Toshiba TEC Corporation, a leader in POS systems and technology for retailers, has announced its planned acquisition of IBM’s Retail Store Solutions (RSS) business. The news was released on April 17, 2012, leading industry executives and analysts to question the future of the two organizations and their respective partner networks.
“For several years Toshiba TEC has acted as contract manufacturer for NCR printers as well as other vendors and products,” Buzek explained in the article. “When it was Toshiba TEC only, which was a minor player in the U.S., this was never an issue. Now this could be a big problem. It’s too early to say.”
Buzek told Retail TouchPoints that this acquisition also could lead to new developments for competing organizations. “There is an opportunity for NCR and particularly HP to gain some of those partners over time,” he said. “Many exclusive partners also may now consider an alternative partner as a backup. So doors will open, no doubt. Funding of programs might be changing over time, as well.”
Richard Mader, Executive Director of the Association for Retail Technology Standards (ARTS), also pointed to an inevitable shift in company partners in light of new ownership and organizational integration.
“Based on the press release, Toshiba TEC and IBM are making it seem like there is no major change, just a shift in ownership,” Mader told Retail TouchPoints. “But overall, my guess is that this shift will have a big impact on current and future partners.”
Through the acquisition, Toshiba TEC and IBM will complete a multi-year business partner agreement, which will integrate retail store solutions for Smarter Commerce into Toshiba hardware. The deal transaction, which is worth approximately $850 million, is expected to close either late Q2 or early Q3 2012, according to a press announcement from IBM. In turn, Toshiba TEC will become an IBM Premier Business Partner for Smarter Commerce.
“There are some great synergies here, some potential holes, and some dramatic market disruption,” Buzek said. “IBM has never traditionally been strong in Japan. In fact, NCR has dwarfed IBM in the country thanks to a local manufacturing presence, but that advantage goes away quickly with this deal.”
According to the statement from IBM, this agreement was developed to help ensure that IBM’s portfolio of enterprise-level solutions and services in its Smart Commerce initiative, as well as Toshiba TEC’s customer-facing retail POS solutions, will be better available to customers worldwide.
In order to ensure a smooth transition, a new holding company will be created in Japan, and will hold the equity of “a number of companies organized in countries around the world.” Toshiba TEC will hold an 80.1% stake in the company, while IBM will hold the remaining 19.9% stake. In time, the holding company will be fully owned by Toshiba TEC, and will operate RSS’ business worldwide as Toshiba TEC’s core affiliates for retail. Overall, the company is expected to take over RSS’ total business operations, including all development, sales and related in-store maintenance.
“From my perspective, both IBM and Toshiba win here,” Buzek said. “It’s too early to tell if the IBM employees win in this deal but those I have talked to have shared the excitement of the fact that they will be a larger part of this new company, rather than an increasingly smaller part of IBM. I think Toshiba TEC gains access to markets it never has been that strong in, [such as] North America, EMEA and LATAM, but without the benefit of the huge IBM influence in the account over time. Many accounts were won by IBM because ‘no one got fired for buying IBM.’ What percentage of those won’t hold on over time because the company is now Toshiba TEC or this new joint venture? Time will tell.”
IBM executives emphasized the deal will be a positive for retailers, especially due to retailers’ growing demand for multi-channel commerce enablement, and more seamless experiences at the point of sale.
"Together, IBM and Toshiba TEC represent the broadest multi-channel offerings worldwide," said Craig Hayman, General Manager of Industry Solutions for IBM Software Group in a press statement. "The pace of retail expansion requires a strategy to serve this dynamic marketplace. This acquisition by Toshiba TEC creates not only the world’s leading point-of-sale company, but also a key business partner for IBM in its strategically important Smarter Commerce initiative. Retailers can invest with confidence in the proven abilities of these two leaders to deliver multi-channel commerce to more demanding consumers who want the same experience shopping online, in-store, mobile, social or by any other means."
Latest from Alicia Fiorletta
- Aptos Commits Millions To Launch Aptos Labs
- eBags Boosts Conversions 20% With Innovative Tech Investments
- Engaging And Empowering The Modern Workforce
- $20 Billion Sharing Economy: Competitive Threat Or Opportunity?
- Salesforce Acquires Demandware For $2.8 Billion To Create ‘Another Billion Dollar Cloud’