Former President Xenial, Global Payments Inc
Christopher was the creator of Twenty20 Visual Systems, the first-ever Microsoft Windows POS company, which was sold to Radiant Systems, now NCR. From there, he founded Xpient Solutions, a QSR and fast-casual POS which he served as CEO for over a decade. In 2014, Xpient was sold to Heartland which Global Payments then purchased in 2016. Christopher stayed with Global Payments to run Xenial, the cloud-based POS for QSR and fast-casual that competes with Brink.Read moreView Profile Page
Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.
Christopher, can we step back to the 90s and lay out the context of the point of sale market?
In the 90s, there were still many restaurants that had no POS, who still took orders on a duplicate pad, ripped off one copy and stuck it on a rail in the kitchen. That was pretty common. Of course, there aren't very many internal controls when you do that. It was relatively easy to help people understand what the benefits of adopting sales would be, and even for those with POS, the systems they typically had were not easy to use. There was a lot of having to memorize a four or five-digit PLU number and ring it up on a mechanical cash register. The advent of touch screens and the ability to deploy a graphical user interface made the users' training pretty trivial compared to where it was in 1990, 1991 when there was no GUI, and they were using some electromechanical cash register.
What system did the customer need then, in the 90s, when you were building Twenty/20 Visual Systems?
There were only a few kitchen systems back then. A printer in the kitchen, or more than one printer in the kitchen, and some number of PCs and, back then, CRT monitors. That’s all they needed. There weren't a lot of integrated inventory systems; there weren't integrated kitchen systems. If people were really at the forefront of technology, they might use Excel to do a labor schedule. It was definitely the olden days, if you will.
How did the XPIENT solution evolve on the original Twenty/20?
We sold Twenty/20 in 1997 to Radiant Systems, which is now NCR, and I found this little company in Charlotte, NC that had a DOS product and the beginnings of a Windows product and they were bankrupt. So I took it over and took it through Chapter 11 bankruptcy proceeding and then founded XPIENT on the other end of that reorganization. XPIENT was very narrowly focused on quick service and fast-casual and the enterprise segment of that market; less than 200 stores, and we were not actively going after that business. We had a few customers that had less than that, but that was by circumstance. It wasn't part of the business that we were looking for.
And Heartland then took over XPIENT?
Yes; I sold it to Heartland in October of 2014. We came out of bankruptcy in 2002 and so we had a run of about 12 years, sold it to Heartland and then stayed with Heartland and acquired several other restaurant technology companies. I kind of brought those together and ran that group. Then Heartland sold itself to Global Payments. I think that deal closed in March or April of 2016. I stayed with Global, running that group until the end of June 2019. I left about two years ago.
Does the Twenty/20 core of the product form the foundation of the NCR?
Actually, it doesn't. They bought a quick service solution. They bought a movie theater solution and a C-store solution in Twenty/20 and Radiant decided that they were going to rewrite all of those and have a common platform that would handle things like printing, payments, and so on; the activities that were common, irrespective of the line of business. It was a great idea, but it never worked, so they ended up not investing anything in Twenty/20 and having to buy Aloha about six or eight years after they bought us, to have a play in the table service business. It was a great shame; they kind of wasted their money.
Why didn't it work out?
They never ended up building their development platform of choice, for all of that was Delphi and Delphi became defunct fairly quickly. They made some fundamentally poor decisions, in my opinion. They were left without a product and decided that they would buy Aloha. They brought Aloha to market; I think they spent almost $50 million buying it. They had bought us for a lot less than that.
How would you describe the competitiveness of these products as they get consumed into bigger parent companies?
We decided that we would build a cloud replacement for all these legacy points of sale, and we did. We launched that product. It's called Xenial. It's platform-agnostic, runs on Windows, Android, iOS. The failure to go to the cloud is, ultimately, a detriment if you have a legacy product. Today I don't think there's an enterprise looking for a solution that isn't going to the cloud. Nobody's looking at legacy solutions today.
Do you not think that the bigger companies, the NCRs of the world, are not ready or equipped?
They haven’t invested in building a cloud solution to replace Aloha. They've invested in building solutions around the periphery. The configuration might be in the cloud and reporting might be in the cloud and the back office might be in the cloud, however, the product, the core transaction POS product, is still a client-server solution. You can see customers leaving Aloha in significant quantities because there is no cloud solution. If you look at that from the outside, it's hard to understand. That's true for many legacy players.
How difficult is it for them to build that core cloud transaction piece?
It's non-trivial in terms of time and money. It took us three years and a significant investment to build a product that would run a restaurant. I think the longer you leave it, the harder it is to break into that business. How are you going to displace Brink? I wouldn't say they have a stranglehold, but Brink, Xenial – my former business – and Micros, are the three enterprise players. Rebel would tell you that they're in the enterprise business, but I don't believe they are. There aren't many players and Brink has won a disproportionate amount of the enterprise business because they've been in the market for the longest with a cloud solution.