The Business Case For An Internet Refrigerator

Internet refrigerators were a joke a few years ago, but RFID startup Blue Vector Systems says that it's finding real customers for them. The concept is similar to the vision of household appliances that automatically reorder groceries, only aimed at enterprise supply chains instead of home kitchens.

In addition to RFID, the refrigerator contains temperature and door sensors, plus a small box that Blue Vector calls an Edge Manager and which houses its core technology. Using input from the reader and the sensors, the box  inventories the refrigerator's contents automatically. It ensures that everything is kept fresh by sounding alarms and generating alerts when the door is open or refrigerated items get too hot or too old. The box also can be hooked up to a display that tells people opening the door which items are closest to their expiration date.

The system is based on active (battery-powered) tags that cost about $10 each, which means it's only really cost-effective for monitoring very high-value items. The only customers so far are in the medical industry, where it's used to keep track of clotting agents, blood, and other medical supplies priced at upwards of $200 per dose. It's sold as a service through ASD Healthcare, a division of drug distributor AmerisourceBergen, which has installed the system in more than 50 hospitals and clinics.

So is this kind of system more generally applicable? Blue Vector thinks it is, as the Edge Manager also can work with cheaper (10-cent) passive RFID tags  and other kinds of sensors. It combines application offload (a bit like an XML accelerator) with RFID management (a bit like a wireless switch, only for RFID instead of Wi-Fi), aiming to both gather data and act on it. Founded in 2002, the company has about 15 other customers, most of whom use the Edge Manager in loading docks, conveyor-belt portals, or warehouse shelves.

There are other venture-funded startups making RFID management boxes. The most well-known is Reva Systems, a 3-year-old company that has raised at least $20 million from Cisco Systems and SAP in addition to VC firms. Cisco's interest in the space is fairly obvious: It wants to move applications off servers, so networked boxes that gather information and act on it are a good fit. Though Cisco already has some products of its own in that area, Reva is mostly focused on the RFID management part.

Blue Vector's closest competitor is probably Omnitrol, another RFID and sensor vendor founded about the same time. It seeks to do even more, with a box that can manage Wi-Fi access points as well as RFID networks and sensors. The biggest difference between them is that Omnitrol builds all its intelligence into a single box aimed at the data center, while Blue Vector's is distributed among smaller devices that can be embedded inside other things.

The big question for all three is whether item-level tagging will spread beyond very high-value products. RFID adoption has been slower than most in the industry predicted, with much of it driven by regulatory or supplier mandates. The refrigerators are an exception: They aren't required by the FDA, and ASD sells them based on their potential to lower costs and improve reliability. But is there a place for similar technology elsewhere?Internet refrigerators were a joke a few years ago, but RFID startup Blue Vector Systems says that it's finding real customers for them. The concept is similar to the vision of household appliances that automatically reorder groceries, only aimed at enterprise supply chains instead of home kitchens.