IBM, Toshiba realign retail businesses in $850m deal

IBM’s decision to sell its Retail Store Solutions business to Toshiba for $850 million seems a win-win outcome for both companies, with IBM to establish Toshiba as a premier business partner and work to link Toshiba’s retail solutions with the industry-specific expertise IBM is cultivating with its smarter commerce campaign.


According to market analysts’ Technology Business Research (TBR), the deal, expected to close by early in the third quarter this year, will provide Toshiba with the most widely deployed retail solutions install base globally and additional revenue from outside Japan. On the flipside of the deal, TBR points to the fact that IBM is shedding the lower-margin hardware layer of its retail business to enable a sharper focus on core initiatives, such as Smarter Commerce, which it says increasingly revolve around differentiating and meeting customer demand for a higher ROI with software and services.
 
Commenting on the overarching value proposition of IBM’s broad smarter planet initiative and what it calls the “more discrete” Smarter Commerce strategy, TBR says it is to provide actionable insight and business value from raw data, and represents a shift more distinctly to analysing the streams of data coming in from the point of sale. It also says that IBM’s strategy for Smarter Commerce will shift more distinctly to analysing the streams of data coming in from the point of sale.

TBR analysts observe that the sale of RSS elevates software and services to the forefront of IBM’s retail strategy, with the company shifting its focus from hardware to expanding its portfolio of smarter commerce software and services, positioning it to “more effectively capitalise on what it has identified a $90 billion global opportunity.”

And, according to TBR,Toshiba’s purchase of IBM’s RSS portfolio creates opportunities for new revenue streams to be established internationally for the Japanese electronics giant, enabling it to target new vertical markets and a broader base of customers, and to leverage IBM’s extensive knowledgebase and position itself to reap the benefits of IBM’s Smarter Commerce initiative.

The analyst firm says that Toshiba, long focused on Japan for revenue derived from sales of POS solutions, can now expand its addressable market to an additional 33 countries through its acquisition of IBM’s RSS division, and it believes this will position Toshiba as a leader in worldwide POS solutions revenue: IBM RSS posted $1.2 billion in POS solutions revenue in 2011, while Toshiba posted $2.3 billion.

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Peter Dinham Friday, 20 April 2012 00:20