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Issue Date: Vol. 49, No.5, May 2009, Posted On: 5/15/2009

Vending Waits On Advance To Application-Based Technology

by Dave Levine
Dave Levine, MB Media Brokers, Cantaloupe Systems, Mandeep Arora, vending, vending business, vending route, vending machine, vending technology, coin-op, coin-operated

About a year ago I had a conversation with the CEO of Cantaloupe Systems, Mandeep Arora. We were talking about how technology has evolved. He told me something I will never forget -- that we were evolving from a world that revolved around machines to a world that revolves around applications, and the outcome will be a world that revolves around solutions. We were talking about vending machine signage at the time, but this analysis really applies to the entire industry. In fact, I would argue that the future of the vending industry probably would closely mirror that of the personal computer industry after the second half of 1970s.

Right now, we live in a world where computers are commonplace. That is not the way it used to be. When computers first came out, the people who adopted them replaced them quickly with newer computers which had more capabilities: faster processors, additional memory, better graphics, more and faster storage. The change was driven by increasing power in the machine.

At different points, new applications for computers would arise; early ones included WordPerfect, VisiCalc and (at last) the Excel spreadsheet. The term "killer application" was coined to describe a program so attractive that a person would go out and buy a computer just to run it. Before the advent of the killer app a quarter of a century ago, computers were not really necessary to the average person. However, programs like Excel were such powerful applications that they made PCs useful, and soon necessary, for a lot of people.

Fast-forward to the present, and the thing that you will notice most is that there is not a huge need to replace your computer with a newer, faster one. Mostly, this is because the power in the industry has moved past the computer and is now based on what users want their computers to do. Moreover, the most generally useful applications for computers have been discovered. This means that the only way that a technology company can truly differentiate itself from its competition is to offer an evolving solution to a particular problem -- to become a continually innovating solutions provider. That is why IBM had to change from being a hardware company to being a software and services supplier. It's why Microsoft feels threatened by Google, and why companies that are hardware-based are facing the reality that they need to become solutions developers or die. The hardware has become nothing more than the means to deliver the solution. Ultimately, it is secondary.

This is why I believe our industry is on the edge of a massive change. We are one of the only industries left that works mostly on that earlier "machine" level. Sure, we have management software and telemetry if we want it. We even have applications, but they are not in general use -- by general, I mean on 90% of machines (the standard definition of "full penetration"). I believe that the reason is that we have not discovered the "killer application" that will drive our industry forward. But I believe it is coming.

If telemetry were the killer application, it would be in 90% of machines right now. The same thing might be said of cashless payment capability. I am not seeing that. What I am seeing is that operators are struggling to justify the expense of these upgrades. So the killer app must be something else. I predict that a technology will emerge that really will move this industry to the next level, and the other technologies will piggyback on it.

If a person looked at the top 10 uses for personal computers, it would be very easy to see how they might be translated into the vending industry. Also, if you were to look at this list, it is at least possible that one or more of these uses for personal computers will be the killer application that drives the vending industry forward. Without further ado, here is a sample list of the applications installed by a random user I found on the Web:

1. Firefox -- a popular browser; the guy is on the Web;

2 Windows Mail -- the guy sends and receives email, and uses Microsoft's newest version of Windows;

3. Smart FTP -- a file transfer protocol app that makes it easy to transfer files between a local computer and a server on the Internet; the guy likes to send large files;

4. Skype, a "voice-over-Internet protocol" application -- the guy likes to talk on the phone using his computer;

5. Excel spreadsheet -- the guy likes to have productivity tools on his PC;

6. AceText -- a small memo pad and multiple-entry Windows clipboard expansion;

7. EditPad Pro -- a full-featured text editor;

8. Wamp -- an application for developing websites; this guy is a Web developer;

9. Paintshop -- the guy uses his PC to prepare graphic documents;

10. Microsoft Word -- the guy uses his PC to prepare and print documents.

By simply reading this list and thinking about it, it is very easy to reach the conclusion that vending machines in the future will do the following:

• Provide full Web access, not just for the operator, but for the customer.

• Possibly offer a way to interact with the customer's email -- perhaps a virtual Post Office box?

• Obviously, today's telemetry systems transfer data between the machine and the main server. But in the future, there will be more data and different uses for it.

• Perhaps we will allow our customers to make voice-over Internet calls using our connection.

• There may be Web applications that our customers can use for convenience, and to make them more productive. Mapquest on a vending machine would be nice, for example.

• You can't help thinking that the vending machine of the future will be able to display multicolored images, and probably print them. I am thinking downloadable full-color coupons tailored to the customer. You could print out full-color directions with coupons.

Obviously, I am just offering this as food for thought. However, I will tell you that there are a lot of people looking at our industry and patents are being filed around it at an amazing rate. At some point, there will be an application that literally forces our industry into the future because it will be too essential -- and too profitable -- to ignore. That is why, as operators, we need to think less about our machines and more about what we do with them, and the problems we solve for our customers as operators.

DAVID LEVINE is a former financial advisor and vending company owner. He now runs MB Media Brokers (Phoenix), which specializes in low-cost wireless retrofittable signage for vending machines. Founded in 2005, MB Media Brokers was born out of Levine's conclusion that the vending industry's potential is impaired by the current perception of vending. He believes that this problem can be addressed while providing additional revenue to operators. His solution is to use digital signage to convert the existing machine base into a massive network of digital billboards, capable of both broadcasting and advertising.

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