Mega-deal to put Israeli-made software on cash registers worldwide

Retalix was already the world’s leading point-of-sale software company. Now that it is joining forces with NCR, its systems will soon go worldwide

Illustrative: A young boy in the supermarket checkout line (photo credit: Nati Shohat/Flash90)
Illustrative: A young boy in the supermarket checkout line (photo credit: Nati Shohat/Flash90)

The past week has seen one of this year’s biggest buyouts of an Israeli company by a large multinational: NCR, which makes checkout systems for retail, automated teller machines, and cash dispensers and the like, bought Israel-based Retalix, a provider of retail software and services, in a deal valued at about $650 million.

Starting slowly in Israel, where its retail point-of-sale (POS) software manages cash registers in nearly every Israeli supermarket and fast-food outlet, Retalix has slowly expanded and exported its offerings. In 2011, Retalix was ranked among the top four software vendors for grocery retailers and among the top 10 large software vendors to retailers by retail industry publications.

When stores used regular cash registers, they were able to tally totals, make change, and keep track of the income and expenses. The revolution led by Retalix, more than any other company, enables retailers to use the information that comes out of a POS system in so many different ways. For example, retailers can use the information gathered at the POS with a wide range of business intelligence tools — which products are hot, who’s buying what at which times of day, what promotions are having the biggest sales effect.

By linking sales data to a credit or loyalty card, retailers can implement programs that reward shoppers for buying and keep them coming back. And the POS information on what products were sold makes it easier for retailers to keep track of inventory, payments, and expenses. And all of the data is stored securely in the cloud, enabling administrators or management at other outlets of the chain to easily access it for their needs. According to industry analysts, Retalix is a world leader in deploying these software solutions. And NCR, primarily a hardware company, will now be able to offer some of the most advanced POS systems in the world.

Somewhat more modest, but important nonetheless to the Israeli information technology community, was the weekend report that American storage technologies giant EMC was buying Bnei Brak’s More IT Resources Ltd. The official price has not been announced, but it is believed to be close to $20 million. However, the significance of the announcement lies just as much with the purchaser as with the purchased: More IT Resources, which develops software to monitor big-data performance by allowing managers to allocate computing resources for databases in a virtualized environment, will be EMC’s 11th Israeli purchase.

Earlier this year, the company bought storage systems company XtremIO for $430 million, and itself has spent close to $650 million on Israeli companies; this puts it in the same “big buyer” category as NCR. This is further testimony, said one Israeli analyst speaking to Bloomberg, of Israel’s innovative technology. “This is more evidence that Israeli technology is very interesting and contributes to big global companies,” said Saar Golan, head of equities at Clal Finance Batucha Brokerage Ltd. in Tel Aviv. “We expect to see more acquisitions.”

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