To compile the table in this article we worked with enterprise sales reps at the leading POS companies, enterprise merchants themselves, and vendors to enterprise merchants who often know the goings on because they need to integrate to the new POS system being brought in.
The table spans enterprise POS dynamics over the past two years. We have not included all the mid-market wins, but this table should be sufficient to analyze the trends in the industry; namely, even enterprise merchants are going to cloud POS.
Why?
Cloud POS has “crossed the chasm” in the sense that they’ve proven they have the feature parity, operating performance, and lower total costs of ownership than their legacy POS counterparts. If you asked us to summarize which cloud POS companies we see in legitimate enterprise installations, they would be, in alphabetical order:
We don’t include Toast on this list as we’ve been told from numerous sources, not withstanding the mass firing of their enterprise sales team and division head, Rick Lamy, that Toast is pulling out of the enterprise market.
Xenial gives us pause because Global Payments, like NCR, which we’ll discuss shortly, is an epic disaster of an organization. The Global Payments MO is simple: buy software, attach payments, ratchet up tons of fake fees, strip out R&D so the software dies, then find another software host to suffocate. Ask any analyst and they’ll tell you this is the Global Payments playbook, pure and simple.
But first, here’s the table.
It should be clear that if anyone is a loser, it’s NCR. And no wonder: NCR has neglected any meaningful investment in their POS systems over the past decade measured by industry norms.
Even worse, when given the opportunity to make changes, NCR’s new management decided to prioritize a financial engineering exercise over meaningful structural advancements.
It’s why you hear merchants complaining that NCR still can’t get EMV to work despite being 5 years past the EMV liability shift, and why online ordering from NCR Aloha is effectively unworkable.
But hey, who needs a working product when you can convince merchants to pay you $7,000 a year for the same pile of shit you sold them years ago, right?
Unbelievable.
Actually, it looks like NCR’s actions are finally catching up to them in both enterprise and SMB, the latter of which Toast is decimating at the pace of 22,000 sites per year. Seeing as how Toast’s average merchant does about 35% more revenue per store than the industry average, we’d bet that Toast is almost exclusively taking market share from NCR and Micros.
Just according to this table, NCR has lost or is in the process of losing 12,350 locations – 20% of their nominal installation base – and that’s not including the SMB and mid-market, where NCR is surely losing 10,000+ sites annually. We’ll shortly publish a presentation we made for NCR’s now-CEO Mike Hayford back in early 2018, when he assumed the CEO role, to show you how poorly NCR’s own enterprise customers, who sit on NCR’s own customer advisory board, think of NCR.
And guess what: it’s only gotten worse! As COVID has made abundantly clear, POS systems need to connect seamlessly to third party software to survive. Trying to do this on Aloha has proven so painstaking for many of NCR’s largest customers that they’ve drastically expedited their POS procurement process and the buying process that might have been scheduled for 2022 and beyond is happening right now.
NCR’s hiring of Mike Hayford was undeniably the best possible move for all of NCR’s hospitality competitors. We don’t know how NCR’s ATM (banking) and Retail business lines are run, but we can’t imagine that the Hospitality division would be so dissimilar, and that all three suffer under the reign of what even current employees decry as a self-described omnipotent being.
We don’t touch public companies, but NCR has to be the biggest short of all time. They’re going to have to sell the hospitality business before it goes to zero, but at this rate who would want it? The only way we see NCR increasing Hospitality revenue is by charging a withering base of customers to the gills, at which point the camel’s back breaks and they choose another POS.
Prediction: NCR will auction its Hospitality business within 24 months while it still has something left to sell.
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