Welcome to NCR. It's a beautiful day here, Thursday in Midtown Atlanta. We would have loved to have you all here in person, we have a great show ready for you today virtually. We've got the whole management team here to share our progress at NCR and share our plans going forward. That little clip you just saw before I came on was a segment of all the clients we have literally in walking distance of our Midtown headquarters. You saw banks like B of A, you saw banks like Wells, you saw banks like SunTrust or Truist now, BB&T. You saw banks like PNC. You saw retailers like Publix across the street. You saw retailers like Whole Foods. You saw restaurants like Varsity, which is right down the street, or Ecco. You saw McDonald's, you saw Wendy's, you saw Burger King.
Those are all clients of NCR. You don't think about it because we sell to businesses, but as a consumer, you see NCR literally almost every day as you go about your business of going to a store, going to a restaurant, or going to a bank. I always start with customers. I start with customers because as a company, that's where I started when I joined two years ago. We said we're going to put our customers first. We're going to focus on our side with NCR are happy with the services that NCR provides. We feel strongly that if we provide better service, better quality products than our competitors, our customers will buy more from NCR. It's working. In 2019, we grew 8%, 10% constant currency over 2018. We had a very successful 2019. We started off great 2018- 2019. 2020 was a great start.
What drives that success with our clients? It's 36,000 employees, 36,000 professionals at NCR that each and every day go out and deliver to those clients. For us, it's very important that they treat every customer engagement as if that customer is the only customer we have. Whether you're a single store, single restaurant, or you're a chain of literally thousands around the globe, we treat you as if you're our only customer. Our employees and how we do that, how we change our company, and how we've been changing the last couple of years, literally changing 136-year-old company, changing the culture. Changing the culture to focus on customers, changing the culture to focus on our employees, and how do we get out and do that? I got a little clip here to show you. I'm going to head upstairs and join Owen and Tim.
While I do that, here's a little clip talking about changing the culture, starting with our customers, starting with our employees, then adding innovation and products to make that all happen. I'll see you upstairs. All right, made it back up. Owen and Tim. I thought that was a great clip to show a little bit about the change in culture at NCR, starting with our customers, then taking care of our employees. You saw Mike and Owen literally traveling the globe, I think we met 35,000 people personally. Then a little product innovation. Tim Vanderham, our CTO, you're going to see him later this morning. Tim over at Georgia Tech doing the hackathon with students and with our employees. How do we innovate on products? I thought that was a great little clip to start our show today.
We spoke almost two years ago now at our last Investor Day, and we laid out a strategy. We laid out a strategy for where we were going to take the company, and we said we're going to shift NCR to be a software and services company. We're going to shift our revenue model to be recurring revenue, predictable revenue, subscription revenue, SaaS revenue, but recurring revenue that we can book each and every year. Lastly, we're going to improve our EBITDA margin. We call that our 80/60/20. We're going to come back and recap this at the end when Tim talks through the numbers, but 80% software and services revenue, 60% recurring revenue, and 20% EBITDA margin. Those are our goals over the next four years. 2019, we had great success. Over 2018, we fixed some of the manufacturing issues we had in 2018.
We went out and fixed Digital Banking. We stopped losing customers. We started adding customers in 2019. Doug Brown's going to share a little bit about that later this morning. We improved customer sat, and we moved our company forward. In 2019, we had 10% growth. We grew 10% over 2018 last year. Our EBITDA growth was 11%. We expanded margin. We had great success heading into 2020. 2020 started really strong, and then we had COVID hit us just like a lot of others. More importantly, COVID hit our clients. COVID hit restaurants, COVID hit retailers, and COVID started to hit some of the banks with some of their capital spending. We've had some issues on our financials in 2020 that you've seen in second and third quarter results. In 2020, we continued to invest in our strategic products.
We continued to make forward progress with our customer sat. We continued to improve Aloha. We continued to improve digital banking. We have rolled out a next-gen cloud-based product in retail. We've made a tremendous amount of progress in 2020, even though it doesn't show up in our financials today that we've reported. Today, what we need to do is give you a little bit more transparency into that progress so that you can see and be as excited as Tim, Owen, the whole team that we have here today on the progress that we've made. We're going to share that with you.
I think most importantly, we're going to give you a sense that if you look at the sum of the parts of NCR, you take the components of NCR, and I'm going to walk through that this morning, and you're going to hear about that throughout the day, and you value NCR by each of the sum of the parts, the overall value of NCR is greater than maybe the market thinks we're trading at in today's market. We think we have greater value in the sum of the parts. My job, Tim, Owen, our whole job today is to make sure you walk away after this morning and feel the same. Our vision is to be the provider of choice to run the store, to run the restaurant, or to run self-directed banking. We're in three business segments today, banking, retail, and hospitality.
Underneath those business segments, you can see on this chart that we've got some sub-segments trying to provide this to you so you can see some of the sub-components and build a sum of the parts model around the various portions of NCR. If you look at this and you look at the various components, under hospitality, we're in the restaurant. In the restaurant space, we're the number one provider of enterprise POS software in the U.S. In retail, we're the number one provider of enterprise point-of-sale software around the globe to stores, literally around the globe. We're the number one provider. We're the number one provider of ATM sales of full-service ATM machines for the last two years. In digital banking, we believe we're one of, if not the largest provider of digital banking services to banks and credit unions in the U.S.
We also talk about payments in the retail and the restaurant space. We're going to try to attach a payment each of the segments, walk through them, Owen is going to sit down with the business unit heads and have them give you a little bit more detail. I'm going to go first to self-directed banking. We want to have the banking technology that helps you run your self-directed banking. In this area, we have two components. The first I'm going to talk about is Digital Banking. In Digital Banking, it's an approximately $500 million business, $500 million a year business for us today in Digital Banking. We have over 24 million users in Digital Banking. Again, we believe that we're one of the largest, if not the largest in the industry.
We know we're bigger than Q2 when it comes to rev and number of users. We know we're bigger than Alkami. We know we're bigger than Kony. We think we're bigger than any of the core providers like an FIS, a Fiserv, or Jack Henry have in this space. We're a very large scale. You're going to see when Tim goes through the numbers, we make money at digital banking. We've reinvigorated that business over the last two years. We brought a new leader, Doug Brown. You're going to hear from him later came in, invested in digital banking, opened up the APIs, added small business banking, and really reinvigorated that business model. We got back to growth in 2020. 2020 and beyond, we're going to be growing in digital banking.
In the other part of our banking business, we have about $900 million of ATM sales. Again, we've been the ship share leader for the last two years. That's the hardware component. We also have about $1.7 billion of software and services that sometimes is associated with the ATMs, but many times is just sold totally independent. You're going to hear about a deal we had where we sold to a bank, the software layer that runs over all their different ATM providers, so our boxes as well as the other boxes. That deal was purely a software and sales deal for that large regional bank in the U.S. That part of the business, the software and sales have been transitioning. Software and services have been transitioning to a recurring model over the last couple of years. It's a very solid, stable business.
We expect that to grow. It will grow with or without growth in the ATM business. The ATM business, we expect to be relatively flat over the next five years. We're probably a bit more conservative than the industry is predicting, but we think that's going to be a solid business with the growth coming in software and services at $1.7 billion, and then clearly digital banking being a growth leader. Solutions that run the store. In our Retail business, two pieces. Self-checkout. Self-checkout has taken off with COVID, whether you're a grocery store, a big box store, convenience store, everybody wants to put in self-checkout. We believe that business is going to continue to grow. We're the largest provider in the world of self-checkout technology, the software and the hardware to do self-checkout. That is predicted to grow.
RBR stats say 8%- 10% unit growth every year. CAGR of 8%- 10% unit growth the next five years. We're going to participate in that, and lead that growth in that business. David Wilkinson is going to get up and share a little bit more about that later. That's going to be a growth engine for our company with the growth in self-checkout. The other component is the enterprise POS. Enterprise POS, it's the software that runs your store. Wall-to-wall running and operating your store. It's a transaction engine that runs your store. We've seen all the changes, again, with COVID that have driven order at home. Owen has even learned how to order his groceries from his Instacart app, and have them delivered to his house.
Go pick up at a drive-thru, curbside pickup at a big box electronics store, whatever it may be. We see all that as consumers. Behind the scenes, the technology that you need that runs your store, the enterprise or the ERP software that runs your store, that we provide to over 1.5 million lanes around the globe. Those kind of technologies have to be upgraded to support all the new front-end systems. We've developed a new system, cloud-based, Open API, platform-based system. In the grocery side, it's called Emerald. That's out. It's in GA. It's up and running, and we're having great success. Our plan is to take those 1.5 million lanes, convert them onto that platform, which is a subscription-based business. We've figured out a model.
We know it's very important to do this with low risk-free to the grocer, to the retailer, so that they can do the migration. We've put a model in place that allows you to convert with lower risk in as little as six months, which is about 1/3 as much time as it typically takes to convert. We've got that model in place. We're out there competing and winning.[audio distortion] Lightspeed. We have the scale and scope many times over versus those smaller providers. We believe we will participate as this whole business, the enterprise POS business for retailers, goes through a upgrade cycle over the next five years. On to the restaurant. Restaurant, whether it's an SMB restaurant, we have the technology with Aloha to run your restaurant wall to wall. We spent the last couple years investing in that product.
We've got the cloud-based version of Aloha up in the marketplace and running today. We've improved our service model. We've improved, in many cases, invested in our go-to-market model for how we go out and sell and install and deliver and support. We've created a suite of products called Aloha Essentials, where we bundle up all the software, all the hardware, all the services, all the support, and we attach payments to go into the market and sell to the restaurants. In the enterprise space, we compete with Oracle MICROS. We're beating Oracle MICROS. We compete with PAR Brink. We're competing and beating PAR Brink. Size and scale in terms of our install base and our capacity to grow is much greater. In the SMB space, it's competitors like Toast that we see out in that market.
Our new product, our Aloha Essentials, is out winning against Toast. It's out winning against TouchBistro. We've taken that product, we've reinvested, and we're going to make the switch in 2020 and then 2021, where it's going to go back to growth. 2021, our restaurant business is going to go back to growth. It's going to get back to growth by winning more accounts. It's going to get back to growth by adding more capability, more share of wallet in the accounts that we have. It's going to get back to growth, really owning those enterprise accounts and growing on top of the business that we already have.
Dirk is going to give you some more details about that later, but we're going to get our restaurant business back to growth in 2021. The team you're going to see most of the team members say, "This is the team we put in place two years ago." It's the same team that we've been operating with. You're going to get to interact with a number of the team members today. Owen's going to walk through. Owen's going to act as MC today, walk through the business units and what each business line is doing, and then walk through the delivery units as well. Again, team we put in place in 2018 and continues to operate today. I'm just going to spend a little time on ESG. Obviously the social aspect of ESG, 2020's been a pretty active year.
We, like everybody else, have been impacted by some of the social change, social injustice, some of the racial activities here in the U.S. We've done a number of things. I've taken the lead on in our organization on DEI, Diversity, Equality, and Inclusion. Deb's joined me on that. We put somebody literally in charge of that. Sharita Donaldson's driving on a day-to-day basis. We've really stepped up to focus on the social aspect. On the governance, we've added four new directors since last time that we met. We've actually created a new committee, a risk committee of the board. That risk committee has responsibility for ESG, so that the things that we do, that Mike does, that Owen does, that Tim does while we're here carry on past the time that we're here. We've asked the board to actively participate in ESG. The environmental side.
The building, you saw the lobby when we started just a few minutes ago. This building is the first building in the entire Southeast to get double Platinum LEED certification. We're very conscious with our plans to be very focused on the environment. The agenda for today. Owen's going to take us through, as I said, he's going to operate as a master of ceremonies, literally for the bulk of the session around our business units. He's going to have a group session with the business unit leads, the segment leads. Frank Hauck running banking. Sean's going to come up and help him, and Doug, two of his members of his team. In retail, David Wilkinson's going to share more detail on our retail product set, and then hospitality, Dirk Izzo.
Owen's also going to do a roundtable with the functional leads, so talking about what we do with our lean factory, with our hardware manufacturing, and with our service delivery. Adrian Button's going to join Owen on stage for that. Tim Vanderham, who's our CTO, drives all of our driven company over the last two years. Mithu Bhargava, our Head of Professional Services. Owen's going to have a roundtable with the three of them. Tim's going to then close, and Tim's got a simple goal. How do we get to 80%,60%, 20%? How do the numbers lay out? It's not a hockey stick that's going to get us there. It's incremental improvement every year. He's going to give you the numbers. He's going to give you some sub-segment information around some of the parts that I just outlined there.
We've asked Frank Martire to say a few words today, our Executive Chairman of the NCR board. We're going to leave about 30-40 minutes for Q&A at the end of the session today. With that, I'm going to turn it over to Owen. As I said, he's going to operate as a master of ceremonies, kind of what he does every day. He does all the work, takes care of all the day-to-day. He's going to do that with our business unit teams as well as our functional team. With that, Owen, it's your stage. I think you're going to go actually to side stage and join the team. We'll just have you hop over there and join that team.
Have a great morning, and again, at the end, we'll give you a chance to jump in with some questions, and we'll have answers for you. Thanks for joining us.
Mike, thanks so much. Good morning. Welcome to everyone. Really appreciate you all joining us today. I'm here with three of the general managers who I'll introduce in just a second. As you picked up from Mike, the enthusiasm for the strategy that we've embarked on and are looking forward to continuing executing is something that we are all energized about. It's taken some work to get to this point. If I think back to 2018, as many of us arrived at NCR, what we saw were some real evident challenges to executing the strategy that we now have in place. We had issues from our hardware and our software delivery and quality standards. We were being challenged with our go-to-market strategy.
If I think about the organization structure that we had put in place, and I was going to use the word imposed on our markets and our customers, it really did not serve its purpose. We were a very siloed organization back in 2018. Each business had its own P&L, which really drove a siloed approach. Whether it was hardware, software, professional services, each of those businesses stood alone and stood facing out to the market. What we did not have was a cohesive strategy on how we should approach markets. We didn't have a cohesive strategy on how to make money, and we didn't have a cohesive strategy, most importantly, on how to take care of our customers.
The depiction in the slide is we put the customer out there on an island and said, "You need to figure out how to interface to us." What that led to was a high level of dissatisfaction, and as I said, a confusion in the marketplace as to who we are, what we were trying to deliver to the market, what we were trying to deliver in terms of investment into our company. We really felt we needed to make a fundamental shift. The fundamental shift that we made started with the organization structure, and we moved to a general management-driven model, driven through three industry groups, the Banking, Retail, and Hospitality segments. What we did is we aligned the responsibility of market definition, market prioritization, the product offerings that we needed to compete and win in the marketplace, the go-to-market strategy with the GMs.
Behind them are the delivery teams, and as I mentioned, you'll hear from some of those leaders shortly in a roundtable that we'll do. What we really asked the general managers to do was to understand the markets, understand the opportunities that are available to us, assess where we are from a competitive standpoint, make sure that they have a plan to fill the gaps, and make sure that we're in a position to go to market and win. I think the combination of responsibility put on the general managers and the willingness of our delivery team to really step up and address the gaps that we had in terms of quality performance has really allowed us to get to this point and execute on the strategy that Mike's outlined.
Excited to share with you what each of the GMs has to offer, and as I said, we'll talk to the folks on the roundtable on the delivery side. I want to start with Frank Hauck, who is our President of the Banking business. Frank, when I think about where we have evolved from, the expectation of we sell ATMs and that seems to be it. I think internally, we've totally flipped that on its head when we think S&P restaurant about digital banking and the software business that we're out delivering and how we're driving a recurring revenue. Yes, ATMs will always be a calling card, but it's not what's driving our growth, and I'd love to hear how you've positioned that and how you're thinking about the growth of the banking business going forward.
Thanks, Owen. Yeah, it's definitely exciting times at NCR. We look at our banking business really in two unique parts, our ATM-centric business and our digital banking business. Part of the reason why we want to share it this way is because banks are navigating sort of where they are, and NCR enters the market really with a leadership position in the number of ATMs that we ship, the number of softwares that are attached to ATMs, and the number of multi-vendor software applications that we have out there. As banks are navigating their time during the pandemic, we continue to see strong market uptick in ATMs, including our ITMs, which are interactive teller machines. Banks are evaluating the footprint of each of their branches around the globe, but virtually every single one has said that ATMs remain a critical component of their self-directed retail banking strategy.
The interesting piece is that for every ATM that we sell, we sell software that surrounds it and services that really drive a long-term revenue stream. Industry analysts predict that the ATM business will be relatively flat through 2025, with transactions up slightly. We believe that banks will continue to make strategic investments with the software that really drive a unique and compelling customer experience. Our untethered software has had an amazing year, which is sold independent of an ATM. These include things like multi-vendor ATM solutions, enterprise monitoring, transaction processing, branch transformation software, security applications. We had some amazing wins at places like PNC and TCF. These are recurring revenue streams that now NCR sells in addition to the ATM business. Additionally, we're looking differently at our ATM business, moving it more to an as-a-service model.
We believe that that subscription area, which will cover software, services, hardware, and then other things that banks do to service their banking clients will be a key piece of this market going forward. In our Digital Banking business, we're really proud about what we've built. We've got roughly 24 million users, 650 customers around the globe. We've got a new Channel Services Platform which allow people to essentially have the same infrastructure go for teller transactions, ITM transactions, teller transactions, call center, leveraging that same infrastructure going forward. U.S. Bank rolled it out. It's in over 2,000 branches. The money that they've saved has been really remarkable. I'd like to introduce Shawn Phillips, who's leading our ATM-as-a-Service business, to tell you more about this exciting opportunity.
Thanks, Frank. As Mike mentioned earlier this morning, ATM-as-a-Service represents an opportunity for NCR to transition a portion of our ATM hardware business to a subscription base. If you think about it, we can combine our experience of over 50 years in the ATM business to wrap a portfolio of services and software to run. When the FIs think about IT outsourcing, they think about reducing complexity, reducing risk, and finding a single point of accountability, and that's NCR. We also have the opportunity to shift our mindset from selling pieces and parts to that of an outcome. The question becomes one of how do FIs decide who they want to partner with?
We went to our most recent customer, Fremont Bank in Fremont, California, and said, "Why NCR as a partner of choice for ATM-as-a-Service?" Fremont was very clear. They said to us, "When ATM security mattered, we chose NCR. When ATM availability mattered, we chose NCR. When ATM compliance mattered, we chose NCR. When ATM innovation mattered, we chose NCR." As partner of choice, we transition from vendor selling pieces and parts to an outcome-based strategic partner. When we shift to that, the reward is tremendous for NCR. We now earn the ability to demand a larger portion of that customer's wallet share for accepting that outcome-based focus.
Five years ago, NCR did not have the structure, as Owen shared, to be able to focus and deliver on the outcome. Now that we're structured and have the executive support and the leadership to be able to provide this outcome, we can now demand it in the market and be the leader in this space. Customers are responding with adopting this share or this type of consumption of the ATM model. We also have the opportunity to shift the focus, not just on the economics, but on the nature of this relationship. By having a strategic partner relationship, we now have the opportunity to cross-sell and upsell as we continue to grow our ATM portfolio. Thanks, Frank.
Thank you, Sean. I'd like to have Doug Brown, who runs our digital banking business, tell us more about that digital banking business. Doug?
Thanks, Frank. I'm Doug Brown, the head of Digital Banking here at NCR, and I've been in this role since the fourth quarter of 2018. I'm really proud today to share with you some insights about NCR digital banking leadership in the market today overall, and our posture for growth going forward. Let me go into some details about the actual leadership position which we retain, starting with our top-line performance. With over $500 million of annual revenue, we are by far and away the largest provider of digital banking in the industry today. It's built on a base of over 24 million digital users. That represents a 12% year-over-year growth performance, and it includes both consumer as well as business end users of the platform.
That user-based community is really driven by over 650 client institutions that span and range from very large banks, such as Synovus and First Horizon, and most recently Wintrust, to community and Main Street banks, such as First Community Bank in Texas, and leading credit unions such as Allegacy, SAFE, and Pioneer. We're really proud of the full spectrum of market we service today with our platform. All these financial performance metrics are really supported by great customer metrics. When you look to the middle column, you'll see that our mobile apps, for example, score an average 4.8 star rating out of five stars in both the Apple App Store and Google Play. That's really phenomenal performance and signals how happy and delighted end user customers are with our NCR digital technology.
We're really proud that three of our banks and credit unions were named as top mobile providers, most recently by MagnifyMoney's 2020 survey of over 300 financial institutions. We're really servicing and providing to the best of the best. We're a leader in processing mobile check application for remote deposits. We're servicing the largest of large institutions there, as well as the entire base of our community and credit union banks. Looking forward, we're really excited about the expansion of our solution footprint in digital and digitizing the branch experience. Today, we're now live at over 2,250 branches across North America, where we're using digital engagement in the branch environment to expedite servicing and make it a delightful customer experience. We're really proud that industry-leading analysts such as IDC and Celent have called us out as having the best of best solutions.
This is what really positions us on a go-forward basis for very strong growth. When we look at NCR Digital Banking, what really drives and gives us that confidence in the go-forward model? First, we're built on superior customer experience. App Store ratings and client delight is something that we're maniacal about. We're going to continue to be. Secondly, we're very proud of innovation, where we bring new product capabilities to market through our digital-first strategy, and really build a platform model that allows for the integration of other new capabilities from fintech community or even developed by our customers. We really like to do co-innovation together with our market industry and client partners. Thirdly, we're the highest return on investment platform because of the flexibility and capabilities we deliver to our clients today.
Lastly, what is a really important element of success is the bank and credit union domain expertise which the team has in delivering to market today. It's something that is uniquely advantage to NCR and gives us the confidence for the growth on a go-forward basis. With that, I'll turn it back to Frank.
Thanks, Doug. Now I'd like to leave you with two key points. First, as Shawn shared, we are leveraging our recognized brand, in the ATM business, our global reach, and our services scale by really surrounding the ATM with recurring software and services revenue and shifting the ATM business to an as-a-service model, which gives us a great runway for the future. Second, our Digital Banking business is large and getting larger. With 24 million users who give us great usability scores, our focus around leadership, around new focus of innovations and new functionality, it's clear the number one priority that banks have right now. We're in the right place at the right time with the right company. With that, let me turn it back over to you, Owen.
Great. Thanks, Frank. I think it's so exciting to see what the assets available to us and to our customers look like when we think about what our bank customers are trying to do in satisfying their end user and trying to provide service and deliver it with convenience and in a manner that really services them. When you look at digital banking, when you look at what we're doing with the ATM and the software around it, we're really helping them get to their strategy of deploying a self-service bank. Great work on everyone's part. Thanks. Next up, David Wilkinson, who is President of our Retail business, is going to talk about what he's seeing in the marketplace. Again, where we find ourselves is in a great leadership position, whether we look at it from the traditional hardware side of the house.
I would suggest we've kind of put that in its position, which is a great calling card, but the ability to leverage our position as the leader in point-of-sale enterprise software and what that means to our strategy and our marketplace. Why don't you share a few thoughts there?
Yeah, perfect. Thanks, Owen. It's an exciting time, as Frank said, to be here at NCR. I'm really excited to be part of the retail business for a couple of reasons. One is it's an exciting time for the retail industry and technology. Traditionally, retail has under-invested in store technology, and now we're starting to see them spend to get ahead of the transition and consumer behavior that we're seeing with the acceleration with COVID. The second reason I'm excited is because NCR has done a great job of investing in the platform and the technology that's going to move retail forward. Let me tell you a little about our retail business, where the retail business that we have today is our point-of-sale business is the core to everything that a retailer does to run the store.
Think about all the consumer data, the transactions, inventory, payments, online ordering, all of that flows through our core. That becomes the central part, the fundamental IT enabler to what's happening in the enterprise. The other side of our business is really around self-checkout, and when I think about self-checkout, it's a growing business. The industry analysts believe that it's going to grow at 8%-10%, and we think that our business will continue to grow at about that market rate. Let me jump back to when I think about the enterprise point-of-sale business. As I said, it's a fundamental enabler to the IT strategy of our retailers, and we're the global leader in software in this space. When I think about what's happening in the self-checkout business, we're also the global leader in self-checkout.
Self-checkout, if you've ever used self-checkout, which most of us have, we provide the hardware and software that you would see in those deployments, mostly in big box and grocery. When I think about what's happening in the retail industry overall, retailers are facing an accelerated digital transformation and an upgrade imperative to keep up with the changes that are happening in consumer behavior. We're seeing things like new entry points, like digital shopping, online grocery ordering that wasn't happening pre-pandemic. Services like Instacart are becoming required for all of our customers, and they have to serve their customers not only in brick-and-mortar traditional retail, but also online and buy online, pick up in store, curbside, home delivery. All of those things are happening, and the retailers need the ability to serve those customers with a unified platform, and that's what we bring.
In January of 2020, we released our retail platform and our next-generation retail store architecture with our flagship cloud-based core point-of-sale offering called Emerald. We have eight customers that have signed and four customers that we have up and running. This platform helps customers evolve faster on a lower cost curve and gives them the flexibility they need to launch those new services and those new capabilities to their customers. As you can see at the bottom of this page, we do this for the largest brands in the world. If I think about the breakdown of the business, we have a very diversified revenue stream. However, a large part of it comes from grocery and big box. 67% is grocery and big box, and those retailers have generally done really well during the pandemic, and their business continues to thrive.
If I think about some examples of how we serve those clients, I'll start with Walmart. Today at Walmart, we provide the front-end self-checkout in the store and wall-to-wall services for Walmart. Think about now, it's peak time for Walmart and their stores, and we have accelerated SLAs during peak. The last report I got is that we were 99.99% available for the lanes in their store. Think about what that means to Walmart and the impact to what they're doing. We're also working on some digital transformation activities with Walmart as they focus on customer safety and creating touchless transactions in their stores. For Pilot Flying J, not only do we provide that core point-of-sale platform, but we've also virtualized all the applications in their store, both NCR and non-NCR.
What that does is it creates a more manageable environment and the ability for them to deploy technology faster in the store. It also breaks the traditional hardware and software requirement, so we can create flexible deployment models where Pilot can now deploy software on different hardware platforms, and we break that refresh cycle on the hardware side to expand our software footprint. At REI, we provide, again, the core point-of-sale platform that's the store that's deemed the central part of what they do. We can create mobile point of sale. We interface to their loyalty system, and we also provide access to their inventory data. If you think about our business, all of these industries are deemed essential, and those are the industries we're providing.
Think about the capabilities that we as NCR provide to our retail clients, and we are critical to what they do and how they run their store every day. Let's have a look at the platform that I talked about. Really, we have a unique platform that are going to help retailers through this refresh cycle that I'm telling you about. All of these stores need to hold on to their customers. They need to provide the integrated capabilities that I just described. All of the retailers have an imperative to integrate to the digital front ends, to third-party aggregators, to home delivery services, to curbside. They have to create drive-thru opportunities.
All of these things are driving this refresh or this upgrade cycle. Our platform allows retailers to deliver those digital capabilities and respond to the customers, respond to the change in customer expectations that's being accelerated by COVID. Across the board, these digitally enabled channels are seeing significant increase. I talked a little about Instacart. When we looked at online grocery pre-COVID, it was sub 5% of grocery shopping. We expect that to grow at 25% compounded annually through 2025. It will continue to be a significant part of how consumers shop for groceries. Again, these are all things that are creating this upgrade imperative. How do we deliver those services in an integrated fashion? Our next generation platform, our retail platform, allows customers to migrate in a virtualized environment. I described what we're doing for Pilot Flying J.
We can virtualize NCR and non-NCR applications and create a single point of accountability for running the store. Again, that creates flexibility. It doesn't require a rip and replace. We're going to call this in the market software-defined store, and we're seeing tremendous success in the marketplace with that. What this does for us as NCR, it allows us a foundation to transition to the subscription model that we're talking about. It provides us a foundation to grow through new applications and to expand our overall addressable market. In addition to the technology itself and the platform that we've created that's differentiated, we have a unique set of capabilities around services, both professional services, the ones that are very tied closely to our software.
We have 2,000+ service professionals that can provide advisory, consulting, and migration services, as well as ongoing application management for this platform as we make this transition. Once we deploy, we can support customers anywhere they are. We have over 19,000 technicians around the world that are there available to perform in-field service calls if we can't manage and remotely resolve the trouble through our Digital Connected Services platform. When I think about how we're positioned, we're well-positioned not only from a technology standpoint, but from a sales and services set of capabilities to make this transition to the platform world and make our shift to subscription. As I said, NCR Retail is really well-positioned for growth. Today, there are about 1.5 million lanes around the world using our enterprise platform, using our core point-of-sale solution.
Our strategy is to move and migrate those customers to our next generation cloud platform. That platform bundles all of the things required to run the store, the software, the hardware, services, adding payments, and then we sell it in a flexible commercial model that's a subscription per lane per month. When we migrate these lanes to a platform as a subscription, we bundle it again with our services and payments. What that does for us is it nearly doubles our wallet expectations from our customers. We can double the monthly revenues from our customers. This isn't just something that we say, Hey, look at what we're going to do in the future. This is what we're executing today. We launched the platform in January of 2020, and we're making great strides. I talked about the eight wins on Emerald. We're also winning against our competitors.
We're winning against GK. We're winning against Toshiba. We're winning against Lightspeed. Some of these instances, we actually have won back customers that had made a decision years ago to leave NCR. We've won them back. When I think about why, it's the scale, it's the scope of what we have. It's our technology and our service delivery capabilities. We're deploying these technologies in weeks and months, not years. That's a big deal as retailers are trying to react to what's happening in the trends in consumer behavior and more and more digital services capabilities in the store. We already provide the core point of sale that runs the store. It's a very logical, easy step, and it's a simple step where we can just connect this core to our platform to allow multiple channels to interact with the store.
We still believe we're going to grow self-checkout at the market rate, 8%-10%. In summary, our strategy is pretty straightforward. We're going to retain our base and migrate customers to the next generation platform, winning the lane upgrade imperative, and we're going to continue to grow self-checkout. That's our retail strategy, and that's how we're going to win. I'll turn it back to you, Owen.
Great. Thanks, David. As I sit and listen to both Dave and Frank, and I know we're going to hear the same from Dirk, is we have built our products, we have laid out our strategy. For those of you that heard it in 2018, it's pretty consistent. We've evolved it, we've modified it, but we've been on track. What we needed to do was build the products, build the go-to-market infrastructure, make sure our service delivery was right, make sure our ongoing support was right. One of the hardest things to do is to evangelize a marketplace, right? To think at the end user to start moving on the adoption rates. Nobody wants to talk about the good things of COVID because it's been a hell of a year.
If you think about what happened, the acceleration and the adoption rate of technology by the consumer has forced our clients to now understand that it's no longer a nice-to-have, it's table stakes to have this digital platform to deliver their capabilities to the customer. It's a perfect storm. We've been investing in our product, we've been positioning our offering. We've now gotten this tailwind of By the consumer, and it's really paying dividends for both the banking and retail business, and it sure is on the restaurant side. Dirk, why don't you take us through what's going on in restaurants?
That'd be great. Thank you, Owen. I've been in this role for a year now, and I thought I'd start with just a little bit of background on our business. We help our customers run their restaurants from a wall-to-wall perspective. It includes the core point-of-sale, as David described in retail, which runs and takes a payment from a transaction perspective. It supports consumer loyalty. It supports the back office, inventory, all aspects of that restaurant. We wrapper this with wall-to-wall services, we can take care of everything in that restaurant for them, giving the GM or the general manager or the owner the ability to call one number to be able to have access to us, to be able to come fix anything that's broken at the edge, any technology that's broken at the edge. I feel very good about the overall strategy.
Let me double-click a little bit and walk you through the business specifically and share what we're doing. We have about a $700 million business here, and 94% of this business in Hospitality is restaurant-based. Of that, you could see the breakdown between enterprise and small businesses. The restaurant business, we all know, has been hit very hard by COVID, extremely hard by COVID. The good news for us is that the majority of our business is quick service-based, and quick service has done quite well during this whole COVID experience. They've leveraged their drive-throughs, curbside pickup, and then delivery as well. We've seen their business stay relatively stable during that time. We have 100,000 sites worldwide that we actually support and manage that uses our core technology platform, Aloha. We're number one by RBR's measurement in the U.S.
Some fun facts here, half of the top 100 brands work with us, 32 of the top 50 quick service restaurants work with us. I thought it'd make sense to share with you a little bit about these restaurants and what they're doing with us to bring some light to that or some color to that. I'm going to start with Starbucks. Starbucks works with us globally. In Europe, we've actually deployed our DCS, our Digital Connected Services, to have visibility of their technology at the edge. That allows us to proactively manage that technology. We can remotely resolve things that are broken, and if we can't, we send one of our 19,000 professionals out there to fix those things. The core goal is availability. Chipotle is another great customer.
They've been growing like crazy, and to help with that growth, they put a digital make line in place. Mithu is going to talk about this a little bit later in the round table, so I'm not going to go deep on Chipotle, but we've done some amazing innovation with them. We've also grown our enterprise accounts. We have over 10,000 new sites in enterprise with customers like Raising Cane's and Topgolf, just to name a few. A couple other things I'd like to touch on quickly. One of the amazing things about our product is we can scale down to a single operator and scale up to thousands of sites. We've been with some customers from the very beginning. A good example of that is Chick-fil-A.
If you ever go to Chick-fil-A and go to the museum, Dan Cathy will walk you through, and he'll show you the first NCR cash machine that they used, which is very cool, I mean, from a history perspective. We can scale from a single site all the way up to thousands. I don't know of another company that can do that's very important, especially for people that are growing their franchise businesses. Lastly, I want to touch on a customer that was hit very hard during COVID. That's Coupa Café. Coupa Café came to us, and they said, "We have a challenge. We need to create a contactless environment." Let me describe what's happening, I'm sure a lot of you have experienced this as you've gone out to eat at a restaurant today.
If you go out today, people don't hand out menus anymore. A lot of them have QR codes. You click the QR code at your table, and you get a menu, and you can go through the menu right on your phone. When you go through your menu, the waiter or waitress comes over, and you can order the food. It's a standard process from there. We took it one step further. We made that menu interactive. When you sit down, you scan the QR code, you go through, you order your drink, it goes to the bar. When you order your appetizer, it goes to the kitchen. When they're ready, they actually run it out to you. It's very convenient from a consumer perspective.
The best thing about it is at the end, if your kids are driving you crazy or you're going to a show or something, you get to scroll down and pay. You don't have to try to find your server to get the check and then pay, and there's no moving of credit cards back and forth. It's a very cool consumer experience. In fact, 50% of the orders at Coupa Café are going through that transaction base right now, today. For the restaurant itself, the big benefit is labor is tough to find right now. It's really difficult. This takes labor. You can run your restaurant with less labor because the consumer themselves, we would be ordering, and you don't have to have that waiter or waitress there. You just have runners out to the tables.
On top of that, they're seeing increase in orders and increase in turns just because of that flexibility. That's a great example of some innovation that we did during COVID to really help customers, and that's available at 13,000 sites now. Anybody that has our mobile capability is running with that capability today, generally available. Let me drill down into why people are choosing NCR Aloha. The first thing I would tell you is we have the core restaurant management software, the ability to take a payment, deal with loyalty, deal with inventory management, all aspects of the restaurant. We call that Aloha, and it's our restaurant management platform. The second piece is what I just described with Coupa Café. It's a digital experience, both on-prem and off-prem, and we support that. That connects to our platform, our Aloha platform, and goes down to the kitchen.
Tim Vanderham is going to talk about that in a little while and give you more color on what exactly that does and how it works. To bring it to life for you right now, though, let me describe something that you would have on a Sunday afternoon game day. You want to order some wings from Buffalo Wild Wings, and you go to your Grubhub app, and you order your wings on your phone again. When you press order, it passes that to us. It's our technology.
Our technology grabs that order, it puts it to the appropriate restaurant, they create the wings, and they give feedback back to Grubhub to let them know when it's going to be available, and so they can send the driver to pick it up and deliver it to you or I. It's a great experience, again, going through our core platform. The last thing we do is we wrapper that all with wall-to-wall services. As I mentioned before, we have 19,000 services professionals out there. We have global help desks. For those GMs and owners, they can pick up the phone and call us, and it's one number to take care of all technology in their store. We're doing that with a number of customers today. We bundle all that together, and we call it Aloha Essentials.
You'll hear me refer to that a number of times today. We sell that for a monthly subscription. We still get transactions on the payments, and we still get transactions on those clicks from an order perspective from Grubhub or the digital application. It's been really sticky, and it's really taken off in the SMB marketplace, the small business marketplace. Let me share why I think we can win in this marketplace. I would tell you the first thing when I took this role on is we had some challenges with customer satisfaction, with service and delivery. I will tell you, we made great strides this year, big steps to fix those things, and it showed up in our customer surveys and our NPS score this year, which is fantastic. That's the baseline that we have to work off of.
From there, we can increase our share of wallet with these customers. We've only transitioned a small portion of our customers over to the Aloha Essentials, and when we do, we see a doubling of ARPU. We have a great base, 100,000 sites out there worldwide. As we convert them over, we're seeing an increase in ARPU. Additionally, we have to focus on new banners and selling new banners. We've done three things to support that. First, we've doubled down on our salespeople, and we put them in tier 1 and tier 2 cities, and we want to get them out there to be focused on the customers.
The second thing we did was we did blitzes in five cities so far, where we take 50 professionals, we stand them in the marketplace or send them into the marketplace. They go door to door and talk to the restaurateurs. What do they like? What's working? What's not working? That has opened up hundreds of opportunities for us to go farm and cultivate. I feel very good and very strong about the backlog we're generating there. The third thing we're doing is around the channel. Our channel, we're infusing marketing dollars into the channel, and we're doing blitzes in the channel territory so they can actually grow as well. I think the combination of those three things will really boost our sales and increase our market share. Now, here's the biggest benefit we have. I mentioned 100,000 sites.
We've only converted 3% of them so far. If all we do is convert the majority of those sites, we will be wildly successful with the numbers that Tim Oliver is going to share with you later. The last thing I'll mention is on the margin side. We'll get enhanced margin through mix. As we mix to the Aloha Essentials and we get the hardware as a service, we get software as a service, and we get the services wrapper around that, it's going to give us a much stronger rich, and we're going to enhance the margin for the business. I'm proud to say that we deliver earnings every quarter of the year at an annualized basis with this business when my competition is losing hundreds of millions of dollars. It's a great business.
I hope this helped you understand a little bit about the business and, more importantly, about the growth trajectory that we have going forward. With that, Owen, I'll turn it back over to you.
Great. Thanks, Dirk, Frank, David. I was asked last week in an investor conference, as the operations guy, Mike has his vision and strategy, how are you feeling about the operations of the business, especially given some of the history? My response was an immediate. Without having been through 2 years of some really tough decisions, some tough initiatives that needed to be addressed, from our product quality to our support organizations, to our manufacturing, to our software build, to our on-support groups. It's made a huge difference, the effort over the last two years. It's made a huge difference to have this model and these leaders in place, targeting our resources on the market opportunities that make a difference. You hear in each one of them talk about the competition. We know who they are.
We believe that we are going to compete and win against them in each of our markets. Really excited about what the team has done here. Tim Oliver is going to walk you through the numbers in detail and peel the onion back even further on some of the segments that each of you talked about. Up next, we're going to spend some time with the delivery team, and those are the members of the organization that You were the man under the gun, if you will. Now you own, after having fixed manufacturing, you own what we've announced as the Lean manufacturing. Maybe you can talk about the Lean manufacturing and the impact on balancing quality and cost efficiency, because I know both are absolute requirements. We've defined those as the priorities. We've taken the P&L out of the equation.
How are you thinking about delivering on both of those goals?
Yeah. The lean factory, Owen, pulls together manufacturing operations, our supply chain, our service operations, procurement, and really gives us just a different approach to the way that we've looked at the business previously. Gives us a holistic wing-to-wing opportunity to look at the products that we're developing through the whole life cycle. Combining the two organizations, we're already seeing the impact on the product side with our product reliability. One great example is our modules in our ATMs. We combined the teams. We looked at how do we improve through the whole life cycle from the time that we manufacture through the servicing. We've improved our reliability by over 40%. Just with the early opportunities that we've seen, we see that the whole new approach is going to give us a different product reliability that we can install in the fleet.
Second area we focused on is product standardization. We've reduced standard offers through last year. Standard offers offer a number of benefits for our customers, reduced lead times, and standardized products in the fleet. For us, reduces our inventory, reduces the number of products and parts that we need to purchase. We've seen significant improvements both on our working capital as well as the ability to deliver on time for our customers. Our lead times have reduced by over 40%, and we're consistently now delivering product in the high 90%. We've seen great uptick from our customers in the CFI market, North America, 30% of our total orders for ATMs last year were of preferred offers. Our footprint.
In 2018, we reduced the number of rooftops we had by 50%, and we partnered with a number of contract manufacturers, and we're really now starting to see the benefits of that come through. We've right-sized our internal factories. We've seen our utilization now improved by 40%, and now it gives us the flexibility with our contract manufacturers to increase volumes when needed as we continue to grow our products. Lastly is around connecting our products in the field. We have over 13 million devices, and we heard David talk earlier around the performance that we had with Walmart through the peak season last week, where we had 99.95 of the lanes available. That's all through the ability to connect our devices. Our Digital Connected Services platform is going to be fundamental as we continue to grow our services business.
We see that as a key enabler for our customers to have more uptime on the product, as well as from a services perspective, when we dispatch an engineer, we know we've got the right part for the engineer to perform the service operation. We're in a great position to outperform our competition, both on providing world-class products as well as world-class service.
Right. We see the Net Promoter Score that has, for the company, more than improved threefold. A lot of it has to do those quality measurements. I know for the investor group, we lost $125 million within the hardware operations in 2018. We got close to breakeven last year. You look out to 2021 and beyond, you're comfortable the cost structure you've built and the flex you've built will allow us to operate that business where?
Yeah. The volumes that we've seen through this year is what we've right-sized our operations to be profitable moving forward. We can flex up when needed, but we have the infrastructure in place now to be profitable with the volumes that we see through next year.
Awesome. Great. Thanks. Tim, you came on board about the same time Mike and I did. I think July of 2018 as the Chief Technology Officer. One of the things that you were immediately challenged with was how do we transform the business to be a software-led business? How do we put the discipline, the methodology, the architecture in place that really credentials us as a software company? We had put the flag in the ground early, and we wanted to continue that prioritization. What did you find, and where do you think we are today as a software company?
Yeah, thanks, Owen. That's a great question because as we wanted to make that shift in 2018 to being a software and services-led company, I came in and I did the assessment of the organization. I realized really quickly we had to rally around four fundamental parts that I think are fundamental aspects to being a strong software company. One is to institute a really strong process discipline. The second was to build a platform where we can deliver common business capabilities for the industries that we serve. Third is to create that modern software architecture so we can be fast and nimble. Finally, to create a culture of innovation for the company, not only in software but kind of across the company.
I can share a couple of examples across the industries that we've really proven, I think, over the last two years that have shown that we are now a software company. If we start on that strong software discipline, we got a lot of feedback, just like we did in the hardware world, where we weren't delivering on the expectations for our customers. I implemented a Say-Do Ratio. What is our Say-Do Ratio on software quality, on software deliverables? Are we making our milestones? Are we making our customer commitments? We did that in the wide open. In every industry, we published our roadmaps for our strategic growth platforms, for our core deliverables for our customers, and we review that with our customers on a monthly and quarterly basis and measure ourselves against that, and we've greatly improved. David mentioned Emerald.
I'll use retail as an example here. David mentioned in retail, our next-generation solution, Emerald. We've now got eight customers on board. We're rolling out to multiple sites with the Emerald solution, and from the beginning of our first pilot clients, all the way through now BevMo! and SpartanNash and Bashas' that are going live, we've shared with them our fundamental roadmap day in and day out, quarter over quarter, and we're delivering.
Yes.
Our customers are really happy. We're getting good feedback around that, and it shows a testament to that Say-Do Ratio of changing inside our software culture as a company. The second area was, how do we build a platform? A platform that serves business capabilities for banks, retailers, and restaurants. We know our mission is to help our customers run their store, run their bank, run their restaurant, we've created a platform that really creates services for those industries to serve their consumers. In the retail and restaurant space, you've heard this from the GMs, we have a platform, a Business Services Platform that has services like a menu service, a catalog service, an order service, services that allow them to interact with their consumers day in and day out, and meet the needs of their business.
I'll major on the banking side for an example here today. We have a Channel Services Platform that really bridges our digital banking solution, where we do millions of transactions a day. Millions of transactions a day around balance inquiry, money movement, bill pay. As we created our Channel Services Platform with additional services around deposits and check capture, tying that into that digital banking solution, we're able to offer a whole new set of services to our customers. CIBC is a great example. On your mobile device, our business banking customers for CIBC can pre-stage transactions on their mobile device and then complete that in the store or in the branch later, or at a locker. That's live in production today with CIBC, which is a great example of how we're building a platform for speed and agility with our customers.
That all flows directly into creating that third area of a modern software architecture. A modern software architecture where we've really embraced a dual cloud strategy, leveraging Google Cloud Platform and Microsoft Azure to create those services that I previously referenced, where our customers can easily integrate those. Easily integrate those into their solutions in a very open API ecosystem. That's table stakes today in the industry of having an open API ecosystem where our customers can integrate their own solutions, our solutions, and third-party solutions to serve their customers. A great example of this sits in the hospitality space. COVID hit us in March across the globe, restaurants were largely shut down, and they had to figure out how they were going to take online orders, and serve that through delivery or through pickup in the store.
Our platform and the services that I previously mentioned allowed our customers to rapidly respond. Three great examples are Nando's in the U.K., KFC Australia, and Dirk already talked about them, the Buffalo Wild Wings right here in North America. Each of those three customers increased their online ordering in a matter of days by over 200% when COVID hit. That just goes to our modern architecture and how we can quickly scale for our customers, and that's happening day in and day out for thousands of customers across the globe. The final area I would say that really solidifies us being a software company is that culture of innovation, and that culture of innovation allows us to rapidly respond to opportunities with speed and agility for our customers. It doesn't just start and stop with my software organization. It extends across the entire company.
When you think about Mithu's organization and how they're out with our customers day in and day out, implementing our software, co-innovating with our customers, it just shows how that culture of innovation has spread much further than just the software organization. We're doing that with our people. We're doing that through hackathons we run internally, hackathons we do jointly with Mithu's team and our customers, and really focusing on hiring the right talent and the right software skills to drive our company forward. The team's been incredibly receptive. We've made a lot of change, a lot of progress in this transformation. At the end of the day, it's the people that we have, the platform strategy that we have, and that continual constant innovation mindset that's going to allow us to be successful today and in the future with our customers.
Yeah, those are great stories. I think both the long-term commitments that we've made on a product, as you gave great examples of our quick turnaround. The responsiveness of the organization to immediate customer needs doesn't get sacrificed for looking at long-term development of product, and getting them into the marketplace. You mention culture a lot. We get asked about culture, there's a big shift, we believe. I think all of us see it. It starts, I think, with the outfits maybe-
Maybe.
...that the CTO brings to the table, but I think you've done a great job. Maybe just comment about how you're seeing that culture shift within the company take place with both existing and new employees.
When we look at the 4,000+ software employees that we have in the organization, it's really around ensuring that we've got the right talent for domain knowledge across banking, retail, and hospitality. We're hiring new hires from universities just like we have across the street at Georgia Tech, and really build that funnel, as you said, build that pyramid, so we've got the right balance of domain knowledge, with skills that have been in industry for a while, with new talent coming in that has a new, fresh mind for innovation as well. We're seeing great progress there across the board.
Great. You mentioned Mithu and the professional services team. Your role has certainly changed. Likewise, you were maybe a couple of months ahead of Tim and I and Mike into the company, and you've seen huge change in what has been a really critical part of our business. Maybe you can talk a little bit about how you play the role of fulfillment of the customer solutions that Tim and team are architecting.
Absolutely. Professional Services is that trusted technical advisor that brings end-to-end solutions to life for our customers. You heard from our general managers about our next-generation software solutions. Now, as our customers transition to this next generation of software solutions, we've actually extended our portfolio of services to work with our customers through the life cycle. We now lead with advisory services. We work with our customers on co-innovation and implementation of software solutions all the way through to the ongoing management of their applications and actual operation of their business processes. What we've noticed is as we started to work with our customers through that life cycle, we're essentially becoming integral extensions of their technical teams, which is absolutely great to see.
When we take a step back and look at professional services from an organizational perspective, we have over customer-facing software professionals in 55 countries with deep domain knowledge and industry expertise, working with our customers every single day. As Tim talked about this shift to a modern architecture, a shift to an open API ecosystem, we're constantly working on revamping our skill sets and bringing new talent and new skills to the table so we can fully lead our customers in their transformation journey. In a nutshell, Owen, when I talk about professional services, what I'd say is that professional services is that glue that works across our customers, all parts of NCR, and our partners to bring our software solutions and technology innovation to life.
Yeah. I think that's really an important part. I know both of us come from a heavy services background-
Yeah.
...the role of services. You mentioned being an advisory and a partner. Sometimes that gets lost, right? People now become the do what I say, not what I do. You've really balanced the equation of bringing expertise and really getting your team's hands in the mixing bowl, if you will. I love that analogy of the glue because I think we have all these assets, the hardware, the software, the capabilities of NCR, and I look to your team to really be the mortar, the glue that holds it all together. Maybe you can talk about some customer examples of where your team has taken from an advisory guiding our customers to implementing and ongoing relationships.
Absolutely. I always say professional services is that engine to drive customer-driven innovation. Our response from our customers has been hugely positive. Customers come to NCR for our technology. Customers come to us for our industry expertise. Most of all, they come to us for our people and the trust and the relationship that we build with our customers, right? To that point, we're seeing a shift in how customers are choosing to engage with us. They're moving away from one-time transactional engagements to long-term multi-year professional services engagements. They're also starting to engage with us increasingly in an advisory capacity. All this sounds great, Owen, but nothing illustrates it better than actual customer examples, so I'd like to share a few. Whole Foods.
We signed a very large five-year POS subscription to run their kitchens and their markets, leveraging our advisory services and our ongoing application management services. A huge testament to the strategic relationship we have with Whole Foods, but also to our next-generation retail platform. Looking at our restaurant business, great example is Chipotle. As Chipotle started to move towards a digital channel strategy, we worked with them on a solution leveraging our Aloha platform. They could essentially create a second make line for digital orders so that they could increase production capacity without adding any physical footprint in their restaurants. The results have been amazing. Our joint efforts have resulted in improving order accuracy by 99%. Another example, RBI, a marquee restaurant customer. We're running their end-to-end software applications, keeping them up and running so that they in turn can focus on their core business, right?
Moving to the banking side, Trustmark. This is a great example of a pure advisory engagement. Trustmark came to us and said, "Help us build a modern branch infrastructure." We helped them redefine their consumer experience, talked about how they can drive up more consumer adoption, drive operational efficiency. To your point, Owen, very different type of engagement. I could go on and on about this, but I'll leave you with one last example. We signed a 10-year PS engagement with a large European bank to essentially deliver and run their ATM software and services in a multi-vendor complex environment. These are the type of engagements we're now seeing. Hopefully you share the enthusiasm and the optimism we have about our professional services business and the strategic impact that we're driving for our customers.
Yeah, I do, and so do our customers. I've mentioned this a couple of times. Our Net Promoter Score, which we made a leadership decision to put our Net Promoter Score out there for everybody. We tied 10% of everyone's bonus to that across the entire organization, from Mike to all of our frontline employees. I think what you all have delivered, whether it's on the quality of hardware, on the software quality, and hitting the milestones committed to, and then delivering the total package, our customers are validating that we're in a place that we weren't even close to two years ago. I really compliment you and your teams and the rest of the organization for really taking a hard look in the mirror and understanding we were not capable of executing where we needed to be.
I think what excites all of us, because I am excited about what you've done, and I think what everyone's doing, as we look at the strategy that Mike's outlined, I think every one of us are absolutely committed because we've gone through two years of fixing what we needed to and believe that we're on a foundation to really spring forward and to serve our customers and to deliver for our investors against some significant growth opportunities in the markets we've decided to compete. With our size, scale, global reach, when we look at the competitors in each market, I know all the GMs talked about them, but we all know them. We know who they are and who they're competing with, and we believe we will beat them and win and deliver for our customers and for our investors.
Thanks, because you guys are in the trenches day in and day out, delivering for us, for the team, for our customers. As we move forward, I know you're going to continue to raise the bar because you have been doing that consistently. I think it's important now to take everything the GMs have talked about, what the delivery team has talked about to validate we're ready to go, and now hear from Tim on the numbers, and I know that's exactly what the investor community is specifically looking for. How do these efforts now add up to numbers and deliver return on investment into NCR? With that, I'm going to turn it over to Tim and let him talk about some numbers. I'll join he and Mike shortly.
Hey, all. Welcome to the green set. All right, I've got the heavy lifting to do today. I've got really four goals for my presentation. The first is to give you some more granular information on all of the qualitative stuff that the business segment leaders just talked about. I also want to make your modeling efforts easier. Having just gone through getting to know this company myself, it's not always easy to understand what's going on inside of NCR. We want to make that easier for you as we go through today, providing some segment information below our segment reported segments. I want to make sure that you see a path to 80/60/20 that makes good sense and that makes you understand that this is not a hockey stick of a plan, but rather allows us to get there on a very methodical basis.
Lastly, I want to make sure that we give you the metrics necessary for us to continue to have the dialogue about whether or not we're performing and whether you agree or disagree with the valuation as we go forward. Before we go into the more strategic stuff, I do need to touch on the tactical, because first you're going to ask, and secondly, why use some very round numbers in the starting point for my presentation? When I do that, if you did some top-level math and used the bottom end of those ranges, you'd come to a conclusion on our fourth quarter results that would not be consistent with our expectations. Consistent with our guidance at the end of the last quarter, we still expect our fourth quarter to be very much like the third.
Very similar in every regard from a revenue perspective, from a mix of revenue perspective, from a profitability perspective, and even through to cash flow. The asset reviews and restructuring efforts that we talked about last quarter are still underway. Importantly, that $90 million of cost out that we talked about, that was, I think we said at least $90 million last we talked. That number now looks to be about $125 million-$150 million of cost out that will be out on a more permanent basis as we exit calendar 2020. As far as 2021 goes, we will not try to call the end of the pandemic. Others have, and we don't think it's the right thing to do. We're going to presume that things steadily improve from this quarter to the next quarter and the sequential quarter thereafter, much like we've called for the fourth.
We'll assume that that happens at least through the first half of next year. What we will do is work very hard to control those things we can control, like our spending levels and our ability to generate cash in a shortened cash cycle. This chart's a convention you're going to see a few times today. We're going to use it to describe each of our business segments as we go forward. I'll even dig a little deeper into a couple of segments as we go. From a top-level perspective, revenue growth over the next four-year period, from 2020 over to 2024, mid-single digits, about a 5% growth rate for the company in aggregate. That revenue when we get to the end, however, will be very different composition of revenue than it is currently. I'd argue a more valuable revenue mix.
In fact, because of that, the adjusted EBITDA margin will go from 14%, expand by six points to get to our 20% target. We believe that's attainable and should be sustainable, which is important. Notice too that 14% is relatively low coming off of a COVID year. That's a five-point expansion over our 2019 performance. The free cash flow, you've seen great performance in our third quarter. We've indicated that our full-year cash flow ought to be very powerful. We hope that all of the improvements we've made thus far will be sustainable. We'll continue to make further improvements to our free cash flow cycle, and I fully anticipate that as profitability increases, so will our free cash flow. Over this four-year period, we expect some $2 billion of cash we'll need to redeploy.
Lastly, you've heard a lot about our 80/60/20 mantra over the last couple of days. When we get this right, we'll hit that 80% target. Once we hit the 80%, the 60% becomes actually a short putt. We're likely to be above that 60%. You'll see today that the EBITDA margin ought to get close to 20%. About half of that improvement will come from good cost discipline and productivity from a manufacturing perspective. On the other half, a shift of our product set to higher value and higher profit revenue streams. Because we say 80/60/20 a lot of times, I think it's important to define what those are. The 80% is the percentage of our revenue that will not come from one-time hardware sales, meaning those that come from services and solutions, and really are higher profitability revenue streams.
The 60% represents revenue that has a predictable contractual agreement behind it that allows us to have sustained revenue over multiple years, so recurring revenue. The 20% is our EBITDA margin on an adjusted basis. The adjustments we intend to make and that we've made thus far are really just those that make it recurring and sustainable, so higher profitability. Let's go through the three segments. This chart is much like the one from two charts ago. I made three changes to this one. First, there's a yellow line on the page, and you'll see this in each of our segments. It represents the average margin rate for our company to allow you to know whether or not this segment has and will perform above or below the average of the company.
Secondly, I've put some gray boxes with green dots around them that show the allocation of a corporate cost layer to these businesses. When we talk about the profitability of a business, these are fully absorbed numbers. We pushed a lot of cost down into these units, and if you were going to do a sum of the parts analysis, you presume that some of that would, if not all of that, could go away. Finally, in the bottom left-hand side of each of the segment charts, we've added metrics to watch. We want to make sure that when we talk about the progress we're going to make against 80/60/20 and the progress we're going to make against this strategy, that you can gauge that based on our performance on these metrics. From a banking perspective, revenue up 4%.
You've got a digital banking business in there that's growing much quicker than that, we'll get to that. A hardware business in there that's relatively flat, then a very good services business in the middle that's going to grow just slightly higher than the company average. Taken all together, about a 4% growth rate. On the upper right, you can see EBITDA margin up five to six points, relatively similar to the rest of the company. Notice that this business is a very profitable business already. It's going to get more profitable over time, even though this business does contain the ATM hardware business that is not as profitable as the rest, and in fact, won't grow. About half of the total company improvement in EBITDA dollars will come from the banking segment over this period of time.
Inside of this segment, 40% will come from our improvement in digital banking, the growth in our Digital Banking business. 30% will come from our lean factory effort that Adrian just talked about, and another 30% will come from a product mix shift away from as software and services take over for the hardware business. I've added the Q3 year-to-date metrics in the bottom of this chart for the metrics to watch. We will continue to provide these on a quarterly basis as we go forward. As I said, digital banking is very crucial to the success of the banking unit. The registered users we've reported up 12% in each of the last two quarters, now at 24.3 million users. I think you heard that a couple times already today. Recurring revenue down to three decimal points. On the strategic execution, this business got an early start.
They were the first business to kick in the 80/60/20 effort. They've already moved a significant portion of their revenue stream into the software and services segment. They've got a head start. They've got a head start on the recurring, therefore as well. They will exceed the top end of each of those two revenue sets. Their margin rate, therefore, should, starting much closer to 20%, it will exceed 20% and expand by those five to six points. You've asked many times the mix of ATM hardware to software and services and ultimately to digital banking inside of this banking business, a very large banking business. We're breaking it out. Our digital banking business is, as you heard earlier today, a $500 million business. The other banking businesses, the software and services businesses that are sometimes attached to ATMs, sometimes not.
Those that are at the top of this page are less attached to the ATM, those at the bottom being more attached in the 15%-100% attachment rate, depending. Lastly, at the bottom of the page, the $900 million of ATM hardware sales. As I said, the attachment rate increases as you walk down the page, and the profitability rate decreases as you walk down the page. Not surprising, digital banking with the highest margins, software and services with margins relatively in the middle, still very good, and ATM hardware with the lowest. I'm going to take this one step further in the next slide.
If you look here, on the left-hand side of the page is our digital banking business at $500 million of revenue, and on the other side is everything else in banking to describe its growth, to break out digital banking from the rest. A 10%-15% growth rate on the $500 million is really about new clients getting more users and getting more share of wallet with every client we bring on board. Pretty compelling story and one that we started to execute against. On the bottom, you see our 28% EBITDA margin rate in this business already, and it should grow very nicely. In fact, even expand more quickly than the overall companies.
As we start to get scale in this business, as our product offering expands, we move into adjacent spaces, that should be more than enough to offset what I'd call some modest price pressure in that business. On the other half of the page, the remainder of the business is still a good business, $2.6 billion of revenue, 2%-4% growth rate. Remember that within here is the solutions and services business, that $1.7 billion, 2/3 of which is already recurring. It's a nice valuable revenue stream in there to offset the hardware, which will be relatively flat. From a profitability perspective, a 16% EBITDA margin currently growing at four to five points.
About half of that's going to come on the hardware side as we get more productive, you heard Adrian talk about reducing our physical plant to be appropriate to current levels of demand and to make sure that we continue to drive throughput yields and costs that are world-class. The other half is going to come from a mix shift away from hardware and towards solutions, services, and software. Let's talk about retail. The Retail business, growth of about 5% overall for this business as well. The SCO business, 8%-9% or 8%-10% growth in units. We're going to sell those on a different model, sometimes a subscription model. That growth rate that we just demonstrated in SCO might not be quite that high, but a very good backdrop for this business from the SCO perspective. We're going to convert lanes to platform lanes.
Those lanes therefore will bring more revenue with them when they come and more profit with them when they come. More lanes, more platform lanes, and more revenue per lane. When that happens on the right side of the page, profitability of this business must expand and will expand pretty dramatically from a 12% EBITDA margin rate today by five to seven points. Falling just below our goal of 20% for the company in aggregate, but a pretty remarkable change from where they are today. Two-thirds of that is going to come from changing our revenue mix and getting away from our current model and closer to the platform offering. About 1/3 of that improvement will come from productivity that Adrian will help us generate on the hardware side. On the bottom then, his metrics to watch aren't that different.
Platform lanes, that's about 1% of our total lanes are described there as platform lanes. That product offering is getting a lot of eyeballs on it currently. The conversions are starting to take hold. It ought to be a geometric rate of growth. When that happens, you'll see that platform lanes number tick up. With that, our ARPU should also rise. SCO revenue, because it's a hot topic currently, and because SCO revenue is growing nicely in aggregate, a very good demand backdrop. We'll call out SCO revenue, $642 million through three quarters, and his piece of recurring revenue. His 80/60/20 targets, he's not going to get all the way to 80% in this period of time. He's starting a little later. The demand in the SCO hardware business is going to keep that number from getting all the way to 80%.
Not a bad thing that with hardware sales are increasing. He'll fall a little bit short of his margin target, starting at a relatively low number. The hospitality business, a very high growth rate here, 8%-10%. Dirk told you about all the reasons why the number is low. We had a step down in revenue in this business that had more to do with market dynamics and COVID and having a product set that wasn't sufficiently competitive in 2018. We rebuilt that product. I'd argue that you're seeing a troughing here. I think COVID pulled forward that troughing, and that 8%-10% CAGR is one that Dirk feels good about. When that happens, and when he's bouncing off a fixed cost layer that's relatively high, you will see pretty rapid margin expansion, and you saw that, in fact, in the third quarter results.
He will almost double his margin rate over this period of time, taking, what is it, a 10% margin rate up to 20%. Right-sizing his cost structure, having come through a period of time in which we had to reinvest back into this product, we had to rework the way that we sold the product, and we had to rework the way that we went to market. Dirk now has the ability to get leverage off that cost structure and to grow his way out of it to deliver pretty powerful profitability. Volume and scale will help, and subscription pricing is going to help here a lot from a margin perspective. The bottom then, ask us quite frequently on the metrics to watch, asks us how many lanes have converted to the platform. In this case, we call the platform Aloha Essentials. That's a 3% conversion rate currently.
That's going to grow nicely and ask us about his recurring revenue. This business is very appropriate to our subscription model. We should see this business do well on the revenue metrics. When that happens, it pulls the EBITDA margin with it. You ask us about our payments business quite frequently, so we thought we'd break it out here. It is reflected in the financials of each of the two segments I just talked about in retail and hospitality. Here you can see this isn't a mix of how we recognize it in the P&L, but rather where the revenue comes from. About $100 million business currently. You'll remember that about 60% of that came with the acquisition of JetPay. The other was existing from our gateway business. $100 million business in 2020. We think this business will grow at 20% to 30% over time.
The color coding suggests that retail and hospitality transactions currently make up just a little bit less than half of the total payments revenue in our business today. The other being from non-NCR payment streams. As we go forward, the growth rate is going to skew very heavily to payments that we generate through our devices and our platforms. At the bottom of the page, we put an addressable market up there, NCR POS addressable market. That represents that $1.5 billion are payment streams that we currently control through our devices. They come through our customer set. While we won't capture all of those, that is the opportunity that we can go chase to fuel that 20%-30% growth rate.
I'm now going back up to the company level again. I'm going to do a couple of bridges here and help you think about how we think about the move from 2020- 2024. That move from $6.2 billion at the top of the page in revenue down to $7.4 billion at the bottom of the page, a $1.2 billion improvement. Each of these graphs is the same size, really the relativity of these bars is helpful, I think, in describing that improvement. Let's start on the left-hand side. Price, modest degradation in price across all of our product set. I don't think that'll surprise anyone. It's a competitive world. Organic volume and acquisition volume, there's a mixed trade-off here. I've let those bars overlap a little bit. I'm not sure where exactly that mix will come from.
If we invest more in acquisitions that bring revenue with them, then there'd be less we'd invest in our internal growth or organic growth and product set, and so they'd offset one another. Really strong organic growth, and we just discussed that, and very little, frankly, in the model with acquisitions. By segment, each of the segments contributes nicely here with our larger segments contributing more. That said, you notice that hospitality here punches above its weight and delivers really nice growth. Then by product, it shouldn't surprise you that hardware will be less than it was in 2024 than it is in 2020 overall, especially because we won't be selling hardware as a standalone entity much longer. Software business will grow nicely, and the services business similarly will do about 1/3 of our total growth over that period of time.
The shift to recurring revenue is a causal that we've used to describe our results for many quarters in a row. I think we've succeeded in confusing people as we've moved forward. I thought drawing a picture would help. My economics professors say, "Just draw the picture." I've drawn the picture here. In the yellow bars are the foregone revenue that we would have recognized in previous years under our old model of accelerating forward on a perpetual license all of the software and services associated with that sale. The green bars then is the cumulative effect of not recognizing those yellow bars, but rather allowing it to occur over time on a subscription basis.
As you can see, because these contracts tend to be about four years in duration, because we're legging into this change starting in 2018 and really growing at a geometric rate as we walked out the curve, you can see the crossover point for this becoming a drag on results to being a benefit to results is somewhere in late 2022. The impact actually starts to be relatively substantial in 2023, and when we get to 2024 and talk about the delta from where we are today to where we're going to be, it's a very important driver. The absence of the negative here is a very important driver of margin expansion. I suspect there'll be other efforts to convert to recurring as we think through ATM-as-a-Service or SCO as a service.
There may be other things that we do that change how these yellow and green bars look over time. I do think that that crossover point is the right one to think about. Thereafter, it might just reduce the upside. Another bridge, this one on EBITDA margin growth. Again, three ways to think about it. Also, the similar setup, those are scaled to the same size. Each of those green bars represent a relative change. Let's start on the cause side. From a cause perspective, our product mix shifts. Mix, let's say, away from hardware and toward digital banking, or towards subscription sales and away from our traditional model. Those will drive a substantial portion of our margin expansion. Let's call that the 80% metric in the 80/60/20. The 60% metric is the second one, that shift to recurring.
That shift to recurring is incredibly powerful. Not only from the previous page did you see that the headwind becomes a tailwind, but you also will see that it's a much more profitable product set mix. Lastly, productivity. I've mixed in this bar both the fixed productivity or the direct productivity and the indirect productivity. We've talked a lot about cost out. I'd argue that thus far in 2020, we focused on the indirect productivity and the cost I just described, $120 million-$150 million, is really focused at that. As we get into 2021, you heard Adrian say he's already right-sized his plant to a certain extent. We've got some more work to do to make sure that our expectations for future period demand are aligned with our underlying physical plant. That'll drive some direct productivity, I think, in the 2021 and beyond time period.
Those are both mixed into the total productivity bar, so an even split between a shift in our revenue set and our productivity efforts. From a segment perspective, much like it did on revenue, Hospitality's margin expansion and growth rate allows them to punch above their weight. The Retail business drives nice profitability expansion, and the Banking business contributes not as much as you'd think it would because of its size, and a lot of that coming from almost a third of that coming from the digital banking business. By product, services, software, and hardware, you might be surprised to see that the hardware business actually is contributing to margin expansion. I know that I talked about that. It's because we're going to manufacture more effectively and more efficiently with a continuous improvement culture. When we are profitable, we will generate a lot of cash.
The two yellow bars in this page are meant to represent the things we can control or influence. From a capital perspective, I've matched up depreciation amortization with CapEx at about $300 million each. Those numbers may not be exactly that. I think next year, we're trying to get our CapEx after many years in a row of spending beyond depreciation with CapEx, we're trying to get those more in line. We're certainly trying to scale the growth CapEx and not constrain it, but rather keep our maintenance and internal CapEx lower to allow more to go to growth.I'll describe on the next page the periods of time which we might allow the capital spending to go slightly higher than depreciation. From a working capital perspective, the improvements we've made in inventories and in receivables are sustainable.
We think that that $1.2 billion of revenue growth over the next couple of years can be funded with not very much of a draw on cash from a working capital perspective. We'll continue to work those things we can work. The rest, of course, we're more subject to interest expense and tax. There's a small burden here in disc ops, and I'll describe that in the next page. Cash generation, we're going to do it the old-fashioned way. We're going to make more money. Higher profitability will convert to cash, and it will describe the quality of that profitability. We will become more efficient on CapEx, and we will skew more heavily toward growth CapEx. Our cash cycle improvements we've delivered to date, we will sustain, and we'll go find some more, particularly on the inventory side, where I still think there's some opportunity.
Finally, we're going to get more linear in the way we go about our business. We are manufacturing now on a linear basis. A lot of the back-end loaded quarters and the back-end loaded years that you've seen from NCR in the past were somewhat self-inflicted. They're not helpful when it comes to a cash cycle. When we get more linear in the way that we sell and the way that we build and the way that we buy, it's going to make it a lot easier for us to generate cash flow in more quarters and not just a singular month of the year. On the other side of the page, then, is our redeployment priorities. I think these are well understood, and I don't think they've changed very much over time.
What I will tell you is we won't hit the high end of each of the ranges in the first two rows. The trade-off between organic growth and acquisitions is one that we think about quite frequently. Many of the acquisitions we think about are make-buy decisions. If we were to fund the growth externally, we might rein in CapEx internally. Similarly, if we don't find the acquisitions that we want, we will spend more to drive our own product development. We might overspend our depreciation, I'd say here, $0-$250 million over that period of time. Acquisitions, $600 million-$800 million. These are hard to predict. It's hard to time them. Sometimes they all come at once. Other times, the pipeline's relatively dry. It's often hard to align expectations for sellers with expectations for buyers, and they tend to come together seemingly all at once.
The pipeline remains strong. We're looking at a lot, and Mike has described in the past what we're looking for. The stock buyback, $100 million a year, has kind of been our pace and cadence to offset the dilution from compensation programs. We'll continue on that path. I've kept it a little bit higher here. I'm hopeful that we'll find some of the converts that we'll be able to buy back as well. I put that into that number. That's an opportunistic buy, and when they're available to us, we'd like to buy those back. I also called out two legacy uses of cash here. We will have to fund our underfunded pension over this period of time, I think to the tune of $300 million-$400 million. We're working hard on that to try and get that number lower.
Think about it being a use of cash over this period of time of $300 million-$400 million. Then discontinued operations, primarily an environmental use of cash between $100 million and $150 million. About $2 billion of cash to put to work, and we'll do so in a disciplined manner. The next chart is our debt stack. I'm not going to spend any time on this except to say we don't have any major refinancings to undertake until 2025. In 2024, we have the first date that our converts can be put back to us at the current stock price and the current coupon. I suspect no one will be willing to put them back. We'd like to take them back. The two dotted lines represent revolvers or asset-backed lines that ought to be very easy to roll forward.
In closing, 5% revenue growth, a very different mix of revenue growth, a very powerful and profitable mix of revenue, and hopefully more sustainable because of the sources that it comes from. From an EBITDA margin perspective, having pulled over then those new sources of revenue, a very profitable revenue mix, and a profitability stream that ought to be more sustainable and more repeatable. From a cash flow perspective, we'll generate a lot of it. We'll put it to really good use. Finally, when all is said and done, our 80/60/20 mantra, we'll have to change it because, Mike, we will have accomplished it. With that's my report. Over to you.
Thanks. Thanks, Tim. Great job digging into a little more detail, particularly around, as you call them, the sub-segments, giving a little more clarity on the sum of the parts. Owen, thanks for emceeing today. The roundtable that you just got done before Tim, that was phenomenal. I thought Adrian talking about how he's continuing to take out costs in the lean factory, high quality, but more efficiency to take out the costs. Listening to Tim, he looks like a software guy, but really phenomenal. Not becoming a software company, but we are a software company. We're able to deliver software. We're building software, and it's clear to see why with his leadership.
I tell you, listen to Mithu when he talk about what we do in Professional Services, which we don't always talk about, but how germane and how valuable we are in supporting our customers out there. That was a great session.
Yeah, I think that the level of discipline and focus in the company right now is pretty dramatic when you compare it to just two years ago. Like we keep saying, the customers are validating. I think your favorite expression is happy customers buy more, and that's what we're seeing, and I think that's why we have confidence going forward because the customer base is really validating that the actions taken by our leadership team are sustainable and have been impactful for them. It's great.
Yeah, that was great. The business unit session that you ran. Just going through and looking at where we are, you look at restaurants, the fact that we've got our product out there, we've addressed our customer sat issues, and Dirk's going to start growing next year. There's a great story around Aloha and the restaurant business. On the retail side, when you put in perspective the changes that we see as consumers and how that's going to drive a refresh cycle for the technology that the retailers have to use, I thought David did a great job of communicating and sharing how we are going to be positioned with our current installed base and the scale that we have to really participate and win in that upgrade cycle.
Then on the bank team, I'm a little surprised that Doug or Frank didn't call out the win that we announced yesterday with Wintrust.
Yeah, Wintrust, yeah.
A $44 billion bank holding company signed up for mobile, digital banking, and the Channel Services Platform to do all the integration with their brands, really transform their retail bank. I guess they're just a little humble or shy or.
I haven't seen that in that group. I think the point you're making, the competitiveness of those general managers and the whole team is really fun to watch, and they are out there competing. They each know who their competitors are. They each know who our investors are calling out in terms of players in each of the spaces, and they have the bit in their mouth. They're going to go out and beat and win in the marketplace. That's going to be fun to watch.
Yeah. A $44 billion bank, you don't pick those up every day. That was a great win for that whole team. We've got a slide up there for a number to call in with your questions. While you're signing on to that, I'm going to turn it over to Frank Martire, our Executive Chair at NCR, and just ask Frank to share a few words on behalf of our Board of Directors. Frank?
Thank you, Mike, and hello to everyone. Good morning to you. On behalf of the entire Board of Directors, I want to first thank Mike and his team for the excellent job that they've been doing and the fact that they positioned us so well for future growth. We have a commitment here to our vision, our strategy, and our culture, and they've executed on that, and that is much appreciated. That's the first point I wanted to make. The other is we've had significant progress in the last two and a half years, and this thanks once again to that team. We are again well-positioned for the future. Our board has been extremely engaged with the executive team.
We work closely with them, and we're very proud of the results we've gotten together and the job that's been done by Mike and, again, the management team and the entire organization. When we look at this, the strategy is clear, and it positions extremely well to maximize shareholder value. I want to thank you for taking the time to be with us today. We really appreciate that, and we very much appreciate the confidence you have in NCR. With that, I'm going to turn it back over to Mike for Q&A. Thank you.
Thanks, Frank. Thanks for joining us today at our NCR global headquarters here in Atlanta. Again, we wish you all could have joined us in person, but hopefully you got some value out of this virtual session. The goal today was to really give you a sense of the progress that we've made, the progress we've made becoming a software and services-led company, the progress we've made on moving our company forward. Most importantly, give you a sense of how the various sum of the parts at NCR really create a tremendous amount of value in the company. We firmly believe, Tim, Owen, myself, the whole team, that the sum of the parts, if you add it up, create a really compelling investment opportunity with the NCR brand, with the NCR company.
We think that because as you go through the components we laid out and you look at where we are vis-à-vis market, our competitors, other organizations out there that you might compass to, we are bigger in digital banking than Q2. We're the number one sales leader in global ATMs. We're the leader in global POS enterprise software, much larger, much more scale than a GK Software or a Lightspeed. We're the leader in self-checkout solutions, the hardware and the software to run self-checkout. We are the number one provider of restaurant POS technology to run the restaurant, bigger than Toast and PAR combined. When you look at what we do and where we're positioned for growth in retail and hospitality, we are attaching a payment transaction to everything that we do going forward.
We've made a tremendous amount of investments the last two years in our products that we use to run the restaurant, run the store, and run self-directed banking. We believe firmly we're on the right track to continue to grow to hit our goals of 80/60/20. Again, thank you for joining us today, and we'll start our Q&A promptly. All right. Well, so far, I think our live show went pretty well. A few transitions, people moving off to the two stages, but hopefully the message has come through as we've gone through this today. You've got the dial-in number. I hope this part works. We're going to open up the lines and give people a chance to ask us the questions, and we'll do the answers. With that, operator, if we can open up for the questions.
Thank you. If you would like to ask a question, please press star one. Our first question, we'll hear from Tim Willi with Wells Fargo.
Thank you. Good morning, Mike, Tim, and Owen. Great program. Thanks for putting this together. Great information. A couple questions across each of the businesses. Starting with digital banking, I'm curious now that you sort of clearly put this on a growth trajectory and moved it forward. There's a lot that's going on sort of in digital banking overall. We've got lending and we've got small business and B2B type stuff. How do you think about those opportunities now that you can really look forward on this business as opposed to sort of shoring it up as you have? Just a thought there. Then I got another one or two quick follow-ups.
Yeah. Thanks Tim. That's a great question because I think I mentioned it when I opened it and did a brief overview on banking. Digital banking really is retail banking. That's what we as consumers really think about today. I think what your question was referring to, so as you look at expanding the scope of some of the things that we offer, we've added small business banking. We've added some origination components. Whether it's lending or whether it's some more account opening technology, clearly, whether we build it out on the platform that we have, whether we partner or whether we look at some acquisitions, I think we definitely would be interested in continuing to expand, and really try to grow a share of wallet with each of those 24 million accounts that we have today.
Very great. One on self-service and then hospitality for the self-checkout and the retail channel. I know as consumers, we scan our things, we put the card in. It is sort of like a dumb machine, I guess, to the consumer in terms of how we experience it. Obviously large retailers, the front of the store is a very complex environment that is sort of pivotal to the customer experience, right? Nobody likes to stand in line. Everybody wants the machines to work and things of that nature. When you think about the value-added services that can come into the front of the store as self-checkout grows in your professional services organization, could you maybe talk a little bit about what that opportunity is as opposed to just putting machines in place, making sure they work and servicing them?
Are there data or services around the customer experience that you think enterprise is in?
Yeah. Tim, I think that's a great point. I know both Mithu and David talked about that. In the retail space, it is, in David's strategy, although it's a component, an appliance, a unit, a piece of hardware that sits at the front of the store. It really is the software and it's that user experience that differentiates what we can do for a customer that delivers to their end user. Mithu got up and talked about what we're doing in professional services, the ability to add that value, and it's pretty straightforward. If you're a retailer, a grocery store, and you're adding self-checkout for the first time, you don't have that expertise in how to do that.
Mithu can come in with people who have done this literally all over the world and help design the workflow, design the process, how do you do the lanes from self-checkout to assisted, and really help with that whole experience. I think that's an excellent point to make. It really ends up being the software and the service capability that we bring to bear that makes us different in that self-service model.
Great. My last one, and I'll hop back in the queue. I was curious, Tim, in your slide, you talk about pricing in one of the revenue bridges. I guess I could definitely see that in certain parts of the NCR enterprise. I'm curious in hospitality, with all that's gone on and the pivots you've helped restaurants make and the products and development that's gone on, if we just sort of look into that channel, staying away from checkout and ATM, is there an opportunity for yield enhancements?
I don't know if you want to call it price increase or just yield enhancement in that area where people really recognize probably more so than ever the value that you've brought into the organization in a very tenuous time to help them pivot, survive, and on the other side of this, probably thrive, as opposed to how they typically got the relationship they might have had with Aloha and NCR before the pandemic hit, maybe took it for granted. But now they realize you're a pretty trusted partner around stuff. I'm curious your thoughts.
I think that's exactly it.
In just that area.
It's the content that we're going to add that's much more profitable than the content that preceded it. When we start to sell differently, we sell the services and software as a solution to the customer, and we get away from just pure hardware sales. That's absolutely the way the business is going to move. You see on the retail chart, some pretty dramatic expansion in margin rate. That has everything to do with starting at a lower point because of a pretty precipitous decline in revenue. More importantly, as the revenue comes back, it's coming back in the right places. It's coming back as very value-add revenue, and it's coming back as recurring revenue.
Yeah, I think all the functionality that Dirk and his team have added during this period of time make us a far more attractive product set and make it far more likely that people adopt the entirety of his Essentials package.
Thanks very much for the investor day. Thank you.
We'll move to Dan Perlin with RBC Capital Markets.
Thanks, team, very much appreciate the details and the deep dive in and around the organization here. I just have a couple questions. The first one is when we look at the long-term financial objectives, the 5% CAGR and six points of margin expansion and so forth, should we expect all else equal, understanding we're not calling the pandemic's recovery or getting worse, but all else equal, should we expect that cadence growth to be similar to the cadence that you mapped out, Tim, around the recurring model slide? In other words, it's more linear, it's more gradual, but I'm just trying to understand how that cadence pace might look from here.
Right. I think if you look at that graphic, I think was on margin rate, and that is an important pacer of how much you improve margin rate. Really, about half of that margin improvement comes from cost out or cost efficiency. As we continue to grow, keeping our costs growing less quickly than revenue, that can happen earlier in the model, and that can support margin rate performance early on. The transition to recurring revenue that needs to take place in each of the retail and hospitality businesses, that's already well down the path and is getting good momentum on the banking side. That will come perhaps a little bit later. You saw that in my graphic, right? The switchover in late 2022 will give us some boost to margin rate there.
I'm anticipating relatively linear improvement in margin rate over that period of time, with the early going coming from cost efficiencies, and then later in the model, the shift to recurring revenue, more valuable revenue streams picking up the slack.
Okay. That's helpful. One of the things that was brought up today was ATM-as-a-Service. I know this is maybe not the focal point of the day, but I also want to understand how do you handle the carrying cost of the ATMs as you pivot that to an as-a-service model? It would seem as though there's got to be some sort of upfront cost that you guys would have to bear in order to put that into the model. I just have maybe a better understanding of how that gets recognized over the course of this horizon period.
Yeah, let me just start on that one, Dan, and then Tim could add a little color on some of the financing aspects. If you look at the chart that Shawn Phillips shared earlier, he did a great job of showing that one of the big benefits of doing ATM-as-a-Service or literally he talked about an outcome-based business where we're actually delivering a transaction on behalf of the client. We today participate in a portion, we think about 35%, maybe 40% of the total spend to deliver ATM transactions to the end customer of a bank or credit union. We do the hardware, we do the software, we do the break-fix services. If you start to expand that to the managed services, the help desk, you expand that to be managing the software, the software stack, the delivery, the CIT.
There's a whole other broad set of services, whether it's driving or switching transactions on the back end that we don't necessarily deliver today. When you start to move to a higher value service like ATM-as-a-Service, you expand that share wallet. I think Shawn's chart showed that it's about at least 2x in terms of total spend that we have access to then participate in, which we think could give us, A, it shifts it to a subscription-based business, but B, with a larger addressable market, could give us some growth in that market. That's part of what's going to happen with that business. As we look at growing that, obviously you're going to put some assets to work, and Tim's worked with the team on how do we fund or finance.
Yes, we had a meeting with Frank and his team to talk this through, the pricing model, as Mike just described, is so compelling that these things start to fund themselves after not too long. We're about two years into this model. Maybe we need to invest $40 million-$50 million on the balance sheet to carry those assets, ultimately, this thing starts to fund itself, it doesn't draw much cash after that. The other is as we start to have these machines be out there with much longer revenue streams against them, contractual revenue streams against them, they become very financiable assets. As they sit today, they're machines that aren't mildly entertaining and perform a function.
When they have a revenue stream against them and they throw off a predictable yield, in essence, I think they become very financiable, and whether we decide to just a business.
Yeah. No, that's a great model. One last thing real quick. It was also brought up earlier, the Aloha Essentials bundles kind of doubles the ARPU when you switch client service. Can you just help us bridge how that actually takes place and maybe some of the mechanics on that? Thank you all for coming on today. Really appreciate it.
All right. Thanks, Dan. Yeah. The Aloha bundle, what we do, Dirk did a great job of, I think Dirk uses a wall-to-wall or end-to-end delivery to a restaurant. You walk into a restaurant and literally every piece of technology wrapped all the software front and back, whether it's the hardware, we have the added advantage that we can deliver all the hardware you need, whether it's lane busting in the drive-throughs, whether it's a point of sale, whether it's at the table side and back into service in the kitchen. The unique benefit that we have is we can drive all that straight through with our technology. Other aspects of it that we may not do today, and we're starting to do more and more for restaurants, whether again, it's full turnkey service, whether it's helpdesk for a franchise chain that wants to have somebody.
Mithu and her team have gone out with chains to do a refresh and literally stamped out an exact copy at every single franchisee that they have. Not only the software, but the service model around that and the hardware model around that. That just starts to expand. I think Dirk would say we get maybe $0.35 on a dollar spent today in restaurants on average, if he can get $0.50, $0.60, $0.70 per dollar spent, that'll expand his ARPU. He continues to look at different products he can plug in, more services he can deliver. His goal is really straightforward, add more sites, and then increase share wallet for each site that we have.
Mike, the only thing I'd add to this, because we just touched on it with ATM- as- a-S ervice, the same is true with what David's doing on the retail side of the house. The product is aligned to meet that subscription-based offering to the marketplace. Behind the scenes, quite frankly, the ability to sell that, it's a completely different sale than a hardware transaction. We're out there essentially asking the restaurant, the retailer, the self-service bank owner to give us the technology responsibility. That's a different conversation. The GMs, Dan Campbell, who runs our sales organization, has completely rebuilt the sales organization to be able to go out and have those conversations to sell that value-add packaging offering.
As you touched on what Mithu is doing, we've got to be able to put all of that together out there and have the customer believe that they are getting incremental value. It's even beyond the sum of the parts. We're going to take that responsibility and are taking that responsibility. It's a different sell, a different implementation, a different support. When we talk about the last two years of getting the organization ready for this, it was not just the product architecting, it was getting all of the other pieces in place, and I think that's where we're very comfortable that we're moving in the right direction there.
Yeah, I think that's a great point. When you add a payment to all that, we make it a lot simpler for those restaurants to operate their business. They can focus on their business, and then quite frankly, make it easy for them. Right. So.
Next we'll move to Katy Huberty with Morgan Stanley.
Good morning. I think we all really appreciate the disclosure around growth segments, but you also spent time today talking through the benefits of selling outcomes that require multiple parts of the business, the benefits of shared services in a more centralized go-to market. I guess the question is it even possible to separate out parts of the business to unlock some of the parts? If the answer is yes, Mike, how long are you willing to give the team to execute and the market to more fairly value the business as a combined entity before you would consider any strategic alternatives?
Yeah, Katy, I think that's a great question. The whole team here is focused on as we do an annual strategy session with our board, and we have very detailed conversations with the board around how do we unlock value? How do we create value for our shareholders? I would just say, hopefully today you get a sense of the progress that we've made over the last couple of years. I think we use the words like we've fixed some of the components. I think Owen talked about we're in some cases in the starting gate now where we're turning them around. We turned digital banking around, digital banking is back to growth in 2020. We've turned the hospitality or the restaurant business around where it's going to get back to growth in 2021.
We've got a strategy and a game plan for the ATM footprint where we can get predictable revenue streams and make a margin off of that. We've got a great plan in the retail business which we think is going through an upgrade cycle where we've got a new product, a cloud-based product that we think is going to win in the market that's going to drive growth. I'd say versus two years ago, when we talked about a strategy and a vision, today, we have products in the market. We've realigned the business. We've gone back out to market in our go-to-market strategy and how we deliver products, how we sell, how we price them that we think will drive that growth we outlined today. I would say, I don't think we're going to have to do something. Would we be willing to do something?
We would entertain that, obviously, as the executives of the company if that made sense. I think we've got a great opportunity. We tried to share a little bit about how do we get leverage out of our infrastructure, how do we get leverage out of the team that Tim Vanderham has built on the software and the business services platform, the Channel Services Platform. The platform architecture, you get reusability. We get transactions going through. We start to get click fees. The more volume we can push, the more transaction fees we can get on those services. We talked about Professional Services and how that makes us different. We've talked about the scale and the scope of what we do in the lean factory.
I think we feel really good about being able to provide that transparency to the marketplace on the components but show you the overall value. Someday down the road, if we've delivered on all the things we've said today, rolled out the products, we're winning in the marketplace and we're growing and the market is not valuing us, we would sit back and say, we really need to look at how to do that. Right now, I think we're really confident that we're going to execute and the market will value us appropriately in the future.
That's great. Thank you. Just as a follow-up, Tim, it was explicitly said that hospitality would return to growth in 2021. Do you also see the potential to grow in the banking and retail businesses next year? Just as a follow-up for you, what would you say are the biggest risks or the sort of most difficult efforts in reaching the 2024 targets? Is it more so on the revenue side or profitability? Thanks.
Yeah. To answer your second question first, I do think that revenue is always the risk in a growth model in my mind. I know we can control our costs. I know we can generate cash.
I know that our shift toward more recurring revenue will occur, the question is how dramatic is the growth rate behind that? In some of the businesses where we're going to generate some productivity, volume always helps. It's kind of a two-fer if you can get that. We will control the cost. We'll drive cost hard. We'll wait for COVID to be over. I don't know if it's over next month or it's over six months from now, but we'll be ready for it when it gets here. On the retail side, the backdrop for retail is pretty positive as well. We certainly expect that business to grow at least as quickly as Dirk's business.
David has the wind at his back from a scope perspective, which will allow his hardware business to have a little vig here in the next several quarters, probably the next several years. He has the very same phenomenon behind his business around a transition to much more valuable revenue streams and a deeper relationship and a deeper financial model when it comes to our customer set. I think we showed that on that page, that he is going to grow well. His growth rate is a little bit above the company average in the model. Remember that the hardware is going to drive some of that early, I think as we get out beyond that, the growth will kind of level out at a nice level, but at more of a linear path, and the services will take off after that.
What about banking next year? Is there the potential to grow off of easier compares?
Yeah. Let's take it into three pieces. You've got the hardware business. We're not going to plan for ATM revenue to be up next year. A report we saw just the other day suggests others are starting to agree with us that this $900 million a year for us, or $220 million-$250 million a quarter of hardware sales are what we should expect, and we'll scale our operations, our manufacturing operations to that level to make sure we can and will be profitable at that level. I would expect profitability in ATMs to get better next year. Revenue will not be the driver. I think on digital banking, absolutely.
Remember that digital banking wins take a little while to come into the revenue stream, probably about nine months, and we do have some wins back in 2019 that we're starting to see now and some 2020 wins that'll help us in 2021. I expect that business to grow nicely as well. You've got this nice business in the middle of the software and services and banking that's big at $1.7 billion, that grows at a little bit like a GDP plus grower every year after year. It's there for us. The professional services revenue we can pull through there actually has accelerated during COVID as they need more of our help to make this transition to digital. Yeah, I do expect banking to have a good year next year.
To your point, the comps, particularly as we get into the second quarter, the month of April being an awful month, we ought to be able to post some decent increases.
Next, I'll move to Dan Kurnos with The Benchmark Company.
Great. Thanks. Good morning. Obviously, I echo everyone's sentiments around the detail and disclosure provided here. Very helpful. If I could just follow up on an earlier question on this obviously prevalent software-first theme and really focus on POS and hospitality. It obviously used to be a hardware-first. Hardware is the sticky component of the equation. Software, more portable, depending on who offers the best suite. Obviously, the conversation is still selling it in that way to a degree, give away the hardware, bundle the rest. Do you think the dynamics have changed there or that you can win with the software lead? How much does the payments attached help that argument?
Yeah. I think that whole business, and certainly in the SMB side of that business, is very much a software-led business. You win on feature function, and I think it's a service-led business. You win on ability to install, support, service those customers. I think the strategies that we have and that Dirk's outlined in terms of bundling into Aloha Essentials and then getting out in the market with our delivery and our support team is really right on. I think we've got other competitors who are doing that. Again, we have the capability to bundle the payments as well as what other people are doing. It's just simpler. If you're a small restaurant or you're a small chain, a five, 10, 15 restaurant grouping, a table service restaurant grouping, you want somebody to come in and just take care of everything for you.
You don't want four or five different vendors. We think that's the model. We think it starts with differentiating on the software product. We think the service is a big part of it, to be able to do all those components straight through with the payments, and then pick up the phone and take care of an issue. Yeah, we think that's where the market's going. As we said, we've made a lot of investments in that, not only the product, not only the software, but also in how we go to market, our ability to service, our ability to support our customers, the integration with payments. Going into 2020, we expect to start to get that growing again.
Great. If I could just follow up on my own question there. As you see more success with payments, do you consider going deeper down the capability stack or possibly cherry-picking one or more pieces of it to enhance your take rate? I guess maybe if I could just expand that to the service offering stack outside of payments and scopes and give a pretty good answer there already. Are there any particular areas you feel you could add to or do better in specifically that could augment growth beyond logo wins and wallet share expansion with your existing portfolio?
Yeah. Tim referenced our M&A, we talked about the level of spend that we might do on an annual basis. We put that on hold a little bit earlier this year when COVID hit. I think on the second quarter earnings call, we talked about getting back in the market and looking at companies. Tim referenced we have a pretty good pipeline. The simple way to answer that is if you think about our strategy to run a restaurant wall-to-wall or run a store wall-to-wall. We say run, we literally mean we want to make it easy for a restaurant owner or a store retailer to take care of their business and let us take care of the technology.
If you start to look at things we don't do today and whether we would partner and integrate and deliver that as a bundle or whether we would acquire and integrate a product or a service, clearly that's part of our roadmap going forward.
Next, we'll move to Ian Zaffino with Oppenheimer.
Great. Thank you. I just wanted to follow up on that last question. As you try to move more to as-a-service, I know you touched upon the smaller customers, but how does the discussion look with the larger financial institutions and then maybe also the larger hospitality customers as you try to do that, and also retail as well? What's the value proposition to them? How do they see it? Then also, just more broadly, maybe you could touch upon the IRR to you guys as a service.
All right. I do think that's a very good point. As-a-service or running the restaurant, running a store, running self-directed banking, if you're a community bank or credit union or even a regional player, you might have more applicability, more desire to use the leverage that we can bring to you. It's a leverage model where if you're a community bank, we can bring you the digital banking platform we bring you can't get any other way but to get a provider like an NCR that leverages that across 650 different institutions. Clearly, that market, and that's what we're seeing with ATM-as-a-Service, the community banks and the credit unions, they look at it and say, "Well, this is a much better way for me, make it easy for me, predictability and a much lower cost stream," as Shawn pointed out.
As we look at bigger ones, I'll ask Owen to share. We were a little surprised at some of the size of institutions that actually asked us specifically about that product over the last couple of years.
It is interesting because just staying with the financial industry right now, what we are seeing, we've been asked this question a lot relative to what's going on in the ATM space. As Mike said, digital banking is retail banking, and what we're seeing is investment from our customers into that platform to support digital, their branch, and their distribution through the ATM, ITM network. When I look at the transactions, whether it's for the PNC or U.S. Bank, and what they're investing in to put product platform in and who they're turning to for support in that effort, it's our software team, it's our professional services team, and those are long-standing engagements. They're not just one-time implementations. They're ongoing relationships relative to application management and outsourcing.
As we look at the solutions for our various industry groups, our entry points can be anywhere along the continuum, and what we're challenging our teams to do is to come in, find that entry point, make sure the full story's understood with our customers, and then move left or right along that continuum. We're getting a really strong receptivity. We mentioned Chipotle this morning a couple of different times. In the retail space with folks like Northgate and Bashas', they are clearly looking to us as a partner to outsource and do so on a sustained basis. We think the strategy's playing out, the as-a-service. Again, I go back, it's not just the software product, it's all the attendant capabilities behind it.
The IRRs are high. They have to be. It's a sticky revenue stream. It's recurring revenue. It's higher profitability by the nature of the relationship with the customer. The question for us is how do you make sure that it is a high IRR? You need to make sure you don't overpay for acquisitions. You need to make sure that if the outside world expects multiples that are too high, Tim Vanderham can go build it for us, and Tim will try to get it done as fast as he can. We have a nice trade-off there on IRR. We push back very hard sometimes on the valuations that we're seeing in the outside world, showing us some of that functionality. We always have the option to go do it internally. We know he can do it at reasonable cost.
Next, I'll move to Matt Summerville with D.A. Davidson.
Thanks. A couple questions. First, can you maybe talk about the payment side of the business, the $1.5 billion-$2.5 billion you highlighted earlier? If we think out looking out five years from now, what would you view as your target capture rate on that $1.5 billion-$2.5 billion? What's a realistic conversion there over to NCR?
Yeah, Matt, it's a great question. We tried to share a little bit about where we are with payments. If you recall, we entered in the payments about two years ago, and we bought a business that was really a card-not-present business, where it was mostly online payment. We actually liked the ability to do that, and which is actually going to work quite well for us now. Then we had to migrate and build out some of the capabilities to card present at a restaurant or at a store. Now we have the capability where it can be either, and we go talk. We're not going to try to compete on price. We're going to compete on the integration with our products, with our POS software, whether it's on a retailer or at a restaurant.
We're going to compete on the ability to take a payment, whether it's at the restaurant, at the table, as Dirk pointed out, or online. The real issue is not taking that payment, it's when something goes awry, the delivery arrives, and the food's incorrect, and you have to credit that back. We think our integration and the product suite that we've built out is going to be very much differentiated. When we go to market, we're going to sell that as a bundle. We try to give you a size and scale of the opportunity. That $1.5 billion-$2 billion we think is a pretty good estimate of the number of dollars that flow through our POSs. That's going to be a high margin business, and it's going to grow incrementally every year for us.
Or 12%- 15%. I know, I think-
Thank you.
...25%, there's a difference, right? On new customers, we expect the attachment rate to be very high. On our existing customers, the transition will be a little bit slower. When we hit the numbers Mike described, we'll beat the numbers on the page we gave you.
Got it. Then another follow-up for you, Tim. The $2 billion in free cash flow you talked about cumulatively generating over the planning horizon out to 2024, I want to be clear, does that include or exclude what you will need to put into pension and environmental-related-
That is gross. I included those two pieces for pension and for basically environmental on that page because we would have to take those out. We've not given up on getting the pension number lower, and we certainly hope that we'll be able to manage the discontinued ops number a little bit lower than that, but we will have to address those out of that $2 billion.
Next I'll move to Kartik Mehta with Northcoast Research.
Hi. Mike, I think you somewhat answered this question, but I just wanted to understand a little bit better. You talk about ATM-as-a-Service business, and I'm wondering what percentage of customers or dollar volume can get to that, because I'm assuming there'll be some large banks that will hesitate or not adopt that technology. I'm just wondering from your perspective, what percentage of the market do you think you can capture with that service?
Yeah. It's going to vary by geography. It's clearly going to vary by tier. In the U.S., going to get five or six really large-scale banks. They have the scale and the infrastructure. It's interesting because even at the very large banks, they look at some things they do and they say, "You guys might be able to do this better." We don't count on those as making that transition. The community banks, the credit unions on the very small side, we do think that's going to be the predominant marketplace going forward. You've got the regional banks in the middle, some which will look at this and say, "We know we have to offer the capabilities to do a transaction on a branded ATM, either at our branch or off-prem.
We may not want to do it because we think NCR can do it at a better cost structure." I think that market is going to start in the low end. I think it's going to move up to the midsize. We're seeing that in different parts of the world. Australia, we've seen that in parts of Europe. We started to see that where there's a preference to go to that. In some cases, starting with the off-prem ATMs, as a financial institution saying, "You take over my off-prem fleet of ATMs." It's going to be different by geography. It's certainly going to be more prevalent in the lower end of the market.
We look at that and we just say that's going to be, again, Tim pointed out, it's much more sticky, long-term subscription, and we think the margin in that's going to be stronger for us going forward.
Just Tim, you talked about the $125 million-$150 million run rate cost save. Of that, how much will be taken out in 2020? I guess what will be left in 2021?
All of that cost will be out by December 31 and it'll be built into my expectations for our businesses' budgets going into next year. As far as 2021 goes, we won't stop. There's plenty of productivity to be had. Our focus will shift away. I think that $125 million-$150 million is more associated with indirect costs, some overhead layers or indirect. You get into 2021, we ought to be able to go after the manufacturing footprint a little bit harder. Adrian's already spooled up some pretty good ideas, we'd be hopeful that we could generate yet more savings in 2021, we'll talk about those as we get there and start to plan for 2022.
Time plan. That is out by the end of this year. We said to the people you saw today, the business unit heads and the delivery teams, all our infrastructure teams, we said let's get the cost out in 2020. We started the year, we said we're going to take $90 million out. We ended up doing a little bit more. If you look at the impact to us on COVID, and where we think we're going to be in 2021, we just felt we needed to take a little bit more out. We said we're done at the end of this year. We want you to focus on growing next year. Everybody driving a business, everybody driving customer sat, focus on that. Tim's going to work with Adrian and the team on how do we get more efficient at our service delivery?
How do we get more efficient at our hardware cost structure? Everybody else is going to grow, focus on growth, focus on customer sat, and we've got a part of the team that's going to focus on taking out some additional costs in 2021.
Next we'll go to Paul Chung with JP Morgan.
Hi. Thanks for taking my question. Just on free cash flow, can you expand on how you've been able to smooth out seasonality there? If you could expand on collections improvement, manufacturing improvements, and anything you want to highlight. How have you been able to implement this so successfully this year after years of seeing a typical 4Q surge?
The beneficiary of the work that Owen did. I'll let Owen describe the cash control tower that was put in place in April or right at the outset of the pandemic.
Yeah. The cash control tower that Tim refers to is what we stood up, and it was really to look at cash preservation this year. I have to say, the work over the last 18 months, whether it was in the manufacturing environment, combined with the sales team, making sure that what we were doing was getting more tightly connected between pipeline opportunities, the manufacturing efficiency, the c oordination of the supply chain, et cetera. Working raw materials, working our finished goods, getting a better billing cycle. We're starting to see the recurring revenue allowing us to bill on a different basis.
All of those disciplines is really what has accumulated in the performance of free cash flow. As Tim points out, the collections, you can only collect receivables to some extent once. It's all the other things, what we've done with our suppliers, in terms of accounts payable and managing the entire working capital cycle. We're comfortable it's sustainable. The idea of how we were selling in the past, we had a lot of blue light specials on hardware. I think our customers were used to the idea that at the end of the quarter, if they held out, we would give them a discount.
If you saw what was happening in the manufacturing environment, then everything was getting built at the end of the quarter, everything was getting billed after the quarter. That discipline being cleaned up has allowed us to get to what we feel is going to be a much more linear rhythm to the business and obviously impacting the free cash flow then.
Yeah, a lot of that back-end loaded performance is self-inflicted, right? We lived that way, and it's hard to get off of that drug once you're on it. Once you've run really hard to the end of a quarter, you come into the next quarter and the coverage is dry and you've not inducted any of your production lines, and there's nothing to build because you're too busy collecting. We're breaking that pattern. We're not going to do the unnatural timing stuff any longer. We're going to make sure that we stay linear in everything that we do, and that we don't generate all of our cash in a singular month. Look, it doesn't do you any good if you get it all in one month. You still have to fund the deficit all year long. I'm very pleased with the linearity.
I'm very pleased with the process I picked up from Owen. It's great. We're down six days in our receivables in a singular year. In a year in which it should have been a lot tougher to collect money. Taken all together, you've got raw material inventories are down, Adrian's done a great job there. Our finished goods are down because we're manufacturing closer when our customers want to install their product. Everything's moving the right way. I think we'll still have some room next year in inventory. I think receivables days we can sustain the improvement. As you saw in our cash charts, we don't expect to have to use a lot of cash to fund that growth from a working capital perspective in the next several years.
That will conclude the question and answer session. At this time, I would like to turn the call back to Mike Hayford for any additional or closing remarks.
All right. I am going to invite the whole team up on stage here with us. Mike and Tim and Owen get to be the face. You saw a lot of the other managers. If I can ask them all to come back on stage. I think they did, and hopefully you agree, they did a phenomenal job of representing and sharing with you what NCR is all about, and literally how we deliver to our customers every day, how we focus on taking care of our customers, and how we are delivering products to the marketplace. Again, this looks like it is simple, right? Two and a half hour live show, but the whole team did a phenomenal job. Cameron, get up here. The whole team did a great job of making this happen. Appreciate everybody who was able to join us today.
Hopefully, you found a lot of the detail, a little more transparency, a little more visibility, and ultimately, it's about the progress that we've made, and quite frankly, it's really about the group behind us, the whole team here at NCR, and the commitment and drive that everybody shows each and every day to make this work. Again, thank you for joining us today.
Happy holidays.