This past week, I attended the annual IBM RS4 event at the Hard Rock Hotel in San Diego, Calif. While the tone of this year’s conference was a bit subdued in light of the recent IBM/Toshiba TEC acquisition, it was still packed with informative sessions and insight into the future of retail technology and IBM Retail Store Solutions (RSS). While it may not have been “business as usual,” most of the attendees I talked to are optimistic about the promise of the recent acquisition.
Yet despite the prevailing optimism throughout the industry, there are still retailers who have come to us with significant concerns.
¬ Will parts be available for a 7-year lifecycle as planned?
¬ Will processors and other components stay consistent over the product’s life?
¬ What about the intelligent product design and integration?
An issue that’s particularly relevant to the retailers we work with is IBM’s on-site maintenance. The official word is that existing contracts will be handled initially by IBM employees and eventually be transferred to the new company. My sense is that maintenance could emerge as an area to watch over the years as the transition completes. Will it stay on and be viewed as a core competency and focused on by the Toshiba TEC brand?
As I stated in my last post, it’s still too early to tell for sure how certain variables of the deal will play out. However, if we take IBM’s message at face value, there doesn’t appear to be any reason for retailers to be overly concerned. As a matter of fact, there are probably more reasons for them to be excited about new opportunities to improve their business.
For those of you who haven’t heard, here are some of the specifics of the deal:
• IBM will maintain a 19.9% ownership position on the new company for at least three years.
• Worldwide headquarters for this new company will be in the US.
• The existing IBM RSS team will transfer to the new company and be run by Stephen Ladwig as the CEO.
• Outside of Japan, Toshiba TEC needs the expertise the IBM RSS team and brand bring to the table. They have not executed well in markets outside of Japan.
• Significant store software assets are moving to the new company.
• The new company will be granted Premier Smarter Commerce Business Partner status.
Aside from the details of the acquisition, there were some other noteworthy takeaways from the conference that, in my mind, could be quite favorable for IBM’s existing customer base.
For starters, it’s highly possible that the new company will have a larger research and development (R&D) budget than the existing IBM RSS team had. This is something that can only enhance the existing product portfolio to include a variety of next gen solutions. In other words, the new company can now re-do anything they couldn’t get done under the IBM brand. Not only will they have increased R&D funds, but an enhanced product portfolio to bring to the marketplace, more SG&A flexibility, and an aggressive desire to sell more.
Most importantly, the new company won’t be weighed down by the heavy cost allocation system of the IBM brand and, as a result, will enjoy additional cost flexibilities to drive revenue.
While it may not be “business as usual,” the new company will have many opportunities to rewrite their market approach and reinvent the POS space. In my opinion, all signs point to positive possibilities for the future as long as it’s all properly executed. But with the talented IBM RSS team on board, I can’t imagine it will be done any other way.
So, what do you think? Could the IBM/Toshiba acquisition reinvent the POS space? Join our LinkedIn group, Retail tekSPERTS and weigh in! We’re always online, so if you’d rather just stay up-to-date on the latest developments in retail/hospitality technology, you can always follow us on Twitter @tekservePOS or connect with us on Facebook.
