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IBM in Major RFID Expansion

IBM said it would spend a quarter of a billion dollars over the next year and a half to grow its RFID business.

Big Blue launched Sensor and Actuator Solutions on Monday, a new division under the umbrella of its Pervasive Computing division. The company said this line of business grew 36 percent last year, generating more than $2.4 billion dollars in revenue in 2003. IBM said it sees the money as a strategic investment in a high-growth, emerging business opportunity.

The Sensor and Actuator Solutions group will take software that the services group has developed for individual clients and turn it into products.

"IBM now has a dedicated software group focused on developing software we can bring to different industries for-industry specific solutions," said Sean Campbell, the IBM Business Consulting Services executive responsible for leading RFID initiatives in the distribution sector.

"RFID represents a very good opportunity for IBM extends across all its lines of business," he said. IBM can profit from consulting with clients on how and when to roll out RFID, from selling them software and also by providing technicians from the Integrated Technology Services group to install and maintain the applications and hardware.

Sensor and Actuator Solutions plans to release new WebSphere-based RFID middleware product to collect, integrate and manage data obtained from RFID tags and readers from customers' distribution centers and stores before the end of the year. The goal is to eventually sell systems that can provide real-time virtual views of the complete shipping process, so that customers can pinpoint the exact location of goods at any stage of the journey from central warehouses to retailers' shelves.

Since launching its RFID division a year ago, IBM has made steady commitments to the industry. It's also used RFID technology to improve operational efficiency in the company's Fishkill, New York plant.

In July, IBM launched WebSphere Product Center, product management middleware that keeps track of the many different attributes of a particular product, everything from the color of its packaging to the standard weight to instructions for storage. The middleware works with an Oracle database to let businesses share product information with internal users and external customers, manufacturers, and suppliers.

In September, it launched a suite of RFID services targeted toward smaller enterprises and vertical sectors. The offerings are designed to be cheaper and easier to roll out.