IBM is ramping up its efforts to compete in the emerging market for products that communicate environmental data to IT systems for analysis -- which Big Blue says could represent a US$20 billion opportunity by 2007. These days there's a spotlight on radio frequency identification (RFID) technology, thanks to adoption mandates from retailers such as Wal-Mart, Best Buy and Albertsons that are working to incorporate the wireless tracking technology into their supply chains. But RFID isn't the only sensor-based technology in play, says Ann Breidenbach, director of product line management and business strategy for IBM's newly formed Sensors and Actuators business unit.
Defined broadly, sensors are devices, such as thermometers and pressure gauges, which detect conditions in the physical world. Actuators receive electrical signals from sensors and execute an action -- such as a valve or a switch that shuts itself off or makes an adjustment.
For decades, sensors and actuators have helped monitor industrial processes. The trouble is, such devices tend to be part of single-purpose, closed implementations such as a system that monitors whether a conveyer belt in a manufacturing facility is running properly, Breidenbach says.
The challenge is tapping that current data source and feeding it to enterprise applications so it can be used to help guide broader business decisions. "Existing sensor systems don't take information about a line and what's been produced and get it back to the enterprise so you can understand how the business is running," Breidenbach says. "The Sensors and Actuators business unit is about providing hardware, software and services to deliver that kind of information."
To that end, IBM is focusing its product development resources on middleware that handles everything from device management and data filtering to business-process integration and data analysis. IBM's multi-tiered approach includes embedded device software for basic data filtering and correlation, and higher-level, server-based middleware that gets sensor-generated data ready for business applications to absorb.
"It's important to move the data processing to the edge of a network," Breidenbach says. Not only does it cut down on network traffic, but it also reduces the load on enterprise applications -- which run on expensive servers, she says. "The more you move processing down the line to lower-cost devices, the better off you'll be," she says.
Among the first fruits of the new unit are three RFID-focused software products announced late last year and available now: WebSphere RFID Device Infrastructure, which reader manufacturers can embed in their devices; WebSphere RFID Premises Server, which monitors and manages RFID hardware and software in individual remote locations; and WebSphere Remote Server, which can be used to RFID-enable handheld, kiosk and self-checkout devices.
A key attribute of these products is remote manageability. RFID Premises Server, for example, bundles IBM's Tivoli systems management software -- along with its WebSphere application server, DB2 database software and WebSphere MQ messaging software and middleware -- so that companies can centrally manage deployments at remote locations such as in distribution centers. "Most companies don't have IT staff standing by at every dock door," Breidenbach says.
Royal Philips Electronics is using IBM's RFID middleware in a project designed to trace packages traveling between its semiconductor manufacturing facility in Kaoshiung, Taiwan, and distribution center in Hong Kong.
Likewise, IBM is using its own RFID middleware to streamline operations at its chip fabrication plant in Fishkill, N.Y. The company invested $2.5 billion to transform the chip fabrication factory, which now includes RFID-tagged containers for keeping tabs on inventory. Using RFID for tracking the expensive components has helped IBM realize higher manufacturing yields, and it provides flexibility to adjust more quickly to shifting production demands, according to Breidenbach.
The RFID opportunity
IBM has allotted $250 million over the next five years to develop, market and sell products for RFID and other sensor-based systems. But IBM isn't alone in eyeing RFID. All the major platform vendors are coming out with RFID-related products. Oracle last month announced an RFID-focused development partnership with Intel and plans to team with RFID appliance maker Xpaseo to develop a bundled device for managing RFID deployments.
At the same time Sun announced Java System RFID Software 2.0 - a new version of its RFID middleware, which features improved management tools and built-in provisioning capabilities for prioritizing key RFID-based processes.
Microsoft and SAP also have readied RFID wares to compete with smaller, specialist vendors such as OATSystems, ConnecTerra and GlobeRanger.
All these players are after what analysts say is a growing market for RFID technology. Global RFID hardware and software revenue grew from $1.25 billion in 2003 to $1.54 billion in 2004 and is projected to hit $1.94 billion this year, according to ABI Research.
The associated market for RFID consulting and implementation services is on the rise as RFID projects grow in scope and complexity -- which represents a huge opportunity for consulting businesses such as IBM's global services division. ABI Research projects the market for RFID-related integration services will surpass RFID product revenues by 2007.
Deploying RFID technology requires professionals who understand what it takes to get the equipment operating in the field, where physical conditions can be a lot different from those in a laboratory setting, Breidenbach says. Consulting services will become increasingly important as companies look for RFID opportunities beyond simple dock-door receiving scenarios, she says.
IBM is working with companies that are looking to expand RFID deployments outside of tagging pallets of goods. Food traceability is one example, Breidenbach says.
Hospitals also are using RFID to keep track of assets such as crash carts and wheelchairs, and automotive companies are using RFID to track the whereabouts of cars after they arrive from overseas and before they make it to dealer locations, she says. "There are quite a few different use cases beyond shipping pallets of cereal," Breidenbach says. -- Network World (US)
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