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The U.S. Postal Service Wednesday awarded ATM manufacturer Diebold Inc. a
contract to upgrade security at hundreds of U.S. Postal Service sites nationwide.
The agreement, which could extend 12 years, bolsters North Canton, Ohio-based
Diebold's valued-added services business, in which financial institutions outsourcemanagement of their ATM networks to Diebold.
The manufacturer is emphasizing valued- added services to distinguish itself
from competitors NCR Corp. and Wincor Nixdorf AG, Thomas W. Swidarski, Diebold
president and CEO, told analysts during an investment community conference Web
seminar.
"Our competitors are emphasizing products," Swidarski said. "We are emphasizing
valued-added services." In 2007, Diebold's services business accounted for
52% of the company's $3 billion in annual revenues compared with 48% for ATM
manufacturing. According to the Postal Service contract, Diebold would upgrade
the security at the postal service sites with the Internet Protocol version 6 designed to
replace Internet Protocol version 4. Diebold will install Internet Protocol version
6-complaint cameras, encoders, software and networking equipment, as well as
provide education and training along with maintenance and support services at some
Postal Service sites, the company said in a news release. Diebold also will build a new
security system on open architecture to allow for future expansion. The Washington, D.C.-based Postal Service relies on video security to combat robberies, burglaries
and other security breaches. The postal service prefers Internet Protocol
because employees can view any location that has an Internet connection.
Swidarski disclosed the postal service contract during the Web seminar with
some of the company's most-senior executives. Leading off the presentation, Swidarski says value-added services cross into the area of Diebold managing banks' ATM networks as they outsource that part of their business to focus on core operations. He said this is a trend in the United States and other parts of
the world.
Charles E. Ducey Jr., senior vice president of global development and services, who
joined Swidarski on the Web seminar, gave as an example of mobile banking, which many banks are adopting to cater to Gen X'ers and Gen Y'ers. "We could build banks a mobile banking system and manage it for them," Ducey says.
Diebold's laboratory for providing valueadded outsourcing services evolved in Brazil,
and the company is exporting the Brazilian model worldwide, Swidarski says. Diebold is managing 15,000 ATMs for Brazilian banks, and 100 U.S. banks have outsourced their ATM management to Diebold, he adds.
"This [valued-added outsourcing services] will lead the company into the
future," Swidarski says.
In a related matter, Ducey said U.S. ATM sales will grow 6% to 8% in the next three to five years, and the key driver is deposit automation. "Banks piloted deposit automation from 2005 to 2007, but many national banks now have rolled out deposit
automation," says Ducey, adding that Diebold has contracts with three national
banks to provide ATMs equipped with deposit automation.
Diebold is the world's third-largest shipper of ATMs behind Wincor Nixdorf AG,
which is second, and NCR, which is the world's largest shipper.
