The Changing Face of Australian POS Software

POS SOFTWARE

A significant shift has occurred in our POS market—one of our long-standing competitors, Tower System, was just sold. I'll wait for the formal announcements before commenting in detail.

This latest acquisition continues the trend in Australia of our local Point-of-Sale (POS) software industry being taken over by large American companies.

Forty Years of Industry Change

This latest market movement brings to mind a pivotal industry meeting from twenty years ago. Six of us were there, representing different POS companies, and we were all passionate about the future of the news-agency industry. It's pretty sobering to realise that I am the only one still active in the industry from that group. All the others have passed on; I am the last one left. It's particularly deep as I have known this guy for almost 45 years. 

The Complexity of Market Consolidation

What's particularly interesting about this recent acquisition is the overlap the acquiring company already has in the market segments of the company it just brought. I also made an offer, but I did not offer enough.

Market Overlap Analysis

This acquisition is notable for this crucial reason: the acquiring company already has a strong presence in many of the target company's market segments, e.g., e-commerce, convenience stores, retail, non-profits, grocery, liquor, and pet supplies, so the acquiring company will face critical strategic decisions based on my experience with similar acquisitions. They'll need to evaluate which market segments to prioritise and which ones to streamline.

Final Thoughts

While I am the last one standing from that meeting 20 years ago, what I do know then as now is that the fundamentals of good service and understanding your market always stay in style.

Comments

As a current Tower Systems user, I have some questions regarding the recent takeover of Tower Systems, I wonder whether it will be going up again my existing software support package?

Dear Pauline,

These messages are inappropriate for this forum as we have no connection to Tower Systems.

What happens with their ownership changes is something their new bosses' future plans are probably working through now. 

I suspect we are dealing with a premature announcement, and the current silence is due to Tower System being instructed to maintain confidentiality. I am sure they have signed an NDA, and I feel this has been broken. If so they will be told that.

Here are my projected time table:

Scenario Analysis

1. Deal Proceeds as Originally Announced

  • Standard due diligence process by Vela (estimated 6-12 weeks)
  • The holiday season will likely cause delays
  • Expected completion: Late January/Early February 2025

2. Deal Termination

  • A likely outcome: No formal announcement

3. Deal Renegotiation

  • Extended timeline required for:
    • Negotiating new terms
    • Potential fresh due diligence
  • Projected announcement: March/April 2025

This uncertainty means we may face a waiting period of up to six months before gaining clarity on the situation.

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