Archive | July, 2016

Cloud POS is Quietly Increasing Prices…

31 Jul

Lately I’ve noticed that cloud POS prices have been increasing. Wait, that’s a lie. I didn’t notice anything: resellers of cloud systems and noticed that merchant product costs are going up, but their payouts are staying flat. They told me this, so I investigated.

This had me wondering: are cloud POS prices going to continue rising? Are we at the end of a venture-subsidized bubble and do POS prices rebound? Or are the cloud ISVs simply fiddling with their business models because penetration isn’t happening as fast as they had hoped?

Any POS company worth their salt understands the revenue potential in having SKU data available. The clever cloud companies know this model to be the future of their survival. What they’re betting on is the time it takes them to get there.

If you’re taking venture capital money today, you need to be cranking out $100M in annual revenue very quickly. If not, investors are on to the next one. And if you can’t increase the number of accounts to reach those lofty revenue goals, you have to increase the average sales price to the existing accounts.

This is a press release announcing Shopkeep’s pricing at $50/mo, screenshot below.

But Shopkeep’s prices are no longer that low. Today, Shopkeep charges $69/month.That’s a 40% jump.

NCR has also raised prices on its cloud Silver product. What was once $59/mo has increased in various tiers. Here are some screenshots of their new pricing with #6 explaining how to handle subscribers of the original $59/mo plan.

Who knows what NCR is doing, considering they had a botched acquisition, are saddled with another billion dollars in debt on top of their existing $4B, and have cultural issues galore.

Are there other cloud systems that are following this trend? I’ve only spent a small amount of time pulling this data, but surely there’s more to be had…

Why Mobile Payments Won’t Take off in Brick and Mortar

31 Jul

People with a modicum of healthy scrutiny are definitely giving mobile payments a sideways glance. “It’s the next big thing!” we were told. Brands with household names like Google, Apple and Walmart were involved: surely this must be it.

But usage numbers are still trivial, even though we’re several years into mobile payments with multi-billion-dollar investments from huge corporations. Forrester Research hypothesized that only 1% of consumer spend would come from mobile by 2019 – that’s including online, in-person and peer-to-peer.

Current numbers for in-person, brick and mortar payments (i.e. proximity payments) are expected to be around $30 billion this year. This in a domestic universe of roughly $4 trillion in brick and mortar retail spend. For we mathematically lazy folk, that’s just three quarters of one percent: watch out!

For those who have been paying attention, there are two paths to skinning this cat: convince merchants to accept mobile payments, or convince consumers to adopt mobile payment applications and put pressure on merchants.

The last route was tried first – mostly because it’s a substantially cheaper option. Mobile payment apps abounded. Apple had a mobile payment method, as did Google. Then came phone companies, large retailers and even startups, all bumbling their way into the space.

The assumption with the consumer-driven approach is that you’re solving a problem painful enough for consumers to demand it. But that’s not the case at all. Proximity payments (those that occur in-person at the register) is a fabricated problem. My credit card is secure. It will not run out of battery. It’s waterproof. It weighs next to nothing and I can stick it in my sock.

That’s not to say that mobile payments aren’t growing elsewhere. If I want to pay for an Uber, buy something on eBay, or order something to-go, mobile payments are a great use case. But going to a retailer and paying with my phone in the checkout line? Seems trivial. Retailers have seen how slowly the uptick in consumer adoption for proximity payments has been and are doing things like giving associates an untethered iPad for card payments, or installing tablets at restaurant tables to eliminate register queuing.

The phone needs to fully replace the wallet if you want to make it the center of in-store payment. Right now my wallet carries my ID, which is not legally replaceable with my phone. It carries annoying receipts. It carries insurance cards and public transportation passes. What’s the hassle of carrying around a credit card if I already need a wallet to carry around all this other stuff?

On the other end of the stack you need to acquire merchants to accept mobile payments. As a consumer, this will need to be places I frequent at least weekly. Grocery is a good candidate, as are restaurants (good luck with that fragmentation problem). Retail is not an ideal candidate, since, at it’s current growth rate, the majority of spend will betransacted online in a little over a decade.

This is all well and good, but has anyone stopped to ask: where’s the value for the merchant?

In most cases the merchant needs to spend thousands on new credit card processing hardware to communicate with mobile devices. Apple has stated it won’t share any customer payments data with the merchant, so there goes a merchant’s entire marketing program. Google monopolizes data, so odds are that the merchant would pay for data insights or advertising products to see anything useful.

The simplest value, of course, is saving the merchant 3% on all purchases by eliminating interchange (the fees credit card networks, processors and the banks take from each transaction). If mobile payments is as great as is touted, there’s no reason for credit cards at all: consumers could use bitcoinVenmo or some analogue to pay for goods, where payment transfer costs are pushed to zero. I think just about every merchant would sign up for that: an instant 3% increase to top-line revenue by doing nothing.

But here’s the issue: the entire payments chain is incentivized NOT to let that happen. Visa and the other payment networks earn ridiculous margins. Visa has a near 50% profit margin. By comparison, Google (Alphabet, whatever) “only” earns a 21% profit margin. Card issuing banks (the banks that sponsor your credit cards) also earn healthy revenue on each transaction, as do the large processing companies like First Data – whose job is to ensure merchants accept card payments.

Now why would all these players in the payments network, who own the merchant relationships, push merchants into accepting mobile payments and risk the possibility of being disintermediated? The simple answer is they won’t. And if you were the CEO for any of these companies you’d arrive at the same conclusion too.

So ultimately I don’t care how many surveys mobile payments companies produce: the market is not moving. I don’t expect proximity payments (in-store payments) to be a “thing” in the near future until it solves a real problem. Consumers have said there’s little value, and merchants who think there is value are finding in-store workarounds.

Is PCI’s QIR the Achilles Heel for Cloud POS?

31 Jul

The Payment Card Industry Security Standards Council (PCI SSC) has established a program designed to mitigate card theft. At this juncture, most folks in the industry have surely heard of it: the Qualified Integrator and Reseller (QIR) program. The QIR effort is part of a larger initiative by Visa to mitigate cardholder data security breaches at small businesses – which typically do not have the same data security resources as larger organizations. Visa is relying on the PCI SSC to develop and maintain the QIR program.

The PCI SSC is uniquely situated to manage the QIR program standards since they also manage the Payment Application Data Security Standards (PA-DSS) program. The PA-DSS program “promotes the development and implementation of secure commercial payment applications that do not store prohibited data, and helps to ensure that payment applications support compliance with the PCI DSS.” It’s a verbose way of saying that the program is designed to minimize card theft and security breaches.

The QIR program was created in response to a belief that certifying installers of payment equipment would result in lower occurrences of theft. Protect the entire card environment, if you will. The QIR program explicitly lays out “guiding principles and procedures for the secure installation and maintenance of validated payment applications in a manner that supports PCI DSS compliance.” So if you install, support or maintain payment applications, QIR qualification ensures you’re educated to do so in a manner that conforms to PCI DSS.

Now this is where it gets interesting. According to Dustin Niglio, CEO of Payment Logistics and an expert on PCI, the QIR program implicitly defines its scope by stating that it applies to “secure installation and maintenance of validated payment applications”.  A validated payment application is one that has been reviewed by a PCI SSC Qualified Security Assessor (QSA) and found to be compliant with the Payment Application Data Security Standards (PA-DSS). The Payment Card Industry Data Security Standards (PCI DSS) require third party applications which process, store or transmit sensitive cardholder data to be PA-DSS validated. So in order for a merchant that uses a third party payment application that handles sensitive cardholder data to be compliant with the PCI DSS, the payment application they use has to be PA-DSS validated.

However, there exist payment solutions that isolate cardholder data to purpose-built payment devices and transmit that data directly to upstream payment processors. These payment devices fall outside of the scope of PA-DSS and ISVs (Independent Software Vendors) who utilize these devices for all handling of sensitive cardholder data within the merchant environment consequently place themselves, and their dealers, outside the scope of QIR.


Acronyms aside, what does this mean in plain English?

The card networks (specifically Visa) think small businesses are not adequately protecting their data. To minimize data theft and losses that arise from said activity (as if they don’t already have insurance against such fraud) they decided to force a new program (QIR) onto the payments channel – the cost of which is ultimately footed by the merchant. The QIR program says “Hey, if your payments system sees any sensitive cardholder data that might be stolen, you, merchant, need someone who’s ‘QIR certified’ to install and maintain your payment systems.”

If there is a breach and it’s discovered that the merchant is using a validated payment application that hasn’t been installed and maintained by a QIR-certified agent, the card network will assess fines to the merchant’s payments provider… even though the cost gets passed to the merchant. Make sense?

Moreover, the real-life scenario creeping into my mind is this: what happens with cloud POS installs? Many cloud ISVs simply drop ship the hardware and software to the end merchant. The merchant puts the “blue plug in the blue port” and setup is done. But merchants are not QIR certified… now what?

The merchant/ISV will need to find a payments provider that offers a solution which removes them from the scope of QIR. That is, the solution isolates all handling of cardholder data; any data within the merchant’s environment must be ran on a purpose-built, plug-and-play device that does not allow for remote access into the cardholder data environment. Most ISVs and merchant acquirers offer such options, dependent on compatibility with upstream processing networks, costs, etc.

Visa went so far as to address the same question.

Q: What if a service provider ships POS terminals to a merchant? Is that service provider in scope for the QIR program?

A. If the service provider is configuring the application within the terminal for the merchant and will support or service the terminal via remote access after installation, the service provider is in scope for the QIR Program and should complete the certification process. A service provider providing a merchant with a simple plug-and-play device which will not allow for remote access into the POS environment is not in scope of the QIR program (i.e. QIR is irrelevant).

Dustin finds Visa’s terminology interesting. “Instead, Visa should have used the term ‘remote access into the cardholder data environment’” Dustin says. “Furthermore, in my opinion, it was not correct to focus on ‘remote access’ as the qualifier of being in-scope of QIR. But I understand why they did it.”

Dustin details that, “The number one issue Visa has seen with small merchant data breaches has been the use of insecure remote access configurations by POS dealers. Many POS dealers have a long running habit of setting up unattended support on merchant POS servers and then using the same remote access password in their unattended support solution for all of their sites. So once a hacker compromised the password for one site, they could locate other customers of the dealer and easily hack into those sites remotely by using the same or a similar password. It’s such an easy vulnerability to mitigate, yet there are so many instances of this happening that Visa finally had enough and now we have QIR. Of course, this is my opinion, but Visa shows their hand by the types of questions and answers they included in their FAQ.”

It only gets more complicated from here. “When it comes to Android and iOS POS systems or any POS application which is designed to run on a handheld consumer device, there is a another can of worms we can open surrounding PA-DSS and QIR. But that’s for another time.”

Dustin can be contacted in response to this article by phone at 858-200-9634 or by email at I have found Dustin to possess unquestionable knowledge of this critical issue. A previous post of his on the same topic can be found here.

Dear Restaurants/Retailers, Nobody Wants Your App, and Why That’s Good

14 Jul

Monkey See, Monkey Do is an idiomatic expression popularized in the 1920′s, thought to have originated in Mali, West Africa. In less colloquial terms, it refers to people that follow the actions of another, even if they have no idea why they’re doing it.

Much merger and acquisition (M&A) activity can be explained by the Monkey See, Monkey Do phenomena: a competitor made a move, so we must do something too. After all, what if they know something we don’t? This conversation takes place in board rooms much more frequently than an outsider could ever imagine. Bankers get paid on the deal, not the outcome, so of course the money folks are going to prey on a CEO’s insecurities. It should come as no surprise then that at least 70% of M&A fails.

Retailers and restaurants are likewise not immune to Monkey See, Monkey Do. Retailers and restaurants saw airlines, hotels and grocers developing apps and thought they needed an app too. I cringe at thinking how many billions of dollars merchants paid to have their own apps developed.

Unlike consolidated industries, there are hundreds of thousands (600,000, to be exact) of restaurants in the US. I mention this to put the below in perspective: every time I fly, a US airline has a 20% chance I will book with them. If you’re a grocery brand, there’s a 50% chance to be graced with my patronage based upon my local geography. Given this frequency, an app makes sense to manage my flight status or loyalty points. But I’ve eaten at hundreds of local restaurants, and maybe only five of them more than once. And there are thousands of others in Houston. I’ve never downloaded a restaurant app because my behavior, based on inherent market fragmentation, just doesn’t justify it…

If we follow the teachings of Takichi Toyoda, we’d learn about the Five Why method: ask why five times and you will arrive at an actionable solution. If you practiced Mr. Toyoda’s method with a merchant bent on app-domination, I’d be impressed if you heard a cohesive answer on even the first why. Yes, a merchant might regurgitate buzzwords like “data”, “loyalty”, or “convenience”, but no cohesion ever came from a Jackson Pollock either. Merchants simply don’t know why they have an app, except everyone else has one too. Monkey See, Monkey Do

But having a stand-alone app will to be detrimental to merchants going forward. 

Let’s examine online (mobile) ordering for a second. The value of online ordering is less about the device but more about the convenience. Can I order something on my phone, watch, connected car, VR contact lens (whatever’s next?) in a fraction of the time I would spend driving to the location, finding the item, queuing at the register, paying, and driving back? Whatever becomes most convenient with current technology – with price obviously under consideration – is what consumers will want. To stay on top of technology changes will merchants spend ever-more resources developing apps for all these different platforms?

The true convenience of online ordering does not require you to download a merchant’s specific, and thus definitionally, limited application. In fact it’s the opposite: cull the largest list of possible options via one data layer to drastically improve convenience. Today this has manifested as YelpFoursquareGoogleOpentable and other local discovery platforms that let you sort across a number of filters to find what suits your needs. As much as merchants don’t want to believe it, the market is saturated, and products/services are very much fungible. If you’re not on Yelp, you don’t exist, and a prospective customer can easily find a substitute.

As is becoming clearer, the future will be even less about apps and more about bots. A bot, in it’s simplest explanation, is but an artificial intelligence (AI), natural language processing (NLP) layer on top of data that prevents the user from the first-world “problem” of opening, loading and interacting with a specific app. With better speech recognition and access to relevant data, Apple’s SiriMicrosoft’s Cortana and Google’s Now will render any and all other bots redundant and inferior. Are we to believe restaurants and retailers – who haven’t figured out the value of data science to manage the basics of their inventory and labor – are suddenly going to build bots with advanced NLP libraries and compete with Google?

The answer to all these questions comes to one, natural conclusion: Cloud POS. Smart POS companies will become the aggregate portal for all brick and mortar merchant needs. They’ll already be collecting the data necessary via Cloud to empower bots and useful extensions for their merchants. Through the value of middle market players and data aggregators – not unlike data co-ops in grocery and retail – POS companies will be able to connect merchants with all of the third party, demand-generating platforms to help merchants grow.

How does this benefit merchants?

1. Merchants won’t need to waste money developing apps/bots for perpetually-changing technology. The market will come to POS partner networks to onboard merchant data. Now, with merchant permission, consumers can order from businesses via a bevy of consumer platforms without the merchant worrying about it.

2. Merchants will access more data than their own loyalty efforts could ever imagine. Because POS partner networks will represent more locations than any merchant’s four walls (or any single POS company’s install base for that matter), the data being collected will paint a massively better picture of customer behavior. As payments and POS naturally merge, a stand-alone merchant app will be woefully behind.

3. Merchants will see increased customer revenues without increased marketing spend. Third parties will work with POS partner networks to invent new ways to generate eyeballs, and thus customers for the merchant. Who knows what sorts of future commerce this entails, but startups are much, much more creative than you might think.

Naturally, there will still be large, laggardly merchants that insist on maintaining their own apps and mismanaging investor dollars. But as data becomes democratized, small merchants will outcompete those who don’t have access to the data platforms being created.

That, of course, will eventually engender boardroom discussions of a new Monkey See, Monkey Do at the larger merchants – even if nobody in the meeting knows why they’re discussing the change.

Legacy POS Is Dead – It Just Doesn’t Know It Yet

12 Jul

You ever see those horror movies where a victim gets decapitated but still bobs from wall to wall like a gory game of Pong? Well the killer has already sliced the head off of legacy POS but the victim hasn’t quite realized it’s done for.

I’ll sum it up with a paraphrased but true story from a year ago.

A muli-hundred-unit restaurant chain asked it’s current POS provider (NCR) to access their data in a more useful and dynamic way. NCR would love to oblige, but for $50 per month per store. The restaurant concluded they could buy an entirely new POS system that would provide said data outputs for free, and summarily switched POS providers. “But we have a bazillion features!” NCR explained. “Who cares,” the merchant replied, “you don’t have the features that matter now.”

The end.

While POS companies love to evangelize their development prowess by counting features, as if the number of features is directionally proportional to the number of merchants queueing in line to buy your POS, this is going away. Hell, if a POS boasts 4,000 features, only 100 of them are actually ever used anyhow. Maybe one or two merchants want some obscure feature, and if you want to be in the POS business by building a custom product every time, good luck to you. But with all the hoopla about POS features being important it ends up being a pretty moot point in the scheme of things.

Indeed, you’ll start to see a winnowing of features as open POS platforms rely on other, third party providers to augment their POS offering, thus making the entire solution theoretically more complete. Clover, from First Data, has operated on this model for the past few years.

Now this isn’t without its caveats. Clover, for instance, lacks perhaps the basic 50 features needed to be relevant with restaurants/retailers that do more than $500k in annual revenue. And their app store (where I’ve publicly stated I’m no fan) is more window dressing than utility: it is a toolbox a payments provider, unfamiliar with selling POS, can point to and claim, “Yea, this app store has your solution for X.” Naturally, after a few weeks the merchant figures out they were sold a bill of goods.

But the ethos is what’s important here: Clover realized they could focus on a smaller nut and leave some of the more complicated development efforts to third parties who could build more complete features than Clover. Remember, POS is not some highly-profitable business with gratuitous funds for feature development. By letting someone else worry about building best-of-breed for X, POS companies can focus on the core product, merchant acquisition and support.

In fact, POS is going to follow the trails blazed by personal computers and mobile phones right into commoditization.

When you decide to buy a mobile phone, how do you decide what to buy? Are you buying an Apple phone because its camera is 0.5 megapixels higher than a Windows phone? Is it because the Windows phone lacks calling, email and text?


Both devices are effectively the same, especially for the features that derive 99.5% of their value. The difference is the ecosystem and value that ecosystem provides the consumer. It’s the “features” that ecosystem is augmenting to that core product that make it so valuable. Apple doesn’t need to provide the best on-demand delivery service, it just needs to connect you to it. But Uber won’t bother making apps for phones that aren’t open, or show little willingness to cooperate.

Several “legacy” POS companies have started investing in the future of their business by making Cloud (the data connectivity functionality) their default solution and their most important feature. As discussed previously, Cloud is the THE commercial future of the POS industry, and if any feature is evangelized it should be this one. Here are some restaurant POS companies that deserve further notice.

Michael Paycher co-founded SoftTouch POS in 2000. By 2009, Mike realized he needed to develop cloud architecture. “If you want to deliver any multi-store product – loyalty, reporting, you name it – with a great experience you need cloud architecture. Building at the store-level limits functionality and hobbles your product.” Mike says. “Today,” Mike continues, “every operator we onboard is on our cloud system by default. This immediately increases my, and by extension my channel’s, ability to offer superior products that make our merchants more successful.” He further quips, “It doesn’t hurt that the future of our industry requires us to have data, either.”

Focus POS‘ COO, Mike Hamm, also shares the same vision. “Instead of going straight to cloud, where you lose the redundancy and stability of the local server,” he explains, “we’re taking Focus to cloud replication. The data still resides locally, which is what larger customers need, but we provide the opportunities Cloud POS does by copying local data to Azure in real-time. It’s the best of both worlds,” Mike attests. When asked how clients could access his new build-out, Mike said, “The cloud data replication is included in our SaaS pricing going-forward. For those customers who want to own their POS outright, we’re still figuring out how to best deliver the value of our Cloud replication.”

“Make no mistake about it,” Mike continues, “we’re going where the market is going. People want to order from Uber and we want to ensure we provide our restaurants that seamless flexibility through Cloud architecture.”

Lucky Thalas, EVP at SilverWare POS, is following suit. “We’ve found a great balance between traditional ‘client-server’ POS and ‘cloud’. The data resides at store-level but we communicate between the cloud and the store.” Lucky is taking it a step further. “All net new SaaS deployments of SilverWare POS include cloud real-time synchronization for reporting, alerts and analytics. The cloud also serves as a default backup.”  Silverware customers who prefer to purchase the system outright also have the option to add cloud functionality at a nominal fee for their benefit.

“Still”, he adds, “we recognized the need to make our POS ready for the next evolution, including integration to third party services and complimentary products that are hard to deliver without cloud data availability.”

The future of POS will be a commoditized product, just like your phone or computer is today. Ironically, as payments companies feel commoditization’s downward pressure on their own margins, they’ve dipped into POS to bolster revenues and decrease churn. Now they’re discovering that POS is becoming just as commoditized as the commoditized business they attempted to diversify.

At the end of it all, POS’ value will come from what it can connect you to, and how those connections can grow your business. POS companies that survive the next evolution will earn more money than they ever have before while doing less work by letting third parties augment their features – let not your heart be troubled. But the legacy POS companies that haven’t figured this out yet? They’ve been dead for a long time.

Why POS and Payments Companies Have Trouble Thinking Ahead

12 Jul

When we think of large companies struggling with innovation, we often ask ourselves how it happens. They have so much money, so many resources, a dominant market position, and yet they lose the war to a startup nobody even took seriously. WTF?

In defense of large industry incumbents that serve brick and mortar, I have a theory for why it doesn’t just happen, but rather why it’s commonplace.

Brick and mortar is a special market segment. Sales cycles are forever long. Contract values are tiny. And because there’s no market leader or 80/20 anywhere, it takes massive scale to make a dent in the market.

The solution for payments companies (merchant acquirers) and POS companies alike has been to create reseller networks. The reseller operates somewhat under the corporate banner but is ultimately its own entity. Translation: pushing initiatives through a channel can be like pushing a string and hoping it miraculously finds its way through the eye of a needle.

Further, merchant churn is crazy high in brick and mortar. Reported failure for restaurants is as high as 60% in the first year, with a full 80% dissolving after five.Statistic Brain says that only 47% of retail establishments make it to the five year mark. And these are businesses that will be lost even if they like your product – we haven’t yet considered the number of businesses that will boot you out in favor of a competitor! In aggregate it’s very high churn indeed…

The understanding becomes profound when you combine the above two brick and mortar phenomena with the desire to meet quarterly goals. Think about the number of merchants dumping your service and how hard it is to find a channel partner that can reclaim business someplace else. It’s more than a full time job just trying to keep the boat afloat, never mind beating quarterly expectations.

While Google is working on self-driving cars, POS and payments companies are just trying to acquire enough merchants before the end of the month. These companies are not money-printing enterprises; there isn’t a gluttonous amount of money for R&D like there is over at Facebook. So initiatives inherently take more time in brick and mortar.

Though none of this should be an excuse for not doing the right thing, or sprinting when it’s opportune. If you spend your life torpidly scouring the pavement for pennies, you’ll miss the benefactor across the street handing out dollars. It does pay to know when to look up and run.

38 years later and grocery makes restaurant/retail look stupid again

12 Jul

Fool me once, shame on you. Fool me twice, shame on me. Or maybe it’s those who do not study history are doomed to make the same mistakes. Regardless, it’s embarrassing.

Despite the fact that grocery is 10 thousand times more consolidated than restaurant and retail verticals (literally not kidding), you still see substantial cooperation. Nielsen andIRI collect scan data from multiple grocers. Catalina Marketing and Dunnhumby power marketing and consumer trending across grocers as well. While grocers are competitors, it’s the classic rising tide lifts all boats.

Most recently the same aggregation is happening in the burgeoning space of online grocery shopping. It’s even more intriguing when you acknowledge that online grocery services have both item level (SKU) and customer (PII) data. Historically-speaking, tying these two data sets together has been very difficult and it explains grocery’s emphasis on loyalty programs since the 80′s. Maybe this now changes.

HookLogic, a more actionable advertising platform for brands, has put together a deal to become an advertisement portal for online grocers. Fresh Direct, which has raised $91M, Instacart, which has raised $275M, and, a public company acquired by Walgreen’s in 2011, have all agreed that Hooklogic could drive revenues while providing consumers better options. Remember, a large percentage of a grocer’s meager profits are but supplier marketing dollars, and online grocers should be no exception.

We’re witnessing the next wave of technology companies taking advantage of the data ecosystem benefitting grocers since 1978. As online ordering companies come to represent more grocery volume, they bring more useful data. And despite each of these online grocers being billion-dollar entities on their own, they were smart enough to realize that combining data would produce outsized results while simultaneously establishing a competitive barrier to non-participants.

Of course, you have to wonder what this means for restaurant and retail verticals. Retailers and restauranteurs missed the first wave even though it happened 38 years ago(do the math). Now that online ordering and delivery companies are growing quickly, will they reap the rewards from decades of merchant inaction? Morgan Stanley analysts expect online ordering to grow to a $210B business, and at that scale one would think technology companies have enough data to capture all the value.

It’s hard to say authoritatively.

But what I do know is if $250B grocers like Walmart find value in pooling data, restauranteurs and retailers who are exponentially smaller should catch on. And if billion-dollar grocery ecommerce companies like Instacart make moves toward the same future, their POS counterparts – who will represent the fragmented universe of restaurants and retail in the transition to the online world via Cloud – should follow suit.

That none of these opportunities has so much as budged for nearly 40 years is very telling of the leadership in restaurant and retail. With further fecklessness, it’s possible online ordering and delivery companies come to monopolize that value while operators remain in the 1800′s. How does it go again, ignorance is bliss?