July 09, 2009

Interview: Forbes talks to Bill Nuti

Interview by Forbes of Bill Nuti of NCR and how he is changing the way it operates.

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Face To Face
NCR: How To Innovate Past Age 125
Andy Greenberg, 07.08.09, 06:00 PM EDT
Chief Executive Bill Nuti describes how to juice up a classic culture.

William (Bill) Nuti joined NCR in 2005 as chairman and chief executive of the company that was founded as National Cash Register in 1884 and went public in 1926. For decades, NCR has derived a significant share of its revenue from the sale and service of ATMs--hardly a rapidly changing industry. But Nuti is taking the company in innovative new directions, toward self-service DVD kiosk rentals and even streaming video.

Forbes: You recently acquired the DVD kiosk company, TNR Holdings, and you're planning to use it to host Blockbuster's DVD kiosk rental system. I'm hoping you can tell me the thinking behind that your strategic move.

Bill Nuti: Our aspiration is to be the world-wide leader in self-service solutions, self-service channels--be they mobile channels, online channels or these point-of-service channels. Point-of-service channels could be an ATM, like we have in our financial services business, a point-of-sale device, like a self-checkout device, or a cash register in the retail business. In the entertainment business, that's, in essence, what these are. These are self-service kiosks that are multi-channel enabled--so very much in line with our corporate vision and our strategy. We're excited about it, because digital media distribution over the last several years has proven to be a really significant growth market for companies. We want to lead this space, globally.

There's no doubt that a kiosk is a more convenient, and probably a much cheaper way to rent movies than a big brick and mortar store. But there's still this future disruption that's coming from online video, from on demand, downloads and streaming. So, how are you preparing for that second disruption that we can see on the horizon?

Think about it this way. The combined market for rental, sell-through, on demand and online was about $23.5 billion in '08, growing to $25-plus billion in '11; $1.5 billion in '08 was on demand and online.

About $3.5 billion will be on demand and online in 2011. The rest is pretty much sell-through and also rental. Rental is about $8 billion of those two numbers, and flat in that time horizon. So, the DVD per se, the physical media isn't going away yet

We're making this move so we can position the company to also participate in this growing and burgeoning environment that's been difficult for companies to have success with over the last few years--in digital media download, both to the home, as well as to these kiosks and through mobile channels. We plan on participating in those segments, as these markets continue to emerge and mature.

View the full NCR chart at Wikinvest
How is NCR getting into that next wave of purely digital media? In some ways, you seem now like a kiosk company. You do have a lot of physical devices that you sell. So tell me a little bit about what NCR is doing to prepare for that second wave of purely digital stuff.

Within a year from now, you'll be able to go up to one of these kiosks with a thumb drive, plug it in and be able to download movies or video content to them. We also signed up with Toshiba, and made an investment in a company by the name of Mod Systems, who in essence builds server farms for video. Not just video and not just movies, but everything around digital media: books, games, movies, art, all sorts of content that can be downloaded to a device, such as our kiosk in the future or to your home.

Really what we're about is portable media. We're working with Toshiba, we're about bringing portable media to the world, in terms of these NAND-flash or what we commonly refer to as Micro SD Cards. These cards, these devices, will be used to download content. You can plug them into your television, your PC. You can plug them into your PDA, into so many different devices. So, making digital media portable is part of our vision as well.

ATMs are still a really large part of NCR's business--you supply a third of the ATMs in the world. Yet ATMs haven't changed much for a lot of years now. They're a very mature technology. How do you keep innovating in a market for something like ATMs?

ATMs have [been], and will continue to be, a major part of NCR. They are our life blood. It's what is in our core as a company. We know how to do it better than anyone. And we're the world-wide leader--in terms of market share--for ATMs. ATMs will continue to evolve, and we will innovate in ATMs. Today, intelligent deposit is being rolled out in New York in a very rapid way and around the U.S. in a very rapid way. The notion is that an individual can go up to an ATM with a check and slide the check into a slot where it will be imaged and base deposited so that it's immediately posted to your account. You'll see a lot of these ATMs in use today in New York. That's a new innovation.

You're also going to see contact lists come into play: Contact lists, credit cards, contact-list phones, mobile devices; being able to start to kick-off, or start to engage an ATM transaction.

You'll also see money downloaded. Much like you get gas from a gas station, you'll be able to recharge your phone with cash in the future from an ATM. So, the future of the ATM, in terms of future innovations, is alive and well. We'll continue to lead there.

We have also made investments in a variety of companies and organically at NCR, to lead in some of these areas. We're the world-wide leader in intelligent deposit. Today, we're working with a number of companies to lead, in terms of contact lists and mobile devices interfacing with ATM's.

Rest of interview

Posted by staff at July 9, 2009 09:32 AM