In its second-largest acquisition, Amazon buys the company for $970 million.
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The availability of new web-enabled POS systems that support the leveraging of POS data throughout the enterprise coincides with the increased availability of inexpensive Internet connectivity. Until recently, enterprise-wide systems that integrate POS data with other applications could cost about $100,000 in hardware costs per store, plus software licensing and maintenance fees, Melvin says. In addition, companies could pay thousands of dollars per month for frame-relay network connectivity.
Getting the politics right
Today, the availability of new technology makes it possible for small retailers to deploy integrated systems at much lower costs. For example, he notes, a retailer could pay about $3,000 per store for Unix- or Windows-based hardware, and get high-bandwidth DSL Internet access for under $50 per month. “Two years ago, most of this integrated enterprise data was going over private networks, but today a lot is going over the web,” Melvin says.
But the flexibility of web-enabled POS systems also makes up one of the biggest challenges for retailers because they must decide how to begin leveraging the systems. And that can involve interdepartmental politics.
“Getting the technology and the Internet connection up is not that hard, but getting agreement on what to first integrate with the POS system can be,” Gupta says. “Everybody needs to think about what the business objectives are, figuring out ROI and getting agreement from management on what the web-enabled POS system should be in years one, two and three.”