September 30, 2004, 12:00 AM

RFID isn’t just for big companies, as vendors target smaller players

While RFID is still mostly associated with major retailers like Wal-Mart, Target and Best Buy, RFID vendors are expanding their offerings for smaller companies, says Dwight Klappich, RFID analyst at Meta Group.

When Wal-Mart Stores Inc. talks about its plans for RFID, other retailers as well as suppliers are all ears. Everyone seems to accept that Wal-Mart`s lead will sooner or later become the industry norm in tracking the movement of goods into retail stores.

But while RFID is still mostly associated with efforts of major retailers like Wal-Mart, Target Corp. and Best Buy Co. Inc., RFID vendors are expanding their offerings for smaller companies, says Dwight Klappich, vice president and RFID analyst at research and analysis firm Meta Group.

RFID, or radio frequency identification, uses a system of RFID tags and readers to identify and track over the Internet the movement of goods throughout supplier-to-retailer supply chains. Although still in pilot stages at major retailers, technology providers are expanding their RFID offerings to mid-market companies, Klappich says.

For example, SSA Global launched recently its SSA RFID for Distribution as the first of several applications for RFID-supported warehouse management, an area where RFID can bring near-term value in tracking assets, Klappich says. "As RFID starts to move down to the mid-market, SSA will be in a good position to help companies meet these mandates," he says.

Other companies expanding their RFID offerings that will integrate RFID systems with applications like warehouse management include such major vendors as IBM Corp., Oracle Corp., SAP AG and Peoplesoft Inc., Klappich says.

Forrester Research Inc. reports that, as RFID projects move beyond the initial mandates set by Wal-Mart and others for major suppliers to ship all cases and pallets with RFID tags, market demand will grow among different sizes of companies for RFID middleware products that help integrate RFID data with applications like warehouse management.

Forrester recently evaluated RFID applications from 13 vendors. It cites Manhattan Associates, OATSystems Inc.and SAP as the leaders in providing systems designed to meet initial mandates to deploy networks of RFID readers that can detect and compile product information transmitted by RFID tags on pallets and cases.

Forrester cites SAP also as a leading provider of complex middleware for long-term RFID projects that can integrate RFID data with a company`s back-end applications like inventory management. It adds that IBM and Oracle offer flexible, multi-tiered middleware architectures for supporting broad RFID deployments.

IBM`s Middleware Solutions for Retail software suite, "makes it easier to integrate RFID data with enterprise applications," says Meta Group vice president and retail analyst Gene Alvarez.

Although IBM`s prices for large-company middleware packages start at about $200,000, IBM offers an Express version for small companies starting at about $30,000, according to Pamela Kym, segment manager for the retail industry at IBM Software Group.

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