Does Microsoft or Novell have POS figured out?
I recently helped Novell’s Retail division with some market messages. Naturally, these were all based around Novell Linux for Point of Service (NLPOS) and IBM Retail Environment for SUSE LINUX (IRES), the latter being a superset of the former.
During this effort, Microsoft - the seemingly endless nemesis of all things Linux - released Windows Embedded for Point of Service, or WEPOS (which unfortunately is pronounced “we pause”, which is a better explanation of their Longhorn development efforts). What is instructive is how Linux and Windows are looking upon the POS market, and how Linux will own the space ( are you listening Martin? ).
The critical factor for Point of Service terminals (formerly Point of Sale, but always POS) is openness and flexibility. Retailers have long suffered the strategic problem of POS selection, knowing that they have to live with their decision for five or more years. The reason they have such a long ROI period has to do with the multiplicity of POS devices.
Take an outfit like Circuit City, where I once worked and where the IT department is gleefully abandoning their roll-out of Windows for POS. With 600 stores, and 5-10 POS terminals per store, they have a roll-out device count of approximately 4,500 terminals. Not only is the cost of rolling out new devices huge, so is the tech travel time, training, tech support, and other logistical nightmares.
And herein lies where IBM and Novell have thought-out the market better than Microsoft. Novell and their IBM partner recognized several basic issues:
1. Cash registers have morphed into service terminals.
2. Application for customer service will constantly change.
3. Thus the OS on the POS terminal must be upgradeable and serviceable
4. The cost of POS terminal technology is an important factor . . .
5. But not as important as survivability and expandability
So why does this leave Microsoft paddling for breath? Cost and survivability go hand-in-hand. Embedded Windows makes switching costs higher, and tempts vendor lock-in in the age of commodity hardware. Retailers, who on average have POS terminals over seven years old and who are ready to switch, want to avoid any vendor lock-in because they have suffered badly from it in the past.
By choosing Linux, and by choosing a non-embedded OS, retailers eliminate two significant points of vendor lock-in, and cut costs in the same action. That’s one of the reasons Circuit City is dumping Windows and switching to Linux for POS. And, according to an IT buddy of mine still employed at Circuit City, the maintenance nightmare they experienced in patching and updating Windows on POS was enough to not only ditch the product, but to set fire to Bill Gate’s Porsche for revenge purposes.
The other Microsoft mistake is that they are now releasing customized versions of Windows Embedded for industry verticals, namely retail and hospitality. “WEPOS is the first time we have developed an OS specifically for an industry vertical,” said Jason Demeny, the product manager for WEPOS at Microsoft. This will lead to inevitable problems with Microsoft releases, patching, security, and more as Microsoft begins to support variants of variants (Windows Embedded is a variant of Windows, and WEPOS is a variant of Windows Embedded - who has ownership of this mess? ).
The Novell approach, on the other hand, is to have Linux on each POS terminal, and then boot different personalities based on centralized policies. Each POS terminal can run text applications, GUI apps, or web enabled apps. But each POS terminal has the same software, the same deployment process, the same patching process, and the same patches. More consistent, more stable, and less cash register down time (and if you want to see a Circuit City CEO get angry, tell them that 4,500 associates can not sell TVs because of a Microsoft bug).
Perhaps the only thing more interesting than Microsoft’s misunderstanding of the market is IBM’s utter understanding of the market. See, IBM asked Novell to develop NLPOS as the base for IRES. They heard the demand from the retail sector to provide Linux on the POS terminal because retailers already had plans on putting Linux on in-store servers, and back office servers. One operating system from head-to-toe in retail.
But, this was not universal, and some Windows users wanted WEPOS. So IBM, being the pragmatic outfit they are, said “We’ll support whatever you want” and is now supporting WEPOS on the same hardware that IRES uses. Gotta love a vendor with a plan.
