Microsoft Plans RFID Software

Microsoft (Nasdaq: MSFT) is looking to slap its name on radio frequency identification (RFID) with new software that is designed to help companies manage the bar-code replacement technology, the software giant announced this week.

Microsoft RFID manager Alex Renz said the company is planning a middleware product, set for release in about a year, that joins RFID hardware with business-planning and management software to make the information more useful to customers. Many are in no hurry to adopt RFID technology, but some are being forced to do so by larger retailers such as Wal-Mart.

Microsoft said its software, which will be built on its .NET platform and run on two-processor servers, will integrate RFID data with its SQL server database software. The company, which did not announce pricing for the software, enters a highly competitive market for the software that will go along with RFID technology, which is used for supply chain, inventory, tracking and other purposes.

Readying for RFID

Microsoft has devoted significant resources to both RFID hardware and software, joining other vendors such as IBM (NYSE: IBM), Oracle (Nasdaq: ORCL) and SAP (NYSE: SAP) in the race to supply retailers large and small with the technology.

Yankee Group senior analyst Laura DiDio said suppliers looking to cut costs are somewhat resistant to RFID -- typically limiting their adoption of the technology to what is required by retailers such as Wal-Mart.

"People do not want to make changes unless absolutely necessary because it's disruptive, it's costly, and it's time-consuming," DiDio told TechNewsWorld.

The analyst said that while RFID will not be a major focus for Microsoft, the software giant wants to plant a flag in the field. "It's not going to be a first, primary line of business for them, but they're going to say, 'We're here,'" DiDio said.

Database Decision

DiDio called Microsoft's planned RFID middleware "more of a management product" and said the company was also signaling to .NET developers that it had an RFID strategy and platform for them.

Microsoft's announced support for multiple platforms and links to SQL Server indicate the RFID software is also an effort to stem losses in the database market, according to DiDio.

"The fact that they're talking about it being embedded Windows and working with SQL -- that's really a bid to stave off their rivals in the database area," she said.

DiDio said Microsoft is part of a crowded market in RFID that has included a partnership between SAP and Intermec.

"There are a lot of people who are in this market," DiDio said. "Microsoft, Oracle, IBM, SAP -- they all have the economies of scale."

Chipping at Challenges

AMR Research senior analyst Kara Romanow said that although new RFID technology and tracking holds great promise for retailers and others, there are still barriers to overcome.

Romanow told TechNewsWorld that the cost of RFID tags or chips, accuracy of RFID reading, and lack of standards are all limiting the advantages of RFID.

The market for RFID technology, however, is expected to top US$3 billion by 2009, and companies are realizing the potential efficiency gains and cost savings of a complete RFID solution.

"To track exactly where something is in the supply chain, all the way to store shelves -- that kind of information is revolutionary," she said.