After Early Surge, Adoption of Linux for Retail Point-of-Sale Apps Slows

Computerworld - The holiday shopping season is bringing tidings both comforting and not so comforting to Linux vendors that are looking to break into the Windows-dominated market for point-of-sale terminals used in retail stores.
Linux's share of the retail POS market is nearing 10%, according to Greg Buzek, president of IHL Consulting Group Inc. in Franklin, Tenn. But he said the rate of the open-source operating system's gains is slowing, largely because of Microsoft Corp.'s introduction in May of a scaled-down version of Windows that is tailored for retailers and has a cut-rate price.
But other analysts and some IT managers said that Linux is hitting a natural plateau. After attracting some early adopters, it now has to win over retailers that have invested heavily in Windows technology and Microsoft training for their IT staffers. Those companies may need strong reasons to make a complicated and potentially expensive switch to a different system.
"I always love those technology conversations where everyone assumes you have a 'green field' environment," said Robert Fort, IT director at Virgin Entertainment Group Inc., which operates 17 Virgin Megastores in the U.S.
Los Angeles-based Virgin is upgrading about two-thirds of the 300 POS systems used in its stores from 5-year-old green-screen terminals running IBM 's 4690 operating system to Windows 2000 machines. The new systems will also run software called TransactionWare GM from Triversity Inc., a Toronto-based vendor that SAP AG acquired this fall.
"We run Windows Server 2003 and Windows XP on the desktop, so my administrators are very familiar with the Microsoft kernel," Fort said. He did strongly consider 360Commerce Inc.'s Java-based POS software running on Linux. But Fort said he ultimately decided that the slightly more expansive features offered by 360Commerce weren't worth the extra cost and hassle.
Virgin is running Microsoft's new Windows Embedded for Point of Service software on 206 in-store kiosks rolled out in October. Fort said that WEPOS costs 40% less than the older Windows XP Embedded technology and is easier to maintain. It also supports Internet access, multimedia applications and plug-and-play connectivity for handheld scanners and other devices used by POS systems, he said.

Market Positioning
WEPOS will eclipse other flavors of Windows as Microsoft's primary POS offering and prevent Linux's market share from exceeding 15% "anytime soon," Buzek predicted. Just 71,000 of the POS terminals sold in the U.S. last year ran Linux, making up 6% of the market, he said. He added that Linux's share should increase to 8% or 9% this year.
IBM's deal earlier this year