NCR taps into Microsoft’s cloud to bring speed to the internet of things

Connected devices have become a popular way for retailers to mitigate human contact, turning forward-looking projects into near-term necessities. To keep this transition on track, NCR is using Microsoft's cloud.

NCR has placed its internet of things (IoT) software on top of Microsoft’s Azure AI technology, hoping the combination will improve uptime for retail, restaurant and financial users that employ connected devices to accept payments, robot process automation or analytics.

The IoT services market dipped initially as the coronavirus crisis hit earlier this year, but is expected to grow quickly as corporate and retail strategies adjust to a long-term mix of remote and office work; and e-commerce and digital payment adjustments that will outlast the pandemic. While the global IoT services market will decline from $144 billion in 2019 to $139 billion in 2020, according to Report Linker’s aggregation of IoT research, the market will quickly jump to $260 billion in 2023, a compound annual growth rate of 23%.

“The main challenge for retailers with IoT is to turn data into valuable insights,” said David Wilkinson, president and general manager of NCR Retail. “To do that, the data needs to be available across locations and the whole enterprise. Furthermore, they need to understand what the data actually tells them. That requires a lot of expertise and takes time to develop.”

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When the coronavirus first hit in China, merchants found IoT checkout reduced crowds and contact with store staff; and also improved inventory management through analyzing transaction trends.

As self-service and checkout-free retail expands, and stores change designs to adjust to a reduction in traditional brick and mortar shopping, there’s some IT catchup work to do. Writing for PaymentsSource, Nets’ product manager Rune Sorensen said technological change is happening faster than internal systems can keep up with. That gives an opening to cloud hosting, which can update payment gateways faster as well as ensure uptime and the capacity to manage the data that comes out of web shopping and checkout-free payments that happen in stores.
NCR’s Digital Connected Services manages point of sale devices and ATMs. Azure is designed to use machine learning to produce faster analysis of contactless payment trends, as well anticipate issues with store devices before a glitch or capacity issue impacts store operations.

Merchants over the past few years have turned to IoT to add payment options for different devices, such as wearables. There are other business operations that can also benefit, Wilkinson said. Robots that automatically clean floors and track shelf inventory, and contextual in-store and cross channel marketing can also benefit from remote connectivity.

“When we identify potential problems our merchants want us to be able to access the incident and determine if a remote solution is viable and if possible fix it automatically,” Wilkinson said.

Retailers have accelerated their move to IoT technology during the pandemic. Amazon has placed checkout-free technology inside shopping carts while looking for larger locations for its Amazon Go checkout-free store. Other companies building systems that use sensors and other remote checkout that links to consumers’ e-commerce sites have also tried to scale their models while traditional stores have either been locked down or are looking to change how they manage the consumer experience.

The impact has been more of an accelerant than spurring new innovation, according to Wilkinson.

“The IoT use cases themselves haven’t changed but we see a lot more urgency now,” Wilkinson said. “The benefits of increased uptime without on-site service calls have never resonated more.”

Microsoft did not make an executive available for an interview. NCR rival Diebold Nixdorf also offers a mix of remote retail technology that combines digital payments with contextual commerce, contactless payments and business services such as inventory management. Ingenico has a cloud service that provides onboarding, checkout and analysis.

These firms were already in the midst of a long-term digital strategy as merchants migrated away from traditional static point of sale terminals. The pandemic has made these transformations more crucial as firms such as Stripe and Square chase merchants with a similar mix of API-driven remote payments and merchant services.

IoT can refer to any type of internet-connected device, including ATMs, traditional POS systems, kiosks, self-checkout lanes, mobile phones, etc., said Rick Oglesby, president of AZ Payments Group. “The trends have been established for years with more devices, more payments through mobile devices, more through unattended devices such as kiosks and self-checkout lanes, and more business conducted over personal devices and online.”

The pandemic has accelerated these trends as customers have become far more sensitive about having to touch things in public places, less desirous of face-to-face customer service, and even being less apt to go out at all, Oglesby said. “So the trends in IoT and IoT payments are just more of the same, but it’s more of the same more quickly now.”