IBM Invests $250M in RFID

The company looks to fend off competition from the likes of Microsoft and Sun with a new RFID division.

IBM announced Monday a $250 million investment in RFID (radio frequency identification), an emerging technology that is being mandated by the likes of Wal-Mart Stores Inc. and the Department of Defense, but that has seen little adoption elsewhere.

IBM has created a new RFID division, Sensor and Actuator Solutions, and has committed to amassing a team of about 1,000 people to work on consulting, new software development, marketing and implementations, according to Robert Mayberry, vice president of the IBM Sensor and Actuator unit.

The Sensor and Actuator organization will become part of IBMs Pervasive Computing business.

At the same time, IBM announced the availability of a new middleware product that supports RFID. The new offering, based on IBMs WebSphere middleware stack, will be used to read different types of RFID readers—it can be embedded in different types of controllers to collect data from various RFID readers and tags—and to manage RFID data. It also integrates RFID data into backend systems.

Due in the fourth quarter, IBMs RFID middleware will enable users to essentially collect, integrate and manage data collected from tags and readers located at customers distribution centers and stores, and serve as a domain where that information can be managed and integrated.

"Were focused on bridging and integrating the devices that are in the physical works, back to the IT world," said Mayberry, in Somers, N.Y. "This integration is about taking data from sensors—the proliferation of sensors are doing quite a bit of work."

Once the information is gathered at the sensor level, its passed back to the enterprise in various stages. An Edge Server acts essentially as a controller that detects signals coming from the RFID tags, and then filters and aggregates the readings and maps to the RFID case. At the same time, a Premise Server collects data that is read by the Edge Server and interfaces with the WebSphere Business Integration Server—an area where IBM sees development opportunities.

"Were looking to change business processes in real time, using WBI to transform the business by rewriting business based on real-time demand," said Mayberry.

/zimages/6/28571.gifClick here to read about how RFID testing is going at a Wal-Mart store in Texas.

The Sensor and Actuator Unit will focus on the "edge to the enterprise," Mayberry said. Within that domain, it will hone in on the retail, consumer products, government, pharmaceutical and industrial automation vertical markets to provide visibility into the supply chain through access to RFID data.

To this end, IBM is also investing in three RFID test centers located in Japan, France and the United States, in Gaithersburg, Md. The company is also leveraging its vast partner network to build out solutions around RFID. To date, it has partnered with five of the major reader vendors, nearly a half-dozen application ISV partners and a number of regional system integrators in an effort to build an open-standards based wireless ecosystem, according to Mayberry.

IBM is fending off competition in the emerging RFID arena from some of the bigger players in the software industry, including SAP AG, Microsoft Corp., Sun Microsystems Inc., Hewlett-Packard Co. and Oracle Corp.

/zimages/6/28571.gifClick here to read about Suns RFID middleware plans.

"You name the large ones, and theyre making a play in the RFID arena," said Mayberry, who believes that IBM has the lead since it is able to bridge the gap between the physical realm and users backend systems.

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