Evan Schuman's StorefrontBacktalk

We have always joked that IBM’s chief strength is account control. Nowhere has this been more evident than in these segments.

But IBM RSS has always benefitted from the C-level relationships, advisory councils and overall retailer vision it is able to offer the enterprise. IBM has always sold the vision of “this is how your company could operate,” because it could offer the entire IT infrastructure, support, consulting, etc. Although IBM sells this vision of the company, competitors were limited to pushing point packages and were often simply overwhelmed in comparison.

As an analogy, IBM RSS has enjoyed the benefit of being the master builder selling the house, while others come in selling the kitchen appliances or bathroom fixtures. Not that there is anything wrong with the RSS business but, in the next couple of years, it will quickly lose that advantage and need to stand on its own. Will customers continue to choose the Toshiba TEC/IBM approach? Some will and some won’t.

But for the first time in nearly 25 years, a huge part of the U.S. market (one that is not dramatically impacted by mobile POS threat) will now be on a more level playing field. This is a benefit to HP, NCR, Microsoft, Epson, Retalix, Dell and others.

One thing still to be worked out is other vendors’ relationships with Toshiba TEC. For several years, Toshiba TEC has acted as contract manufacturer for NCR printers as well as other vendors and products. When it was Toshiba TEC only, it was a minor player in the U.S. and this was never an issue. Now, this could be a big problem.

For those of you who have read this far, I will share a little-known industry secret. Most don’t know that IBM was actually formed out of NCR in a way. Tom Watson once worked for John Patterson, CEO of NCR. When Patterson fired Watson, Watson vowed to build a firm that would dwarf NCR, and he did. Years later, the two companies buried the hatchet. They even went so far as to create a patent sharing “we won’t sue you if you violate our patent” agreement, I think in the 1950s, that still stands today.

This is why in a world where Oracle and Google are going at it, and Apple and Google and Motorola and Samsung are suing each other, you have never seen that between IBM and NCR. These firms have always been “good” competitors—not in any way that would invite thoughts of collusion, but rather they knew that if the deal came down to one or the other, there would never be a race to the bottom. For my own curiosity, I wonder what happens now, as Toshiba TEC and NCR certainly do not share such an agreement.

From my perspective, both IBM and Toshiba win here. 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 (North America, EMEA and LATAM), but without the benefit of the huge IBM influence in the account (over time).

IBM won many accounts, because “no one got fired for buying IBM.” What percentage of those accounts won’t hold on over time because the company is now Toshiba TEC or this new joint venture?

Other winners I think are HP, which has grown to number 2 worldwide in PC-based POS shipments (number 1, if you include off-the-shelf HP PCs that get used for cash registers); NCR and Retalix, which now will have a more level playing field in certain segments; and Epson, which will have more opportunities to sell its printers.

You can reach Greg Buzek by E-mail.