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IBM Sells POS Unit in Lenovo-Like Deal

Toshiba Tec is going to buy the business for about $850 million

In a deal reminiscent of IBM selling its PC unit to Lenovo, its printer unit to Ricoh and its hard drive unit to Hitachi, Big Blue is dumping its point-of-sales terminal business figuring it's got better things to do like software and the cloud.

Toshiba Tec, the Japanese maker of scanners and barcode machines, and 50% owned by Toshiba, is going to buy the business for about $850 million.

Toshiba and Toshiba Tec are also thinking about the cloud.

The systems IBM's Retail Store Solutions (RSS) sells are used to process and record transactions, manage inventory and collect and analyze data including purchasing trends. The acquisition will make Toshiba Tec the world's largest vendor of retail machines and boost its collaborative cloud platform.

It's agreed to flog IBM's Smarter Commerce platform under a separate multi-year agreement. Smarter Commerce is all about community, collaboration, process and analytics.

RSS, which has reportedly been seeing double-digit growth, had revenues of around $1.15 billion last year and about 1,000 employees worldwide.

IBM should pocket some of the acquisition money by the end of this quarter or early in Q3 when the deal closes. Some it will get on the first anniversary, but like the Lenovo deal, it's going keep a 19.9% stake in a holding company that will be set up so the complete buy-out won't be for three years.

Also like the Lenovo deal IBM's boy will run things. Steven Ladwig, the general manager of RSS, will become CEO of the new US company with headquarters conveniently in Raleigh, North Carolina.

Toshiba Tec, which is supposed to have a 6%-7% global market share in POS terminals, says it's big in Japan and Asia-Pacific and the acquisition will help it move into North America, Europe and plum emerging economies.

IBM has 20%-25% market share and services customers like Wal-Mart and Toys R Us. It's also moved into India and Southeast Asia. IBM will continue to service customers under a separate multi-year service agreement.

HP is number two to IBM's lead in POS terminals.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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