Aug 30, 2004 (01:08 PM EDT)
Retailers Are Cool To Linux

Read the Original Article at InformationWeek

The retail industry has failed to embrace Linux as warmly as expected, a market research firm said Monday.

A survey of retail information technology executives has found that Linux is in just about 2 percent of point-of-sale systems, which is far less than the 5 percent to 8 percent range expected, Venture Development Corp. said.

"You hear a lot of hype and a lot of talk about Linux, but as far as the numbers go, we haven't seen them," VDC analyst Taylor Smith said.

Among operating systems found in POS equipment, open-source Linux was at the bottom of the list. Windows was king with 43 percent of the systems, followed by 19 percent for various proprietary or in-house customized systems, 17 percent for IBM, primarily its AS/400 systems; and 9 percent for various Unix versions. Ten percent of the IT execs didn't answer the survey.

Windows remains dominant because more POS applications, such as inventory updating and pricing, labor management and scheduling and security, are written for Microsoft Corp.'s operating system, Smith said. The same is true for complementary hardware such as credit-card readers. IBM's systems also have strong support from independent software vendors.

In addition, running Linux often requires a retailer to have an in-house staff for support and maintenance.

To overcome their underdog status, Linux proponents need better marketing to convince retailers that the open-source system will cost less to maintain and support, and will deliver a higher return on investment, Smith said.

"People don't change systems in the business world if they work," Smith said. "(Businesses) are going to have to get something more out of the new system."

VDC has scaled back its projections for Linux in POS systems to 5 percent to 8 percent in three to five years, Smith said.

VDC's report on the retail POS market also found that bar-code use is far from dead, despite all the industry chatter about the switch to electronic tags. While radio-frequency identification (RFID) technology is being adopted in warehouses serving retailers, it's still a couple of decades away from being used to track goods on store shelves.

"We don't see any item-level identification right now in RFID," Smith said.

Bar-code use is expected to continue growing in the mid- to high-single digits as its use spreads from retail to other industries, such as healthcare, small consumer-goods companies and financial institutions. Bar-code technology, in fact, is still evolving, with a major effort in North America underway to move the system from 12 digits to 13 digits. The Uniform Code Council controls the Universal Product Code found on most retail products today.