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Update: IBM amends POS focus, opens its cash registers to version of Windows

Point-of-sale leader embraces Microsoft's WEPOS software as alternative to Linux

By Eric Lai
February 26, 2008 12:00 PM ET

Computerworld - IBM said Tuesday that it has started installing a rapidly growing retail version of Windows in its computerized point-of-sale (POS) terminals and other devices it markets for use in retail stores and restaurants.

IBM plans to offer Microsoft Corp.'s Windows Embedded for Point of Service (WEPOS) software in its market-leading SurePOS machines, as well as its self-service checkout systems and the interactive AnyPlace Kiosk product line, which was introduced last fall.

WEPOS, which is designed for smaller retail stores, is a three-year-old operating system that was updated by Microsoft last April. The number of WEPOS users grew 250% last year, according to a report released last week by IHL Services Inc., a Franklin, Tenn.-based market research firm that focuses on retail technology.

"Every provider knows that to be successful, you have to be a good steward of Windows," said Art Lincoln, a product manager in IBM's POS division. "In general, WEPOS is the best Windows platform for the retail industry."

IBM said that its POS terminals will also continue to be sold with a retail-oriented version of Novell Inc.'s SUSE Linux. And the company insisted that the decision to pre-install WEPOS, which actually was announced by Microsoft, doesn't diminish its level of support for the open-source operating system.

"We are not dropping our Linux focus," an IBM spokesman said. "That would be crazy."

But IBM's embrace "is a big deal for WEPOS," said IHL President Greg Buzek, who noted that the vendor is the "undisputed" leader in sales of POS terminals.

IBM has long claimed to be operating system-agnostic in the POS market, where it supports a variety of software platforms, including DOS and various versions of Windows. But Buzek said IBM had "clearly been leaning toward" two retail operating systems: its proprietary IBM 4690 software, which runs in various SurePOS models, and SUSE Linux.

Despite their antiquated, DOS-like user interfaces, 4690-based terminals still bring in about $1 billion worth of annual revenue in North America, according to IHL, although most of that is in the form of maintenance fees.

IBM has pushed users of the proprietary terminals who want to switch operating systems to migrate to SUSE Linux, which it began offering in 2004.

But after an initial surge in the overall use of Linux-based POS systems within the retail market, their sales growth quickly slowed as a result of a combination of Microsoft's introduction of WEPOS and the natural inertia of users that had already invested heavily in Windows-based devices.

Last year, Linux-based POS devices generated about $475 million worth of revenue in North America via device shipments and maintenance fees, according to IHL. But that was just one-eighth of the $3.8 billion pulled in by Windows-based retail terminals, the firm said. That gave the various versions of Windows a 68% share of the overall POS market, which IHL put at $5.56 billion.

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