Software business a key driver of future growth
Eckard Heidloff, CEO and president of Wincor Nixdorf, discusses the enormous growth potential of Asia Pacific’s emerging markets and the company’s bid to increase its presence in the region.
Wincor Nixdorf expects significant growth in the emerging markets of Asia Pacific and has charted an ambitious growth Strategy for the region. The urbanisation of major Asian countries, such as China, India and Indonesia, is fuelling increasing consumer demand for greater access to cash and alternative forms of payments - both cash and cashless.
The German ATM manufacturer expects the global middle class to double to 4.2 billion people in the next 15 years, with most hailing from emerging countries. By 2018, Wincor Nixdorf’s expects 75% of its worldwide banking business to come from these markets.
Today, emerging markets play a significant role in the company’s sales figures, with a market share of well over 30%. Indeed, Wincor Nixdorf is strengthening its footprint in the region to capture the anticipated growth. It has only just completed a product portfolio readjustment to better meet customer requirements in the region, and is restructuring its global research and development and supply chain network, to offer more value-added services.
“Having completed our restructuring last year, we consider ourselves well placed to sustain the considerable level of growth generated in emerging markets,” commented Wincor Nixdorf CEO and president, Eckard Heidloff. Heidloff recognises the diversity of the Asia Pacific region and does not believe in a one-size-fits-all strategy.
“We have a global strategy and a worldwide product portfolio that is focused on delivering the right product to the right market and that involves listening to our customers. The markets in Asia are very different; India is different from China and Malaysia has needs that are different from Australia. We have dedicated product teams in each country that are working with clients in the local markets to understand their needs,” Heidloff explained.
“There is a need for basic machines and services to serve rural and more remote locations that at the same time must be well supported and has a high level of availability, and yet offers a simple and easy-to-operate system.” Heidloff enthused, when quizzed on the needs of the company’s customers in Asia Pacific.
It is in this area of providing services that ensures availability and ease-of-use, in terms of operational efficiency, as well as total cost of ownership that Wincor Nixdorf is focused on growing its software and managed services business.
The company’s global services portfolio and the corresponding increase in customer demands is another key growth lever of its business. Wincor Nixdorf is looking to double its software and professional services revenue from more than $300 million to $600 million within the next five years.
Heidloff believes that the software business will be a further key driver of growth as it enables banks to adapt to changing customer demands and transform the branch environment. With the software market remaining fragmented, Heidloff expects major consolidation to take place over the cource of the next few years.
In view of this, Wincor Nixdorf recently strengthened its software portfolio through the acquisition of DATEC Retail Systems, a software firm specialising in data integration and omni-channel management processes. The company also set up an independent software headquarters in Utrecht, Netherlands recently. Around 1,500 of the approximately 9,000 employees in the company work in software and professional services, and around 30% of the company’s investments for research and development (R&D) is spent on software development.
With the increasing usage of mobile devices, even as traditional cash based services continue to grow, the company is designed a strategy that focuses on retail payment options - both cash and cashless. “We face a demanding market that likes technology and adopts it very quickly, and that is why we invest heavily in R&D,” Heidloff quipped.
Keywords: Wincor Nixdorf, Eckard Heidloff, DATEC Retail Systems