IBM announced today that it is selling its $1.15B Retail Store Solutions (RSS) business delivering and supporting retail point-of-service (POS) terminals to Toshiba for a reported $850 million. IBM will continue to have a nearly 20% stake in the new company formed by the deal, with plans of divesting that over the next three years. With retail being such a core vertical market for IBM, the deal begs some questions.
Why would IBM sell such a significant business in a core vertical market?
Channel-centric solutions are on the endangered species list. While I do not expect to see a bunch of stories out of Eugene, Oregon about protests over the environment for retail POS systems,* the market for POS systems has changed dramatically over the last few years. Retail store systems have become a maintenance business with little growth. Retailers are closing stores, distressed commercial retail real estate is everywhere but the top luxury malls and downtown cores, and there is very little incentive for retailers to upgrade or replace retail systems today, in part because . . .