Diebold Integrated Services Quest

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24 April 2009
Bob Meara
I was one of many attending Diebold's Integrated Services Day held on April 15 at its' headquarters in Canton, Ohio. After 150 years of business primarily as a hardware manufacturer, Diebold last week announced that its business model is shifting away from products toward integrated services. Over the next five years, Diebold will strive to have 75 percent of its business coming from the servicing side of the business, up from roughly 50% in the current year. While not entirely unique among ATM manufacturers, Celent finds this move significant on two levels. For Diebold, the move is a smart one, with hardware sales growth increasingly challenged across the globe. NCR and Wincor Nixdorf are seeing similar dynamics. The larger attraction lies in a new business model for ATM deploying financial institutions. In today’s capital starved environment, Diebold’s move replaces significant capital expenditures with more easily obtained ongoing operating funds. Its move comes when envelope free ATMs are being deployed by a growing number of banks. Deposit automation ATMs are becoming more attractive as banks truncate checks at points of first presentment across the enterprise. In that environment, traditional envelope deposit taking ATMs – particularly remote ones - incur disproportionate servicing costs. Diebold’s move strengthens its position versus independent service operators that have comparatively little experience with the new machines. Collectively, Diebold, NCR and Wincor Nixdorf are making it easier for financial institutions to replace aging "cash dispenser" ATMs with more capable self-service devices.

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