back to article Toshiba gobbles IBM's POS biz for $850m

As was rumored, IBM is indeed selling off its Retail Store Systems (RSS) division to competitor Toshiba. And it will be getting $850m (£530m) for it. The RSS unit is a cross-divisional piece of IBM that sold around $715m worth of hardware in 2011 according to Big Blue's financial results - up nearly 12 per cent and growing twice …

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WTF?

No money in hardware?

Why does IBM seem obsessed about getting out of the hardware business? Even the guys at HP figured out that gutting the PC business was a bad idea since they were able to sell into consulting engagements. And those were commodity boxes. This is retail POS hardware, which is hideously expensive and high-margin.

I have no idea what's taught in MBA classes that drills the "physical products = bad" mentality into the latest generation of managers. Someone has to make good quality equipment, and a "smart" consulting company should know that having your own hardware division to directly push boxes to suckers^Uclients is a good thing.

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Re: No money in hardware?

To be fair, it works well for IBM but their competitors are falling over themselves trying to emulate their business. What IBM has done here is make sure they can offer their ridiculously large service package on more hardware.

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Re: No money in hardware?

You have a number of misconceptions about the POS retail marketplace. First, why are you comparing HP PC's to retail POS hardware? Sure, some retailers make the poor decision to go with a PC cash drawer solution (off the shelf PC + retail peripherals) and three years into their purchase they typically regret their decision and migrate back to retail-optimized equipment. Second, POS hardware is not "hideously expensive and high-margin." Both the retail customer and other POS competitors ensure that POS hardware pricing is competitive. I can assure you that no POS company is getting "rich" off their hardware alone. Now, bundling that hardware with software and services, does drive higher margins. And thirdly, having "your own hardware division" is not necessarily an advantage. Factor in the manufacturing costs, logistics, and various headcount costs of running a hardware division, throw in your marketing and sales teams costs, and suddenly you got a lot of overhead to overcome. Also, give the retail customers "some" credit on "smart buying" instead of "suckers R Us" mentality.

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Re: No money in hardware?

IBM has never been interested in the "hardware" business, but they have been and remain very interested in the systems business (hardware plus software). POS is being taken over by Windows, which means it is all going to commodity route. IBM doesn't want to fight with white box POS companies to see who can get a Windows POS out the door for the lowest cost. Only Microsoft wins these battles.

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"Hewlett-Packard, which is number two in POS systems"

I disagree, but this article is clearly using a different expansion from 'POS' than I am.

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Anonymous Coward

IBM

IBM have realised that there is more profit in software (high initial cost, low reproduction cost, high revenue) than hardware (high initial cost, medium reproduction cost, low revenue).

It is a bit of a shame, fond memories of IBM PCs, seeing IBM PoSs when I briefly worked for them.

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POS is commoditizing... thanks MS

IBM is getting out of POS for the same reason they got out of PCs and the same reason HP tried to dump PCs (before they realized that they are a PC company). Microsoft is taking it over. When IBM could offer their own OS on POSs, they could make a decent profit. Now it is all going to Windows PCs with a cash drawer and a scanner and it is a race to see who can make the hardware cheapest as with all Windows hardware.

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