Blog | July 26, 2012

How Big A Threat Is NCR To Retail VARs?

By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

The life of today's POS reseller continues to get more difficult.

As you may have heard, NCR recently announced NCR Silver, an iPad-based retail POS solution targeted at small retailers. Since the announcement, I've been inundated with outraged calls and email from resellers and other channel executives saying that this new product, from one of the industry's largest players, threatens the livelihood of retail solutions providers.

The concerns are many. Not only does the solution use an iPad, something many solutions providers have been striving to dispel as a suitable retail device, but the software is available for download on the iTunes store. Where's the money to be made? NCR does confirm that its VARs will be able to sell NCR Silver and that there's a monthly fee to customers, but the company wasn't able to tell me how much a VAR could make on such a sale.[pullquote]This should serve as a wake-up call to those in the industry who are ignoring the warning signs of the massive technology shift this industry is experiencing."[/pullquote]

Then, there's the threat of target market for the solution, which according to NCR, is SMBs. "Before NCR Silver, NCR's hardware offerings weren't specifically designed for small business owners," says NCR's Christian Nahas, VP of the company's small and medium business team. "NCR Silver has taken capabilities that were once reserved for much larger companies and developed an application that works on a much smaller scale. NCR Silver's customers are not the same customers who would purchase NCR hardware in the past. NCR Silver is providing a solution to, and marketing towards, an entirely new market."

This, to me, is the larger threat to VARs, particularly small ones. Many retail VARs have long lamented having to battle NCR's direct sales team when it comes to larger accounts, so is the company now planning to sic its direct sales force onto the SMB market? The answer, unfortunately, is yes.

"NCR Silver is specifically designed for small businesses with up to five separate locations, so yes, NCR Silver's sales force will be marketing towards these individuals, but NCR's sales force will continue to focus on large businesses."

I'm not sure I totally buy the end of that answer. Will NCR really roll out a product in one of the hottest technology categories today, designed for a very specific market, and then not pursue sales in that market with all their might? Time will tell.

Regardless of what happens with NCR Silver, this should serve as a wake-up call to those in the industry who are ignoring the warning signs of the massive technology shift this industry is experiencing. NCR is smartly addressing a market need with a low-cost product and, honestly, is no bigger a threat than other manufacturers doing the same.

Next week I'll be at RSPA RetailNOW, where I know this topic will come up. I'm eager to hear what the association, and other industry leaders, thinks about what changes retail solutions providers need to make to not only survive, but thrive, in today's crazy evolving world of POS.

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