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Guess Who's Taking Your Money? Linux Cash Registers Go Mainstream

By Dan Orzech

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A few years ago, Mike Prince was a lonely man. In 1999, the forward-looking CIO of Burlington Coat Factory became the first retail industry IT executive to adopt Linux in a big way, as he began moving the company's gift registry, receiving department and other systems onto the open source operating system. And despite the fact that when Prince looked over his shoulder, there were only a handful of other retailers following in his footsteps, the Burlington, New Jersey-based clothing retailer soon began shifting its cash registers to Linux as well, a move the company expects to finish by next year.

These days, however, Prince is looking positively mainstream. The nation's largest movie theater chain, Knoxville, Tenn.-based Regal Entertainment Group, revealed this week that it is using 2,400 Linux-based cash registers from IBM at the concession stands in its 548 theaters. Sherwin Williams, the Cleveland, Ohio-based paint company, and McDonald's subsidiary Papa John's Pizza are also shifting their cash registers to Linux. A number of smaller retailers, including The Body Shop stores in Canada, Donatos Pizza, a 150-restaurant chain based in Columbus, Ohio, and Breeze/Max, a chain of 50 ski rental shops in Western ski resorts, are already using Linux point-of-sale systems.

And interest in Linux-based point-of-sale systems appears to be growing rapidly. Last year, only 2% of cash registers sold ran Linux, according to Greg Buzek, an analyst at IHL Consulting Group, which studies the retail industry. Far more registers ran various Microsoft operating systems, or IBM's older, specialized 4690 point-of-sale operating system.

As recently as last year, says John Gray, an executive at retail software maker Retek, Linux was not a major contender for point-of-sale applications. Now, he says, "people are looking at it seriously. A lot of people we talk to think it's a viable option."

Gray is in charge of development of the company's Java-based Retek Point of Service, or RPOS, product. About half the retailers he talks to want to see the product demonstrated on Linux, he says.

Computing appliance maker Neoware Systems, of King of Prussia, Penn., is seeing similar interest in Linux among retailers. Neoware introduced a Java and Linux point-of-sale system in 2000; now well over a third of the company's sales to retailers are on Linux, says Neoware president and CEO Michael Kantrowitz.

Linux is a "natural" for retailers, according to Kantrowitz. "They like the fact that they have access to the source code, so they can make modifications if they want," he says. "And for a retailer with thousands of locations, Linux is great technology, because it's very stable."

No Guaranteed Sale
Even for retailers who have been seriously considering adopting Linux, however, the open source operating system is not always a guaranteed sale.

Minnetonka, Minn.-based Musicland Stores, which owns music retailer Sam Goody and other chains, had begun piloting Linux point-of-sales systems when it was acquired by Best Buy -- a Microsoft shop -- and switched to Windows NT. And Home Depot, which set out two years ago to deploy tens of thousands of Linux-based thin terminals in its stores, ran into problems with getting the right Linux device drivers and has been rethinking its plans, according to industry sources.

While not exactly the sexiest area of technology, device drivers are essential to making a point- of-sale system work. That's because today's cash registers are not just cash drawers, but typically include a host of other devices such as bar-code scanners, touch screens, credit-card readers and keypads for typing in personal identification numbers. Each one of these requires a device driver. While more and more Linux drivers are becoming available, says Neoware's Kantrowitz, Microsoft Windows still holds an advantage in this area.

Another hurdle to Linux adoption is simply the slow pace of technology change in the retail industry. More than a tenth of the cash registers shipped last year, for example, ran Microsoft's aging DOS operating system, according to IHL.

The check-out counter isn't the only place Linux is showing up in the retail world. Fashion retailer Tommy Hilfiger, for example, is building a new e-business system on top of Linux, while office supply giant OfficeMax recently rolled out in-store kiosks based on Neoware's Linux thin clients.

As retailers become more comfortable with the open source operating system for other uses, the number of Linux cash registers is likely to grow. Last year, Boscov's Department Stores, headquartered in Reading, Penn., moved its invoice processing onto an IBM mainframe running Linux. Now the company says that starting next year, it too is planning on rolling out Linux cash registers.