The Internet Opens More POS Networking Opportunities

The future of POS (point of sale) networking across vertical markets lies in end users trimming the fat from their in-store systems by switching to an Internet backbone. In turn, networking vendors see their customers removing servers from their stores to consolidate them into either regional locations that support multiple stores or one centralized server at the main headquarters. IP (Internet protocol) connectivity gives end users server flexibility in terms of location and provides real-time access to information. "We're seeing both new and legacy systems tied into enterprise systems, giving store operators and corporate management the ability to use information in real time. This is something legacy systems could not offer alone," said Lee Stagni, president and COO at Comtrol Corp. (Maple Grove, MN). The benefits of networking can be seen within the end user's operation, but it also opens a new and steady revenue stream for POS and networking VARs.

Connect Devices Over An IP Network
As more retail facilities become networked, a majority of the processing and storage can take place at the server level, eliminating the need for a large, powerful machine at the checkout or even within the store itself. "The movement toward thin client POS means registers are less likely to experience computer malfunctions, since the applications are run at the server level rather than on the register itself," said Ben O'Hanlan, director of sales at Sealevel Systems, Inc. (Liberty, SC). "Moving to thin clients decreases individual terminal maintenance, hardware costs, and integration complexity."

Once the network is created, individual device servers can be added to monitor store peripherals and can have a large effect on overall operations. For example, one restaurant networked freezer sensors through device servers to alert its headquarters of any substantial changes in temperature. "If the temperature in the freezer rises too high, the system alarm warns a technician, who can notify the manager in time to save the frozen inventory," Stagni said. "Without timely notification of the freezer failure, lost inventory would lead to dissatisfied customers as well as lost revenue."

Operating devices directly off an IP network also simplifies cabling complexity and reduces costs. Another restaurant chain deployed serial hub devices in the kitchen area to link its kitchen printers individually to the network. "This solution eliminated cables running from the store's in-house server to each printer at the salad, cooking, and fryer stations," said Mitch Friend, director of sales at Equinox Systems (Sunrise, FL). Because the devices are located on the network, a company or a VAR can access the devices and remotely troubleshoot a problem. "Because these devices operate over standard IP networks, the actual device may be located inside a store, but it is talking to a server that is at headquarters," Friend said. "From a time perspective, it is efficient to troubleshoot from a home office rather than travel or send an engineer to solve the problem." If VARs can eliminate some of the overhead involved in traveling to a site for a quick fix, they can make a better profit on a solution.

Networking As A Recurring Revenue Stream
Whether you are a POS VAR looking to expand your knowledge base or a networking VAR that wants to break into the retail and hospitality verticals, there is definite profit to be made in networking services. "Installing systems to facilitate monitoring of store systems puts VARs in the ideal position to offer a subscription monitoring service, thus gathering long-term, high-profit, and recurring revenue," Stagni said. But Stagni also suggests that for VARs to be successful, they should focus on a niche market. By understanding the specific business rules and common devices for a certain vertical, such as connecting a pill counter machine to a network for a pharmacy, a VAR will specialize quickly and, from there, be able to expand. There are any number of devices that could be monitored and operated over a network, but a true value-add would be knowing what will work for a certain chain.

VARs should also consider networking possibilities when pursuing a customer. "If I were a VAR, I would concentrate on customers who have a large number of locations, because the communication and cost benefits increase when the chain is expansive," said Joe Perle, president and CEO at Perle Systems, Inc. (Nashville, TN). "The trends are happening faster in the larger chains." VARs should also look for the opportunity to bridge old networks with new network technology. There are few customers in the retail and hospitality environments that will rip out everything they have and put in all new equipment.

POS VARs Have The Upper Hand
A final key to success in the networking arena is for VARs to adjust their mindsets from just application-driven sales to adding networking to a solution set. "A POS VAR may have looked into networking technology three or four years ago and thought it was too much of an investment and risk at the time," Perle said. "But with the recent advances in IP connectivity, it is worth it for a VAR to take another look at networking options."

Though it is possible for a networking specialist to successfully enter the POS networking arena, most vendors agree POS VARs have a leg up. "There are lots of pure networking VARs who don't know much about POS applications. They can play in the arena, but VARs that understand POS requirements are better suited to then add IP networking knowledge to their service offerings," Perle said. "POS VARs can beat out networking VARs if they take the time to invest in networking education."