TechNavio has been observing with keen interest the potentially disruptive impact tablets had on traditional point of sale (POS) systems, in the Hospitality industry. It seems quite difficult to argue in favor of traditional POS systems, which generally cost upwards of $10,000, against the monthly subscription pricing model available with tablet-based POS systems. However, there are factors other than cost to be taken into consideration when evaluating the impact of tablet-based solutions.
NCR Corp. and MICROS Systems Inc. dominate and collectively control a little more than a third of the POS market in the US. However, the market for POS systems in the Hospitality industry is highly fragmented. Small-sized POS solution providers account for nearly a half of the POS market in the hospitality industry. Thus, the fragmented nature of the market has opened up several opportunities for tablet-only vendors to grab market share. For example, Square Inc’s Square Wallet processes credit transactions for Starbucks which gives an early indicator of the possibilities for non-traditional mobility based solutions.
Currently, NCR and MICROS are clearly ahead in the POS market in terms of the width and depth of functionality offered by their products. However, the key vendors in the market which offer POS systems such as NCR, MICROS , Menusoft Systems Corp. POSitouch, and Aldelo Systems Inc, etc would need to keep on innovating in terms of solutions on offer to maintain the lead. It’s just a matter of time before tablet-only POS system providers narrow the gap with the functionality of traditional systems. As long as the solutions offered by players such as NCR and MICROS are unrivaled in terms of efficiency and functionality, it would be difficult to dislodge them from their dominant position.
Traditional POS system vendors have an established track record in the provision of POS systems and services for the same. In our view, restaurant managers are quite apprehensive about handing over a 24/7 mission-critical asset, (a cash register in this case) to a vendor whose service capabilities are not yet proven. It would be a challenge for tablet-only POS systems vendors to match the service capabilities offered by the traditional POS system vendors.
We have been tracking POS hardware and software markets globally for quite a while now, and we believe that traditional POS systems will dominate the POS market in the Hospitality industry in the near term despite they seeming to be more expensive. However, it should not come as a surprise if POS-as-a-service gains traction, disrupting the market.
Some of our existing and upcoming reports with regard to the POS market are as follows:
- Global NFC PoS Terminal Market 2011-2015
- NFC PoS Terminal Market in the Americas 2011-2015
- Global POS Hardware and Software Market 2011-2015
- Global Mobile POS Market 2012-2016
- Global Wireless POS Terminals Market 2012-2016
- Global PoS Market in the Hospitality Industry 2012-2016
- Global PoS Software Market 2012-2016
- Global PoS Hardware Market 2012-2016
- Global Electronic Fund Transfer POS Systems Market 2012-2016