Less than two hours after I posted my last blog expressing concern about the health and well-being of the ATM industry, news hit that Diebold Nixdorf is looking for a buyer.
It seems like only yesterday that we were all talking about the Diebold acquisition of Wincor Nixdorf and their ascension to the number one position in global ATM market share.
The flurry of news items about the current situation at DN is focused on the financial issues the company is facing as they deal with acquisition-related obligations to a group of remaining Wincor Nixdorf shareholders. And while these issues are real — like the DN stock chart — I think there is more to it than that.
This may be a situation where the combined Diebold Wincor organization wound up having too much of a good thing. Specifically, too much hardware, too much software (remember that Diebold had previously acquired Phoenix Interactive early in 2015) and too many smart people.
Initially, the Diebold Wincor marriage looked good on paper. Two strong industry players — Diebold with a significant presence the USA and WN with a dominant position in Europe — would combine to have a truly global footprint and become the #1 ATM vendor on the planet. Unfortunately, this is where “too much good stuff" happens. For instance:
You get the picture. Any acquisition or “merger of equals” this size takes a fair amount of time and effort to sort through. Even under the best of circumstances, some companies are unable to pull it off successfully. And, in this case, the marketplace did not cooperate. The ATM industry, in general, is struggling to deal with the combined effects of market saturation and competition, as well as widespread promotion and consumer adoption of mobile and alternative payments.
On top of all the internal issues that need to be addressed, DN is also facing some stiff external headwinds. The company does have some great products and people that I, personally, hope are able to weather the storm. Diebold has been around for more than 150 years and it would be nice to see them come out of this whole. (You may recall back in 2015 when the Diebold/Wincor deal was first announced, NCR was also facing similar issues and needed outside assistance to keep going. And, now, both companies are telling investors that the Windows 10 upgrades in 2019 are key to their salvation.)
At the same time, it is fun to speculate on the possible outcomes and their impact on the industry:
While we watch and wait to see what happens with DN, it seems clear to me that the entire ATM industry has reached an inflection point. As the business contracts and consolidates, none of the traditional vendors can continue on as they have in the past. ATM 3.0 is much more than simply allowing access to cash by using a mobile phone. ATM 3.0 will require the industry to move forward in these three key areas:
Remember, sometimes less is more.