raised prices by 237%, according to a report on Law360, and accused Broadcom of refusing to negotiate terms or packages on the threat of pulling services that the grocery giant relies upon.

The filing alleges that Broadcom is taking advantage of its market dominance to raise prices.

Neither Tesco nor Broadcom had replied to a request for comment from ITPro at the time of publishing. The case has also pulled in the technology reseller Computacenter.

VMware and Broadcom

When Broadcom bought VMware, the deal faced scrutiny from competition authorities. But after the deal was approved, the concerns didn't fade away.

Broadcom shook up VMware's product lineup and licensing structure, cutting perpetual licenses, products, and introducing changes to its partner program and pricing tiers.

Cloud Infrastructure Services Providers in Europe (CISPE) has called for the acquisition to be annulled, following a report that showed prices were up by 1,500% in some cases.

The changes to VMware in the post-Broadcom world are at the heart of Tesco's lawsuit — and also sparked separate complaints from Samsung and AT&T in the US.

What's behind the Tesco lawsuit?

According to court filings, Tesco had a perpetual license with VMware and in 2021 signed a further subscription-based license with the option to renew via reseller Computacenter, with support until 2030.

After Broadcom cut perpetual licenses and simplified its software packages, Tesco said the firm would not renew its existing subscription and was shutting down products still used by the groceries giant.

Separate reports from The Register noted that Tesco claims Broadcom is refusing to continue supporting the software until the retailer signs on to another deal.

In place of the previous deal, Broadcom offered a package that is £15m more than before — and includes a charge for software that Tesco believes it already has a perpetual license for. Tesco said it was being asked to pay 237% more for "superfluous and duplicative" licenses.

When Tesco disagreed with the new pricing structure, Broadcom responded with a "coercive 'take it or leave it' approach," according to a report in Law360, which Tesco argues is possible because of its market dominance.

"The threatened pricing simply allows Broadcom to realize material financial benefits which it would not be able to achieve under conditions of normal and sufficiently effective competition in the absence of its dominant position," the filing reads.

The software is used by Tesco for tills and logistics, and are "essential for the operations and resilience of Tesco's business and its ability to supply grocers to consumers across the UK and and Republic of Ireland," the retailer said in the filing, as reported by The Register.

"VMware Virtualization Software underpins the servers and data systems that enable Tesco’s stores and operations to function, hosting approximately 40,000 server workloads and connecting to, by way of illustration, tills in Tesco stores," the filing adds.

Tesco called its demand for £100m in compensation conservative and said it could rise significantly, though we'll have to wait until the High Court decides the case before seeing if the court agrees.

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Remote workers might soon be able to do their jobs and shop for groceries at the same time, under a new "Spaces" project between Tesco and flexible office operator IWG.

A trial at a branch of Tesco in New Malden that will start later in this month and will accommodate 12 private desks, 30 co-working spaces and a meeting room.

The 3,800 sq ft space within the store would normally have been used for electrical goods, music, and other forms of entertainment, most of which are now mainly purchased online. The aim is to make better use of floor space and, if successful, Tesco stores across the country could become hybrid working hubs.

"We are pleased to be working with IWG to offer customers the chance to work more flexibly from their local Tesco," said Louise Goodland, head of strategic partnerships at Tesco. "We are always looking to serve our customers and communities better and we will be interested to see how they respond to this new opportunity."

The partnership for co-working spaces reflects new attitudes to employment as a result of the pandemic. Work areas are popping up in more unusual areas, and businesses are also seeking to reduce their own office footprint, as employees look to find office-like environments that are closer to home. Around 72% of workers would prefer the ability to work flexibly rather than returning to five days a week in the office, according to IWG's own research.

"People don't want to spend hours commuting every day and instead want to live and work in their local communities," Mark Dixon, the founder and chief executive of IWG, said. "A Tesco Extra in a suburban location, in the middle of a vibrant local community, is the perfect location for flexible office space.

"New locations in suburban areas will transform communities and are a response to the growing demand we are seeing from customers who want to live and work locally."

By 2030, up to 30% of the UK's office market could be made up of flexible space, according to property advisory company JLL. It is currently less than 10%.

Tesco has confirmed plans to sell off its broadband and video streaming service, Blinkbox, to network operator TalkTalk, as part of the ailing supermarket chain's turnaround strategy.

The company has also set out plans to sell the analytics business, Dunnhumby, underpinning its popular ClubCard loyalty scheme, and close 43 of its stores across the UK.

The majority of these closures are expected to affect the firm's high street outlets, rather that its superstores.

Further to this, the company has also shelved plans to open another 49 large stores, announced the closure of at least one of its HQs in 2016, and that Halfords Group boss Matt Davies will take over the running of Tesco's operations in the UK and Republic of Ireland fron June.

The news follows a turbulent couple of years for the retail giant, which has been a mainstay of the UK's shopping landscape since 1919 and boasts more than 3,000 stores.

The company's fortunes were massively hit in 2013 by the horsemeat scandal, which prompted sales to drop in nine of the firm's 11 geographical markets. This followed the firm issuing its first profit warning for 20 years in 2012.

Last year, the firm was also rocked by reports of accounting irregularities and the consequent departure of several of its top senior executives.

In light of this, the company has now embarked on a series of measures outlined in a trading statement released earlier today to steady the ship, including the disposal of its broadband and fixed line customer base to TalkTalk.

Dave Lewis, chief executive of Tesco, said: "We have some very difficult changes to make. I am very conscious that the consequences of these changes are significant for all stakeholders in our business, but we are facing the reality of the situation.

"Our recent performance gives us confidence that when we pull together and put the customer first we can deliver the right results."

The acquisition will increase the size of the respective customer bases for Talk Talk broadband and voice services by 75,000 and 20,000 households.

"As with the recent acquisition of the Virgin Media national base, customers will be transferred across to the Talk Talk network over the coming months," Talk Talk said in a statement.

Users of Tesco's Blinkbox service, which allows users to watch on-demand, paid-for television content, will be moved over to TalkTalk immediately.

As part of that portion of the deal, Blinkbox CEO and co-founder Adrian Letts will join TalkTalk as managing director for TV.

"The purchase of Tesco's broadband base is another example of TalkTalk leveraging its national network to grow faster. We are excited about the future of quad-play fixed phone and broadband, TV and mobile and this acquisition will help to further drive home our value for money advantage," Dido Harding, chief executive of TalkTalk, said of the deal.

Tesco customers in the UK and Republic of Ireland will soon be able to connect to fast BT Wi-Fi in their local stores for free, thanks to a deal struck between the supermarket giant and the telco.

Upon entering one of the participating stores, customers will be able to instantly connect to BT Wi-Fi by selecting Tesco Wi-Fi' or BT' on their device. The service will be free to use, and is being rolled out to 806 Tesco Extra and Superstores in the UK and 113 in the Republic of Ireland.

Tesco already offers in-store Wi-Fi to its customers, and was the first supermarket chain to do so, but the new partnership with BT will improve the service with bandwidth boosted to 76Mb.

Tomas Kadlec, group technology director at Tesco, said: "Customers now want the kind of experience in-store as they enjoy online, with fast and convenient access to product information, pricing and offers at the touch of their fingertips.

"We were the first supermarket in the UK to offer free Wi-Fi and the first to launch online shopping. We're now bringing these innovations together to put our customers in control with better service and value than ever before."

The service is being rolled out in the hope that customers will use it in conjunction with Tesco services such as to download Clubcard vouchers, product information, recipes and details of current in-store special offers.

According to research from BT and ICM in 2013, 44 per cent of people do actually use in-store Wi-Fi to browse items and compare prices, and 34 per cent use it to find discounts and money-off vouchers for their shopping.

"Connectivity is becoming an important part of the customer experience," adds Luis Alvarez, CEO of BT Global Services. "From retailing to banking, customers expect the same connectivity in high-street stores, cafes and bank branches as they get in their homes or workplaces.

"The BT Wi-Fi partnership with Tesco gives customers the connectivity they expect. It also creates a platform for Tesco to further bring the in-store and online shopping experience closer together for the benefit of its customers."

Tesco has issued invites to an event on October 3, thought to be the launch of the Hudl 2 tablet.

The invite read "We want to show you the bigger picture" suggesting it'll feature a larger screen than the previous tablet that included a seven inch screen.

Tesco's website has been changed to promote the launch, promising its customers a sneak peek at the new device.

The retail chain's first foray into the tablet scene seemed a surprising success, perfectly targeting the device at younger generations and capturing parents' attention while they were casually out shopping for groceries.

Tesco has previously expressed an interest in launching into smartphones too, presumably to bolster its existing phone service that runs on O2's network.

Robin Terrell, group multi-channel director for Tesco, said back in early September: "We were confident that we could offer customers something we saw was lacking in the mobile market: an affordable, quality 4G smartphone handset. As we developed the idea in the first few months of the year, we could see a gap we could fill for our customers."

However, the blog post also went into detail about why the supermarket decided to put a hold on its plans to develop the follow up to its first-gen tablet instead, saying the smartphone market was perhaps too competitive for a new player to enter the 4G smartphone space.

The Hudl tablet has come under fire since it launched in 2012 and most of these concerns have been focused on the security of the device.

In August, it was discovered that the Hudl retained data even after a hardware reset, meaning if you sold or gave your tablet to someone else, there was a possibility they could access your private data.

Tesco has reportedly ditched plans to follow-up the release of its low-cost Hudl tablet with an Android 4G Hudl smartphone, citing competitive pressure.

According to ExpertReviews, Tesco has abandoned the Hudl smartphone in light of competition from other brands, and has instead chosen to focus on its next tablet, the Hudl 2.

Robin Terrell, Tesco's group multi-channel director, told the site: "We are confident that we could offer customers something we saw was lacking in the mobile market: an affordable, quality 4G smartphone.

"As we developed the idea in the first few months of the year, we could see a gap we could fill for our customers. The technology sector is fast changing and constantly evolving and since then, the mobile market has become even more competitive.

"So in early July, I took the decision that we would put the phone on hold and concentrate on the Hudl 2 tablet."

The Hudl tablet has been a success for Tesco, with 400,000 reportedly sold over three months, so it makes sense that resources would be redirected there after plans for the smartphone fell through.

The move into mobile was announced back in May, with Tesco CEO Philip Clarke revealing during a radio interview that it would be designed as a direct rival to Samsung's Galaxy S5, focusing on value.

The smartphone has not been officially cancelled, but put "on hold," signifying that Tesco could pick up where it left off at some point in the future.

The Hudl 2 tablet has been slated for a September release.

Tesco plans to release its own Android smartphone later this year on the back of the company's success in the tablet market.

The retail giant's low-cost Hudl tablet has thrived since its release in September 2013, notching up sales of more than half a million units so far. A successor, aptly named the Hudl 2, is set for release in September 2014.

The move to mobile draws parallels with Amazon, who has long been rumoured to be releasing its own handset on the back of the Kindle Fire's encouraging sales.

Tesco's first mobile device might not be as budget a model as you'd expect, too.

During a BBC radio interview, CEO Philip Clarke revealed the phone will come loaded with Tesco services and would have specifications "comparable" to Samsung's flagship Galaxy S5. To give the new handset an edge, added Clarke, it will be aggressively priced to offer customers the best value for money.

Whether the mention of the Galaxy S5 is an attempt to stir the pot or not remains to be seen, but continued choice in the Android market can only be a good thing, especially with the recent release of EE's 4G Kestrel.

Tesco already operates its own phone service, Tesco Mobile, and sells devices for all networks in its stores.

Clarke also hinted that he would be changing the way the firm's strategy operated. Calling it "New Tesco", he outlined his efforts to change the focus of the company away from superstores and towards smaller community-based shops.

Supermarket giant Tesco has announced plans to make use of augmented reality to better manage stock and deliver a better shopping experience to its UK customers.

Customer' buying preferences change regularly depending on promotions, seasonality and special events. As such, retailers like Tesco must anticipate, predict, respond to and then evaluate demand to ensure the right products are in the right place, at the right time on store shelves.

IBM researchers in Haifa, Israel, have developed an Android app based on IBM's Augmented Reality Shopping Advisor that can help retailers respond to such challenges.

Employees use a camera-equipped phone or tablet to capture what's on the shelves in a given storeThe images are uploaded to Tesco databases, analysed, and compared to the ideal arrangement of products. The database sends back the necessary products superimposed over the image of the shelf to show where the gaps lie.

The app is currently being piloted in London and further deployment will be planned based on the feedback from the trial.

"Delivering a better shopping experience to our customers includes making sure products are well stocked and easy to find," said Tesco CIO Mike McNamara.

"The IBM application will help us to improve store operations beyond the current manual processes and barcode-based methods."

Tesco's current system requires employees to manually log inventory. It hopes the new IBM technology will help streamline the process, freeing up staff time for other tasks that will add value to the business.

The app can also help organise shelves and make them more presentable. It points out knocked-over or hidden products by triggering a mobile alert so the issues can be rectified before they become a barrier to shoppers' satisfaction.

The tech partnership forms part of IBM's First-of-a-Kind programme, which aims to use IT to help businesses succeed.

"This collaboration with Tesco shows how mobile technology can be used to create a smarter, more convenient experience for consumers and retailers alike," said Sima Nadler, retail research lead at IBM Research.

"It also demonstrates that today's most compelling advances in mobile technology result from how the devices are used, rather than the devices themselves. By using mobile to maximise inventory and sales, enterprises can stay ahead of the competition."

IBM has a history of pushing for increased enterprise adoption of consumer-type devices. In 2012, Beth Smith, vice president of Websphere in the IBM software group,advised IT professionals to prepare for the consumerisation of technology.

"Now, folks have become routine consumers of technology. Your customers and your employees are trying to experience your company through their phones and tablets," she said.

"In the future it's going to be through their TVs, their cars and a flurry of other devices."

IBM is also betting on more businesses investing in similar cloud-based projects. It predicted that business use of the cloud will double by 2015. Big Blue is preparing for this new wave by investing billions in new data centres.

Supermarket giant Tesco has deactivated more than 2,000 of its customers' online accounts after their personal details were published on text sharing site Pastebin.

The leaked details included the email addresses, plain text passwords and Tesco Clubcard point balances of 2,239 of the company's customers.

According to a report by the BBC, the data may have been pieced together by hackers using information lifted from other sites and cyber attacks.

It is thought the gleaned email addresses and passwords were then systematically used by hackers to try and access Tesco.com accounts.

In a small number of cases, the hackers are said to have stolen Clubcard points from customers too, which Tesco has agreed to reimburse.

In a statement on the Tesco Facebook page, the company said it was investigating the breach.

"We take the security of our customers' data extremely seriously and are urgently investigating these claims," a company spokesperson wrote.

"We are committed to ensuring that nobody misses out as a result of this. We will issue replacement vouchers to the very small number who are affected."

Trey Ford, global security strategist at security vendor Rapid 7, said the case highlights the perils of using the same login details across multiple online accounts.

"So far the information available indicates the impact of this has been relatively limited stolen vouchers but if attackers have tried this on Tesco.com, the chances are they are also trying it on other sites too and so we may see additional fallout," said Ford.

"This is [a lesson] in consumer behaviour people continue to reuse passwords and other credentials across multiple sites, making it easy for attackers to compromise them. It's essential to learn the lesson from this incident before the cost becomes greater," he added.

The Information Commissioner's Office (ICO) is to investigate a number of security issues surrounding supermarket giant Tesco's customer website.

A couple of weeks ago, security researcher Troy Hunt pointed out in a blog that he received a password reminder from Tesco that contained his password in plain text.

Hunt told the BBC that this showed Tesco's password data was not being securely stored. A more secure way of storing passwords would be to send users details on how to reset a password rather than sending the password itself in plain text.

The researcher also said that the retailer should use HTTPS across the entire site in order to protect customers from phishing and other attacks.

Although HTTPS is used on some part of the website, it isn't in others and Hunt said this does not assure customers using the site.

"HTTP is stateless so the only (practical) way a state, such as being logged in, can be persisted is by passing cookies backwards and forwards between the browser and the website," he said.

"Because they're being sent over a HTTP connection, anyone who can watch the traffic can see those same cookies. And copy them. And hijack your session."

The allegations surrounding the debacle have become serious enough for the ICO to launch an inquiry into the retailer's security measures. A spokesman for the ICO told IT Pro that investigations into the problem were at an "early stage".

"We are aware of these issues and will be making enquiries," said the spokesman.

Tesco responded with a statement saying: "We know how important internet security is to customers and the measures we have are robust. We are never complacent and work continuously to give customers the confidence that they can shop securely."

Tesco is spending $45 million on management and monitoring technologies to ensure the continued smooth running of its global supply chain.

The retailer has signed a deal with CA Technologies to make use of its management software to look after its entire group infrastructure - spanning its stores, banking and mobile arms and the Tesco website.

By using the technology - comprised of CA Service Operations Insight, CA SYSVIEW Performance Management and CA Process Automation - to identify and help solve problems before they become massive issues, Tesco is hoping to further improve the service it offers customers. Use of CA-based solutions as standard replaces previous systems from a variety of vendors.

The big money deal builds on an existing 20-year partnership between the two companies.

"Our systems infrastructure needs to work for our IT team in order to do their job for our customers, our colleagues and our suppliers," said Mike McNamara, Tesco's CIO.

CA's ecoSoftware is also being used to help Tesco do its bit for the environment by keeping a watchful eye on its carbon footprint.

Earlier this month, Tesco inked an eight-year deal with Microsoft, focused on the use of collaborative software.

"We have lots of colleagues in Tesco, doing lots of jobs all over the world," McNamara added. "These technologies can help bring us together to share learning and expertise, views and opinions, thoughts and ideas."

Retail giant Tesco and tech behemoth Microsoft have penned a contract which will see the supermarket chain purchase plenty of collaboration software.

As Tesco has started growing globally, it has sought better collaboration services to ensure the company does not become too fragmented.

The deal with Microsoft will provide those services, with the SharePoint, Exchange and Lync technologies expected to provide immediate rewards.

"We have lots of colleagues in Tesco, doing lots of jobs all over the world," says Mike McNamara, group chief information officer (CIO) at Tesco.

"These technologies can help bring us together to share learning and expertise, views and opinions, thoughts and ideas."

Tesco will also be able to enjoy access to the Microsoft Services' Enterprise Strategy programme, which will offer advice to the retail firm on delivering projects.

"Tesco is one of the most innovative global retailers and this commitment confirms their position in the industry as a company that is focused on its customers, as well as driven by forward-thinking leaders," said Bill Gonzalez, general manager for the worldwide distribution and services sector at Microsoft.

At the time of publication, Microsoft had not confirmed how much the eight-year deal would be worth.

This kind of deal represents where Microsoft is successful. Its online services division, however, continues to leak money.

In the Redmond giant's recent quarterly results briefing, the division revealed its loss widened to $728 million from $688 million a year ago.

Sales of Android-based mobile phones have surpassed those of the iPhone for the first time at supermarket giant Tesco.

The figures were confirmed by Tesco Mobile the joint venture between Tesco and O2 which claimed the beginning of 2011 had seen a massive rise in sales of the Google mobile operating system in its stores.

Before Christmas, Apple's flagship smartphone was outselling Android-based handsets by two to one. However, figures from the start of 2011 showed a surge in the underdog's sales, making the rivals even in January.

Figures from February paint a different picture and show Android's sharp rise to the top.

"These sales are a useful barometer for smartphone trends," said Graham Harris, chief executive of Tesco Mobile. "There is a lot of choice in the market and as a result consumers are driving healthy competition between rival operating systems."

Tesco's findings are in line with research released earlier this week by analyst firm IDC, which showed Android shipment volumes had exploded globally - by 1,580 per cent year-on-year.

"The Western European mobile phone market will be dominated by smartphones, and Android will be the king of the hill," said Francisco Jeronimo, IDC's European mobile devices research manager.

During the last couple of years it was a brave or even foolish CIO who has advocated spending on "green" IT. After all, reducing the energy used by IT usually means spending money on new hardware, and businesses that have been struggling to maintain sales and profits did not want to invest scarce capital in equipment of any sort, least of all IT.

Then again, the business case for green IT has always been about more than more efficient servers, storage or switches, important as these are. The real benefits of technology spending come not from reduced IT bills, but in lower operating costs for the business as a whole. The neat thing about greener business processes is that they are often cheaper business processes too.

Changing the way an organisation does business, though, usually means spending some money up front. Using IT, and particularly software, to drive that change can be one of the cheaper options. So some very large businesses are looking to software to cut both their costs and carbon footprints.

An interesting example comes from ORTEC, a developer of advanced planning and optimisation software, based in the Netherlands. Tesco recently bought ORTEC's transport optimisation software to help it improve its supply chain.

Tesco is the world's third largest grocer, so if the company thinks something is worth investing in, it probably is. The interesting point, though, is the reasoning Tesco gives for its investment.

The grocer plans to use ORTEC's software to improve efficiency and resource utilisation, but also to reduce its carbon emissions.

In fact, Tesco's IT operations have gone further. Executives have stated publicly before now that real challenge for IT, when it comes to environmental footprints, is not so much in reducing energy use or carbon outputs from IT operations, but those of Tesco as a whole.

Other drivers for environmental improvements, such as the Carbon Reduction Commitment Energy Efficiency Scheme are already forcing energy efficiency back on to the IT agenda.

CIOs and IT directors should be at the forefront of promoting more efficient, and greener, ways of work. Of course, if the wider business is to take this seriously, they also need to put their own house in order, especially when it comes to energy use in the data centre. That's no bad thing, either.

Stephen Pritchard is a contributing editor at IT PRO.

Comments? Questions? You can email him here.

Tesco has confirmed that it will start selling the iPhone from December 14.

Users will be able to get their hands on one for as little as 20 a month thanks to Tesco Mobile's joint venture with O2. It will be available online via Tesco Direct and Tesco Phone shops.

There's further good news for iPhone fans disappointed by the tariffs and contract lengths on offer by O2 and Orange as Tesco will offer the handset on a 12 month contract.

Those who talk and text a lot will be able to get the 16GB iPhone 3GS for free on a 60 a month contract, while those looking to take advantage of the 20 a month tariff will have to shell out 222 up front for an iPhone 3G 8GB.

"iPhone is now available and affordable for all, with the best deals in the UK market," said Lance Batchelor, chief executive officer of Tesco Mobile and Tesco Telecoms, in a statement.

"This is a fantastic announcement for us and we're delighted to make iPhone available to our customers. It shows what a serious player in the mobile market Tesco Mobile has become."

More details about the price plans on offer can be found here.

So much for exclusivity - now even Tesco Mobile is set to start selling the iconic Apple iPhone.

The phone will be made available via Tesco's partnership with O2, the operator which originally had the iPhone exclusivity deal before sales were opened up to Orange last month.

In a statement on its website, the retail giant said: "Tesco Mobile through its joint venture partnership with O2 is pleased to announce that it will shortly introduce iPhone 3G and iPhone 3GS in Tesco Phone Shops and online through Tesco Direct in the UK."

Tesco didn't say exactly when it would be made available, but it's aiming for the Christmas shopping season, a Tesco Mobile spokeswoman told IT PRO.

"Pricing and availability information isn't released yet but will be soon - we'd love to get the iPhone into stores and online for Christmas but will only do so if we are happy the quality of service is right for customers," she said.

When Orange started selling the iPhone, its prices were in line with O2's.

Tesco is set to move to a new banking IT platform, which takes the retail giant closer to its target of providing current accounts for customers by 2011.

Although Tesco Bank already offers a number of financial services, it hasn't yet made the move to offer current accounts and become a full-service retail bank'.

This would mean that Tesco would offer competition to the existing high street banks such as Barclays and Natwest.

To help in this goal, Tesco Bank selected Fiserv, an IT service provider for the financial industry, to provide a banking platform.

Andrew Steadman, director of product management at Fiserv, said that the deal will provide Tesco with the foundation platform to take its bank in the direction it wants to go.

"One of the key areas for Tesco, if you listen to what it's talking about doing with the bank, is the area of innovation that we can bring to them," he said.

This means providing Tesco with a core-processing platform that Steadman said was the foundation of any bank, which has the capability to scale and to support a growing business.

Fiserv will also support areas such as internet banking, internal social networking for staff, and risk solutions.

"We have a lot of areas where we provide technology to a financial institution," Steadman said.

A Tesco Bank spokesperson said it was too early to say what form a Tesco retail bank would take, but it currently has a small trial of six branches in the UK that has received positive feedback.

Of the branches, he said: "You can tell you are entering a Tesco bank by the look and feel of them. We're just testing out what customers think of them."

The spokesperson said that Tesco had been talking about expanding into retail banking for a about a year and a half, and has already been serving customers in personal finance for 12 years.

Tesco has signed a deal with Cable&Wireless that allows the retail giant to offer bundled broadband and home phone services to customers for the first time.

The five-year deal means that Cable&Wireless will provide wholesale broadband services, which will see Tesco making a move into the highly competitive consumer broadband and bundled services market.

This is currently the realm of ISPs like TalkTalk, Tiscali, BT and Virgin Media.

In fact, Tesco's previous broadband deal was with Virgin Media, and this new deal frees it to offer what could be stiff competition to the existing players.

In a statement, product director of Broadbandchoices.co.uk Michael Phillips said that was an "exciting development" in Tesco's plans to become a leading broadband supplier for consumers.

He said that Tesco had already made a strong start with its mobile services, and that good performance from Cable&Wireless as well as the confidence in the Tesco brand could give them the edge over the competition.

"Tesco's ambitious plans for broadband put pressure on all ISPs to focus on the importance of customer service," he said.

"Bundled packages have increased in popularity amongst consumers over the past two years, so it will be interesting to see how Tesco differentiates itself in a bid to win more custom."

The bad year for retailers has forced them to look online, as they invest in the only area that that is growing: e-commerce.

According to Frank Lord, managing director of e-commerce company ATG in Europe, the Middle East and Africa (EMEA), larger retailers were now looking at complete e-commerce platforms rather than trying to put together something in pieces by themselves.

He said that new e-commerce platforms allow major retailers to differentiate themselves. Lord added that retailers usually started by having technology that met their needs, but as they grew, building things on their own presented a series of problems as they needed to scale.

Lord used the example of major UK retailer Tesco, which used to build its own e-commerce solutions, but decided this year to move to an ATG-based e-commerce platform.

He said Tesco previously spent 80 per cent of its time developing functionality that already existed in the marketplace, where as it should have been spending that time making itself different from other companies.

"The bigger retailers and the bigger brands right now are really thinking about how they invest in platforms," Lord said. "It's a way to accelerate their business, cut costs, and provide functionality that they need to compete in the space."

He said that retailers needed to have at least 30 million in yearly online sales to really make having such an e-commerce platform necessary.

UK grocery retailers and suppliers could save at least 1 billion over the next five years, just by pooling their data and ironing out inconsistencies, according to new research.

The "Data Crunch" report from supply chain standards body GS1 compared the product data held by suppliers stored on supermarket systems, finding there were inconsistencies in what should have been identical information in 80 per cent of cases.

Using IBM technology, over a million records were analysed from the four largest supermarkets in the UK - Tesco, Sainsbury's, Asda and Morrisons - as well as product suppliers Nestle, Unilever, Proctor & Gamble and Mars.

Mike Coupe, a product director at Sainsbury's, said that the retailer was looking at the implications of the report with a view to putting systems in place, to keep its data more accurately and more in "real-time" than it had done in the past.

"Customer demand for information will increase hugely and having a common data set which will work will make a big difference to the efficiency of the industry," he said.

The report concluded that retailers and suppliers needed to consider adopting Global Data Synchronisation (GDS) techniques already in use in countries elsewhere in Europe, the US and Australia.

However, this would mean retailers would need to follow a new industry standard for managing product data, with one single master source used by all businesses.

A single source of data would make new retail initiatives such as mobile commerce, mobile barcode reading and RFID tagging much easier to put in place.

"The world is moving into a place where mobile technology is ubiquitous and the challenge for all of us is to pick out the right bits that customers will be interested in," Coupe said.

Microsoft is to unveil Silverlight 4, the next version of its Flash rival, next week, showing off new features including offline digital rights management.

Silverlight 3 was only just released in July, and the next version doesn't yet have a release date.

Whenever it does arrive, Silverlight 4 will offer offline DRM using Microsoft's PlayReady tech, as well as native mulit-cast support. For example, PlayReady DRM will allow for digital copies of movies to be sent to customers, without losing control of the rights.

From this autumn, Tesco will use the system to give customers who buy DVDs of movies a digital copy as well as "extras" like ringtones and games.

Rob Salter, category director for entertainment at Tesco, said in a statement: "For the first time, consumers will be able to enjoy a DVD equivalent experience with digital movies, which paves the way for more advanced viewing experiences enabled through Silverlight.

Silverlight 4 will be shown off next week in Amsterdam at the International Broadcasting Conference.

Microsoft also announced Internet Information Services (IIS) Media Services 3.0, which it said would help offer smooth streaming content and simplify Silverlight delivery. IIS Media Services 3.0 uses an integrated HTTP-based platform to stream full high-def content.

Click here to find out if Microsoft can make a success out of Silverlight.

Technology is increasingly a major part of all businesses, and it's especially important for retail.

Having the right tech at point of sale can speed up transactions, while CRM systems can help figure out what customers really, really want from their favourite shops.

As well as a cheatsheet on CRM which has many different meanings depending on who you ask - we also take a quick look at some of the most interesting technologies in retail today.

If you're looking to see what the rest of the retail world is up to, we've got a case study on New Look's retail expansion plans, and we spoke to global giant Tesco about its security processes.

Retail news round-up

British retailers can learn lessons from US identity hack

Researchers look to retail to predict security threats

New GM cars to be auctioned on eBay

Online retail sales growth to dip in late 2009

Brits want e-retailers to be responsible for security

E-commerce sales growth slowing

Microsoft to hit the high street with stores

Internet users have trust issues about shopping online

Photos: Lenovo's 3D virtual retail gaming engine

Gartner: CDs are dead, long live downloads

Pret to roll out contactless payments

Shopping centre unveils major IP investment

Ryman tackles loss with stock audit software

Tools retailer deploys SaaS to handle sales boost

WHSmith voices stock control approval

Walking into your local retailer or even surfing online, it's sometimes easy to forget about the technology that you're using.

It's a constantly changing bit of the IT world, and interesting to follow as consumers can often see the newest bits of tech when they hit the checkout.

Here are some of the most interesting retail technologies out there now - and what to expect in the future.

1. E-Commerce

People are spending more and more time online instead of on the high street, and this pattern isn't likely to reverse. This means that having a website is absolutely vital for the success of any retailer.

Retailers face big challenges in persuading users to come to their sites, stay for a while, and eventually spend money. Any one of a multitude of things could make a customer leave, such as poor website security, downtime, or slow connectivity - which could all cost sales.

2. Mobile retail

As the number of people with internet-enabled smartphones continues to increase, it could be that people will be much more willing to spend money online - if browsing experiences improve.

Like e-commerce, it's going to be the user experience that really marks the difference between the retailers that offer a good mobile shopping experience and those that don't.

Social networks such as Facebook have been successfully moved onto mobile devices, but it may be a while yet before we see a much bigger range of retail websites that can be browsed easily using a phone.

3. Contactless cards

The technology needed to successfully implement contactless cards in retail chains is already available, but questions remain whether they will be taken up at the speed some are expecting.

Barclaycard has been trying to push contactless card technology for years. The Barclaycard OnePulse card - with Oyster, credit card and contactless tech - has been around since 2007, and all of its new debit cards now feature contactless tech.

Surely it will become more popular, but will it be soon?

4. CRM software

Customer Relationship Management (CRM) software can be used for retailers who need to understand their customers, know what they have bought and how to use the information to market to specific targets.

Many software companies offer CRM solutions, including Oracle, SAP, Salesforce.com and Microsoft. Typically, the software aims to improve customer service and market effectively.

However, unless employees can understand the systems and take advantage of them and information they offer, then having a CRM solution is rather pointless.

Also, some analysts claim that Customer Experience Management (CEM) is much more important to the retail sector.

5. Wireless tech

Wireless technology can help save money in the office, by cutting back on wiring and maintenance, but it can also help on the shop floor and in the warehouse.

There are a number of devices - usually handheld, such as barcode scanners - that can effectively make areas such as inventory and aisle management much more efficient.

Websites such as Facebook and Twitter have an online community ripe for targeting.

Many retailers have already promoted their brands on social networks, and you can actively encourage an audience to show some loyalty.

There is no definite answer about whether creating an audience like this has a direct impact on sales, but whether or not it does, direct communication with the audience can certainly help.

7. Biometrics

Even though biometric technology has been associated with security for a long time, it hasn't really taken hold in retail, possibly because of the wariness that the public has for anything that could record their personal information.

But the possibilities are there, with some companies keeping track of consumer access through fingerprint scanning.

However, it might have more of an impact internally. For security, the technology could be used for activities such as verifying employees at the POS or making sure that only certain employees could access restricted areas.

8. POS technology

This is where the most important part of retail occurs the transaction where money changes hands. Good point of sale (POS) technology is vital for any retailer.

This can involve software or hardware. EPOS software is vital to enable the efficient recording or a sale or goods, and is provided by many computer vendors.

The hardware is also key. In restaurants, wireless technology is already in wide use with mobile chip and PIN terminals enabling waiters to move around and let customers pay at the table.

9. Virtual shopping

The hype has died down over retail in virtual environments like Second Life, but the potential is still there to make online shopping more interesting, especially with computers getting more powerful by the day.

We recently covered how Lenovo used a 3D gaming engine to combine virtual world principles and retailing to create an interactive shopping experience.

Shoppers were allowed to create their own avatars, walk around a 3D virtual store, browse products and interact with sales staff around the world.

It's exciting and unconventional, but it remains to be seen if it ever takes hold like it does other in areas, such as online gaming.

10. Self-checkout technology

This POS tech is becoming more common as an alternative to the traditional cashier-staff checkout, especially in places that sell groceries such as Tesco.

Customers scan their own barcodes at an un-manned checkout. To prevent theft, the weight seen in the bagging area is compared to what is stored in the system about the products.

This reduces checkout time because stores can now effectively put in place several checkout units in the space where there would usually have one cashier.

It's also great for the retailer. Instead of needing several staff to operate the checkouts, they can instead spend money on other areas where the shop might need help.

Click here to return to the main Focus On... Retail page, or reading on to find out about Tesco's security, New Look's SOA and the basics of CRM.

Retail is a global business, and you don't get many bigger than Tesco a UK-based international operation that is most known for selling groceries, but has now branched out into areas like financial services and telecoms.

Considered to be the world's third largest retailer, Tesco has a global services arm called the Tesco Hindustan Service Centre' that operates in Bangalore, India and is described as being at the "heart" of the Tesco group.

Tesco HSC's job is to "design, develop, test, and manage some of Tesco's mission IT critical applications". It is also responsible for paying suppliers, maintaining accounts and providing management reports.

Tesco HSC also hosts and protects corporate data in more than 3,200 Tesco stores in 12 countries, including the US and Ireland.

Recently, Tesco's global management decided that its security systems were straining its IT because it all came from a range of vendors, with a mix of firewall and antivirus software deployed on different servers and desktops.

Tesco HSC was assigned the responsibility of running office and network security, to help fix the problem. It evaluated security solutions from Check Point, Cisco and Fortinet.

Eventually it selected the enterprise-class network security platform from Fortinet, which offers a firewall, intrusion prevention, antivirus, anti-spam and web content filtering all in one package.

Ratnham said that as the hub of Tesco's network security operations, they needed security, monitoring and management systems to be tightly integrated.

He added Tesco needed "accurate, timely and detailed feedback", and the ability to change the configuration of remote systems in response to incidents as they occurred.

With the help of system integrator Wipro Infotech, they used Fortinet's Fortigate-1000 and Fortigate-500 enterprise-class network security appliances.

This also included appliances which logged and analysed security event data and a central management system, all based at Tesco HSC's facility in Bangalore.

"The other vendors that we evaluated either did not have the range of security and management features that we wanted, or they lacked the tight integration between their products," said Sridhar Rathnam, director of IT services at Tesco, in a statement.

Click here to return to the main Focus On Retail page, or reading on to find out about the basics of CRM, New Look's SOA and the top ten retail technologies.

Tills at 100 Tesco stores have crashed after a routine IT upgrade went awry.

A Tesco spokesperson confirmed to IT PRO that a "standard IT update went wrong somehow," crashing the tills and leading to temporary store closures.

Three-quarters of those stores are now up and running, the spokesperson said. He added that the tills simply needed rebooting, but that it took some time given the number of tills affected.

Tesco has over 2,000 stores across the UK.

It's not the first time tech has failed shoppers at big grocery chains. Last year, Sainsbury's website was down for two days.

Tesco has applied the latest blade server and virtualisation technology to mission-critical systems running in its data centre to improve performance, cut costs and help fulfil its commitment to reduce its carbon emissions.

The UK supermarket giant late yesterday announced updates to its Real Time Sales (RTS) systems, virtualising key business applications with Citrix XenServer, running on HP ProLiant BL680c G5 blade servers.

The updates and new IT infrastructure have increased the capacity of Tesco's RTS systems by 75 per cent, to handle 1,500 sales-related messages per second. The work also represents a milestone in the retailer's plans to virtualise its entire server infrastructure.

And the project has helped the company hit its target of reducing carbon emissions from its UK data centres by 20 per cent.

Tesco needed to handle its growing capacity demands, and looked at virtualisation as a more cost and carbon efficient option than just buying more physical servers. But, as the same time, it needed to ensure the new infrastructure could also improve performance.

Nick Folkes, UK IT director at Tesco, explained: "After conducting a major evaluation of virtualisation providers, we went with Citrix based on the strength of the Xen technology, the ability XenServer has to provide high levels of performance for heavy duty 64-bit applications, its licensing model and its UK-based engineering team decisions that have already paid off for us."

He said the virtualised RTS environment uses less than half of the energy of the physical bare metal equivalents, which supports Tesco's carbon emission targets and has already saved a significant amount on electricity bills. While Citrix advanced virtualisation management licences are charged per server, instead of per socket, so Tesco is not penalised for using larger blade servers.

"We're running far more efficiently and the ongoing management of the environment is much simpler," added Folkes. "While our primary goal in working with Citrix and HP was to create a more flexible IT infrastructure, the consolidation benefits are significant."

Tesco is continuing to deploy XenServer for its major server consolidation project, aiming for a conservative 10:1 consolidation ratio for physical to virtual servers and is hitting 70 per cent CPU utilisation on the servers, versus the previous six per cent.

Her Majesty's Revenue and Customs has appointed former Tesco chief information officer Colin Cobain as a non-executive director.

Cobain joins three other new non-executive directors appointed to HMRC's board, who have been appointed to strengthen the department's governance capabilities.

The CIO left Tesco in 2007 after six years and is currently the interim group CIO with brewer and owner of Miller and Peroni beer brands, SABMiller.

He also serves as chairman of medical technology firm Safe Surgery Systems. And he also previously held positions at EMI Thorn and Rumbelows as IT director.

The HMRC Board provides strategic leadership, approves business plans, monitors performance and sets corporate governance standards.

The appointments, which are for a three-year period, were made following an external recruitment process carried out in accordance with Cabinet Office guidance. They also include Philippa Hird, Phil Hodkinson and Dame Sue Street.

Mike Clasper, chairman of HMRC and chair of the board, stated: "[The appointments are part of] the next step in strengthening the department's governance. These non-executives bring to the board a diverse mix of expertise and skills from across both public and private sector."

At the end of 2007, HMRC admitted that it had lost two unencrypted discs containing millions of records.

Intel, Dell and IBM stand out among technology companies for policies directed at averting the threat of climate change, according to a study.

Ceres, an investor coalition focused on environmental concerns, commissioned the study evaluating how effective 63 companies in the tech, consumer products, leisure and drug sectors have been in institutionalising policies intended to reduce their energy consumption and greenhouse gas emissions.

IBM, Dell and Intel ranked first, third and fourth among the companies studied, while British retailer Tesco came in second.

"What we're really looking at here is the degree to which companies are incorporating climate risk and opportunities into their core business strategy," said Anne Kelly, director of Boston-based Ceres' corporate governance program.

"It isn't an add-on, it's not a question of philanthropy ... It's really core to their strategic thinking."

Reducing emissions of carbon dioxide, the primary greenhouse gas associated with global warming, has become a priority for many businesses.

The sectors covered in the survey, while less energy-intensive than businesses like power generation or transportation, were chosen because they are less likely to be subject to specific emissions regulations.

Energy-efficient designs

The tech companies stood out for their focus on making their products more energy-efficient. That drive provides other benefits, making servers cheaper for corporations to run and allowing laptops to operate longer on battery power.

They have also been quick to embrace technologies that can reduce their energy needs. For instance, more than 100,000 IBM employees work from remote locations, rather than commuting daily to an office - thus saving the energy that would otherwise be needed to transport them.

The issue of energy efficiency drew ever more corporate attention over the past few years as prices rocketed higher. The spreading global recession, however, has driven costs down, with crude oil now trading at less than one-third its record high of July.

But Wayne Balta, IBM's vice president of corporate environmental affairs, argued that businesses will not forget the importance of energy efficiency so quickly.

"Good environmental management makes good business sense," Balta said.

"When you make your business more efficient it is inevitably good for the environment and vice-versa.

"When you achieve things that are more positive for the environment they are nine times out of ten more efficient for your business."

Supermarket chain Tesco has revealed its view of the future of online grocery shopping, in the form of a new application that combines online shopping with diary and task management.

Nick Lansley, Tesco's head of IT and new technologies showed off the company's latest development project at Microsoft's Professional Developer Conference (PDC) in Los Angeles.

Lansley explained that Tesco's bespoke systems are entirely based on .NET and Tesco is making available its own API to developers looking to add Tesco functionality to their own apps.

One example of this API in action is Tesco @ Home, a new gadget-based application built in Windows Presentation Foundation (WPF) to make online grocery shopping more visually interesting than its current web-based ordering service and more integrated with Outlook or Windows Live calendar and messaging.

"We start with a gadget called the Tesco @ Home gadget, it lets you see your orders, to-do lists, messages and calendars. It serves as a hub for home information as well as grocery ordering," said Lansley.

"Using the calendar, you can plan grocery ordering needs in one view, while also being able to see what's happening in the household and who will be home for dinner."

Using simple drag and drop, users can pick and load a shopping basket with three meals in less than 30 seconds, Lansley claimed.

Shoppers wishing to browse or simply see what they are buying are presented with a slick 3D view of the available items, arranged into a form of online aisle. Customers can find and buy items simply by clicking on the oversize picture icons, that also lend themselves to touch screens such as the new multi touch home monitor display being touted by HP.

"Using a PCs web cam, you can scan the barcode of any item and add it to your basket," added Lansley. To demonstrate, he scanned' a Coke can using the webcam of the demonstration laptop he was using. The application was able to read the barcode from the photo taken and correctly identified the can and added it to the basket in around one second.

No date was given for when, if at all, the Tesco @ Home application would be released to customers, but Lansley did confirm that the company will make the Tesco grocery shopping API available shortly to third party developers looking to integrate Tesco online shopping into their own applications and web sites.

Tesco plans to implement new workforce management software (WFM) across its retail store estate.

The new software will be used to integrate the retailer's varying existing store formats for scheduling the work rosters of its 350,000 employees, which are spread across 13 countries.

Dave Briggs, programme manager for Tesco, said it had chosen the WFM software application from RedPrairie because it offered "the best scheduling solution that can operate across Tesco's different formats."

"By helping ensure that we always have people on hand to assist shoppers, it supports our constant effort to improve [the] customer experience. Ultimately, it will improve our business by increasing store productivity and supporting revenue growth," he added.

The new WFM system will include features to optimise Tesco's labour spend, including the areas of time and attendance, forecasting, demand planning and automated scheduling. It also offers options for staff self-service, performance dashboards with configurable alerts and computer- based training.

The deal builds on Tesco's existing investment in RedPrairie systems, which are used in other areas of the company's supply chain.

Tesco today announced it had signed a five-year, 100-million outsourcing deal to consolidate and modernise its IT network infrastructure.

The deal will streamline existing telecommunications systems of the retail group's UK and international operations into a more cost-effective and efficient, single internet protocol (IP) network, delivering 40 times its current capacity.

Nick Folkes, Tesco UK infrastructure and operations IT director, told IT PRO the deal would allow it to consolidate communications over multiple, legacy voice and data networks onto one.

"The rationale for doing [the deal] is for its financial benefits," he said. "But at the same time, increased investment will allow us to get more value out of the network."

He said a key reason why Tesco chose Cable & Wireless as its exclusive supplier of data, fixed and mobile voice telecommunications after a yearlong, 14 party tender process was the added functionality the provider's Multi Service Platform (MSP) could offer.

Folkes also cited fixed-mobile convergence (FMC), a Cable & Wireless UK service, as an important enabler of more efficient voice communications between Tesco staff. Using existing mobile phones for all calls - operating as a fixed line phone in the office and roaming on to a mobile network when outside - will allow staff to get directly through to colleagues even on the shopfloor.

"This convergence allows for a greater penetration of mobile telephony solutions, where otherwise, we'd have to manage contracts, tariffs and coverage," Folkes said. "By using pico cells to create a mini GSM network, we can now feasibly deploy mobile handsets and deploy the services on top, basically for free."

Cable & Wireless will implement a voice over internet protocol (VoIP) platform on the network, which will significantly reduce Tesco's voice and data call costs, as well as introduce the FMC service for Tesco employees.

The new network will connect more than 1,800 Tesco sites including stores, regional offices and distribution centres. Internationally, the network will directly connect Tesco's operations in 14 countries including China, India, Japan, the US, Republic of Ireland and Turkey in an aggressive 18-month roll out.

Folkes added that the new network will also allow for the use of innovative communication tools to improve operations and add to the customer experience, such as telepresence - a video-conferencing facility that will be enabled by Cisco high-definition video conferencing technology. "We couldn't hope to do telepresence with the existing network," he said.

Other new network capabilities will include in-store information kiosks for customers, IP broadcasts of staff training, development and management information and international office access to centralised management systems.