Hewlett-Packard Co., one of the “initial eight” product distributors in the Wal-Mart RFID trials, will unveil on Monday pacts with systems integrator BearingPoint Inc. and RFID software specialist OATSystems Inc.
The moves signal big changes in HPs strategy as an RFID vendor, according to Frank Lanza, worldwide director of RFID for HP Services. Under the two deals, to be talked up further at this weeks EPCglobal show, HP will work with both BearingPoint and OATSystems to bring RFID solutions to market in the retail supply chain space, Lanza said in an interview with eWEEK.com.
“Weve concluded that we dont want to become famous for everything in RFID,” Lanza added.
HPs 65,000-person services business has been looking at which vertical areas to target in RFID, he said. Two years ago, HP began to build up an RFID practice among its hundreds of customers in the manufacturing arena. The early users include toy maker Hasbro Inc. and Conros Inc., producer of Citronella candles.
“[But] weve decided not to build significant domain expertise in the retail supply chain,” Lanza said. Instead of going it alone in this market segment, HP will work with BearingPoint and OAT.
Meanwhile, outside these partnerships, HP will focus on furthering its existing RFID domain expertise in manufacturing, as well as in related areas such as the automotive and oil and gas exploration markets, he said.
When it comes to the BearingPoint and OAT deals, HP will bring its “global reach” and underlying technology and services infrastructure to the partnership equation, along with a large installed base of retail customers for various products and services.
“As weve talked with retail customers, theyve asked us for a go-to-market strategy that will combine robust [RFID] software with end-to-end services,” Lanza said.
In terms of infrastructure, HPs contributions will range from HP OpenView management software to Microsoft Windows- and Unix-based server hardware, HP StorageWorks technology, and services such as Life Cycle Management, HP Managed Services and RFID Integration Services.
RFID challenges, benefits and applications can vary tremendously among various vertical markets, analysts agree.
In the auto industry, for example, users will be implementing RFID throughout the entire product lifecycle, from manufacturing, through the sales showroom and ultimately through disposal of auto parts when its time for the car to leave the road, said Bruce Hudson, an analyst at the Meta Group.
Erik Michaelsen, an analyst at ABI Research, characterized the auto industrys use of RFID as a “closed loop,” meaning that a single company is in control all along the way. In contrast, use of RFID among retailers and their product distributors is an “open loop” situation, he said.
OATSystems and BearingPoint arent limiting themselves to the retail RFID market, either. A solution now being co-developed by HP and OAT—RFID/IS (Industrial Strength) —is geared to the retail CPG (consumer packaged goods) markets, as well as to consumer electronics, high tech, pharmaceutical and automotive customers.
IBM Global Services is HPs main competitor in RFID, according to Lanza. The deals with BearingPoint and OAT each represent an extension of an existing relationship with HP.
“OATs software takes data from RFID readers and brings it upward in a manner that lets you deal with it in a structured way,” Lanza said.
“[BearingPoint] has great expertise in how to use RFID in the retail supply chain for dealing with inventory reduction and out of stock situations.”
For OAT, the partnership with HP is a key ingredient in an alliance strategy that also includes large retailers, according to Marc Osofsky, OATSystems vice president for marketing and product management.
HP has already been using OATs RFID framework software internally, Osofsky told eWEEK.com.
“HP has firsthand pain and lessons learned from Wal-Mart,” observed Brian Higgins, BearingPoints director of global RFID solutions, in another interview.
HP became involved as an early Wal-Mart RFID tester through its role as a huge supplier of PCs and consumer electronics to Wal-Mart.
Higgins said that BearingPoints RFID consulting and integration practice consists of two divisions. One of them focuses on “custom” RFID work. The other is creating RFID solutions for compliance with mandates from Wal-Mart, the U.S. Department of Defense and other big users. For this division, leveraging the potential for cost efficiencies is an important goal.
“In the CPG industry, RFID is an entirely different ballgame from barcode track and trace,” Higgins pointed out.
BearingPoint is now working on issues ranging from quicker capture of POS (point-of-sale) data to “item-level serialization,” an application aimed at breaking down products from the same SKU into more granular categories, for more effective sales forecasting and demand planning.
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