POS and the Giant Vendors

Some familiar names are reshaping the point-of-sale market.


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Some familiar names are reshaping the point-of-sale market. Rob Carney had no doubt in his mind about the point-of-sale market when he launched EVT Systems just over a year ago to sell Microsoft's entries in that field.

A former Microsoft employee, Carney says there are two appealing attributes to the Microsoft Retail Management System, which is designed to serve businesses with one to 25 stores. "First, it was a complete product that I could sell from Day One," he says. "Second, the retail industry is a huge market. There is a huge opportunity."

In its short life, EVT has grown to eight employees, and also moved quickly to developing add-on products for RMS, including a Web store that provides central system administration from the Web. End users can utilize the add-ons to develop target mailings for customers from the POS database.

Partner Insights

EVT's quick entry into vertical markets with products for wineries and wine stores, and apparel, gift/novelty/souvenir, and sporting good stores, and the hardware and lumber business, explains why POS is one of those rare software markets: a place in which the number of packages available is growing, not consolidating. There are a lot of different businesses with a lot of different needs.

POS: Not for Part-Timers

If you think accounting software is mission-critical, think about how critical a point-of-sale system is to a retailer.

"That's part of the learning curve," says Dave Beck, CEO of SystemLink North America, a Herndon, Va.-based Accpac reseller. He recalls one of the firm's first clients when, "on the first Saturday morning in their busy season, their system went down and they were looking for us," he says.

SystemLink was able to help; learning quickly that while support for accounting clients can be conducted from nine to five, POS clients need help desks to be available around the clock.

"We had to put in special support agreements where they could get help on Saturday or Sunday until 8 p.m." he says.

SystemLink eased into the POS market about four years ago. "We started playing around with it for clients who were wholesale distribution clients who wanted a small POS at the warehouse for their customers who came in to buy things," says Beck. SystemLink installed Accpac's ePOS, which operates both on the desktop and via the Internet.

Beck says Accpac's combination of POS and accounting has a big advantage over competing products. "Most traditional POS systems have accounting built in anyway. Then, you have to throw in an integration piece," he says. Because most of the functionality in the Accpac system is in the accounting system, "the POS module is fairly inexpensive." The ePOS module is priced at $2,000 per license, plus $1,000 per register.

The ePOS system is also extremely reliable because the Internet connections rarely go down. When they do, retailers with multiple locations can continue to sell, completing transactions locally and synchronizing when the Internet link is restored.

POS is an old game and a new game. In the old game, there are many specialized players whose names are hardly known, even within the technology world. That was one of the messages from Microsoft's rival Intuit when it entered the market with Intuit POS.

"The market is still as fragmented as it was when we introduced Intuit POS three years ago. We have sold more than any other competitor," claims Steve Aldrich, Intuit's product manager, who admits "that information is very sketchy."

Intuit and Microsoft are part of the new game, attempting to capitalize on their widely known names and scoop up a big share of the market, especially at the low end. Both also utilize accounting professionals to reach prospects, although in different ways-at least for the moment.

They entered the battle in opposite ways. Microsoft started with a product for multi-store operations with RMS and has entered the single-store field with Microsoft POS, adapted from the earlier version. Intuit started with the single-store Intuit POS and just moved to a multi-location entry.

By most accounts, it's the single-store location that offers a great portion of the opportunity.

About 45 percent of all retail sites are single-store retailers, according to Mike Dickstein, director of POS solutions for MBS. And that is the target for the Fargo, N.D.-based company's new Microsoft POS, which, at $799 for a single lane, is a less costly version of the Microsoft Retail Sales Management. RMS is available in hardware/software bundles, with pricing starting at $2,999.

"The simplicity of the user interface makes training extremely easy," says Dickstein. "It makes training extremely easy. That's a big expense for small business."

Microsoft says it has also simplified the work flow involved in checkouts, including scanning loyalty cards, product bar codes, and swiping the customers credit card, to fewer than the five or six steps normally required. Microsoft is also supporting a touch-screen. The system interfaces with Microsoft Office.

One major difference between the Microsoft and Intuit approaches in the single-store POS systems is that Intuit bundles the hardware with the software, while Microsoft does not. Dickstein says that MBS found that retailers wanted the ability to choose their own hardware. Another difference is that Intuit has sold its system via telephone and online, while Microsoft utilizes its resellers. However, both interface with Intuit's QuickBooks financial software.

Another newcomer is American Express Tax and Business Services, which is marketing the American Express Edition for Point-of-Sale, part of a growing line of products for SAP's Business One package.

"It includes inventory management and some employee management," notes managing director Harvey Goss. It is suited for stores with sales ranging from $500,000 to $5 million. For companies that need to manage and transfer inventory, often those with their own warehouses, AmEx markets a Retail Management System that is a higher-end version of the POS software.

Since Business One includes both accounting and customer relationship management functions, AmEx is positioning its product as one that gives small retailers functions not found elsewhere.

"The way that small retailers can differentiate themselves is in service," says Goss. With CRM built it, they can easily identify customer preferences, offering them loyalty and gift card programs that are built into the system.

Because the software connects to the AmEx Edition Portals, multi-store operators can transfer data and functions between stores and workstations. For $10,000, customers can buy a basic portal, which comes with customer, vendor, executive, and employee Web access. The POS system starts at about $20,000 for a store with two to three registers. The lowest total installed price is about $60,000.

Bonanza or Not?

Not everybody agrees that the low-end market represents such a wealth of opportunity for the new entrants. Jason Palmer, a CPA who owns Huntington, N.Y.-based Palmer Computer Services, thinks the market opportunity is probably overstated, especially at the low end. Many companies that don't have POS systems probably don't need them.

"If they don't have a computer, chances are they are not getting POS," says Palmer. "If I operate a deli and I have 1,200 SKUs, I'm selling the same ham everyday. The driver comes everyday."

Synchronics Enters the Low End

It's been a long time since POS specialist Synchronics competed at the low end of the point-of-sale market.

But the Memphis, Tenn.-based company is introducing an Express version of its CounterPoint line. Priced at $995 for a single user, the cost of an installed version of Express will fall between Microsoft POS and between the two QuickBooks products.

"What we've done is take our enterprise product, and scaled it," says president Jeff Goldstein. While Goldstein does not believe most dealers can make a good living selling one- and two-user systems to single-store operators, Express will give Synchronic's VARs the chance to get a foot in the door with smaller operators that will grow into the full-fledged package.

"Our dealers have to cover a broader range, where they can take on the three-to-five-store operation. They don't want that business to go by," Goldstein says.

Synchronics is also creating a new class of reseller. The Express Dealer Program provides two days of training, instead of the nine days required for resellers of CounterPoint SQL, and is designed for dealers who want to learn the retail market.

Selling POS systems requires a serious commitment, says Goldstein. "A successful integrator has to understand customer service, business application, audit control, and merchandising," he continues. "It takes years for us to train our dealers and for dealers to learn in the marketplace."

Goldstein agrees that software needs to be able to address a wide range of user demands. "Within an industry, customer practices vary phenomenally," he says.

"One customer wants to print tags when he orders, another wants to print when he receives a shipment, while somebody else wants to print on demand."

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