Arik Hesseldahl

Recent Posts by Arik Hesseldahl

NCR Turns the iPad Into a Cash Register

One summer when I was 5, my grandfather ran a small neighborhood convenience store in his town in Minnesota. I thought it was the best thing ever to hang out with him for part of the day, “working in the store.” Naturally, my favorite thing was to operate the cash register.

I was just learning to read, but I remember that it had a label on it that said “National.” It stood for the National Cash Register Company, which today is known as NCR. As it happens, I had a meeting on Tuesday with NCR’s CEO Bill Nuti at Fortune Magazine’s Brainstorm Tech conference being held here in Aspen, Colo.

The memory about my grandpa’s cash register came up at the start of the meeting, when I admitted rather sheepishly that I knew next to nothing about the modern NCR. He listened politely as I described this machine that loomed so large in my childhood memories, as he must have done a thousand times before. Things like that happen when you run a 128-year-old company, though it wasn’t exactly the reason he had called me.

You probably encounter NCR’s gear every day, several times a day, as you go about your business: Buying coffee and groceries, getting cash, confirming your seat on a flight. NCR does business with all the biggest retailers, restaurants, hotels, banks and airlines, building ATMs, point-of-sale systems, and self-service kiosks of every stripe.

But NCR wants a new relationship with small and medium businesses, and today it’s about to start. And it’s going to do it via Apple’s iPad.

Today, NCR will launch Silver, a combination of hardware and an app that will turn an iPad or iPhone into a sophisticated point-of-sale system that, among other functions, is tied to critical business functions like inventory tracking, loyalty marketing, profit tracking, and a lot of other things.

Other than the app that gets installed on the iPad itself, the software does its heavy lifting in the cloud. Nuti told me that NCR built a new data center just for this effort. The point is to bring the kind of point-of-sale technology that is typically available only to larger businesses in an affordable package.

And there’s something to be said for the power of the NCR brand. It processes some 110 billion transactions around the world every year. It has a dedicated on-the-ground sales force, but also sells its gear through channel partners like banks and payment processors.

Historically, NCR was all about small business. It practically owned the business of selling cash registers to all those neighborhood shops that were — and still are — a critical backbone of the U.S. economy. “We had something like 100 percent market share in 1925,” Nuti told me. By 1968, electronic cash registers from companies like Sanyo and Panasonic were in favor, replacing the clunky, noisy, electromechanical models that NCR still made. “NCR missed the transition to digital,” Nuti said, “and it hasn’t been engaged with small business owners since 1971.”

NCR is now a $5.4 billion (2011 sales) concern that caters mostly to the biggest household names in retail, banking, travel and hospitality. That makes today’s announcement all the more weighty: Today marks the launch of NCR’s first new division aimed at small businesses in 50 years.

Right now, the NCR business unit responsible for Silver is smallish, on track to bring in $30 million in revenue. Within three year, Nuti wants it generating $1 billion in revenue. The target is simple: Sign up a million small-business customers. (He defines a small business as one bringing in annual revenue of anywhere from $50,000 a year to about $2 million.)

And we’re not just talking about mom-and-pop coffee shops, but also mobile-business owners, like the guy who cleans the pool and the guy who cuts the grass. The application works as readily on an iPhone or iPod touch.

It wasn’t long before Nuti brought up at least one competitive target he has in mind: Square, the upstart mobile payment service started by Twitter founder Jack Dorsey. Square is very different from Silver, Nuti says. Business owners who use it don’t get access to the information they generate over time. “The bill you get from Square doesn’t tell you how profitable a customer is, or how to get them back in the store.”

The first thousand customers who sign up for Silver will pay $39 a month, for as long as they use the service. For everyone else, the going rate will be $79 a month. It will be available directly from NCR, but also through its extensive network of distributors: Bank of America merchant services will sell it, as will payment processors like First Data.

The aim is to bring to bear NCR’s sales force, distribution, infrastructure and service capabilities into a huge effort that will disrupt the efforts of companies like Square and Intuit and a scattershot of other upstart companies who also sell point-of-sale apps for the iPad. “There’s a lot of these small point-of-sale outfits that are cropping up everywhere. None of them can do what we do,” Nuti said.

Next year, there will be a version for Android devices, and international expansion into the U.K., Brazil and China.


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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google