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Cheap, Easy RFID? 2

Microsoft prepares to enter the radio-frequency ID market by tuning its products and collaborating with partners. Will its low-cost model change the stakes?
Microsoft is gearing up for more than a dozen RFID trials. A pilot project with Dutch snack maker KiMs, under way since December, gives a clue about some of the technology pieces Microsoft will incorporate in its RFID environment. They include an application called Demand Planner, based on the Excel spreadsheet, that applies real-time data to sales forecasts, and a notification system that fires off messages within supply-chain environments.

Microsoft's business applications will require BizTalk Server to do some of the work. Flessner characterizes BizTalk Server's role as providing "high-level integration" between an RFID reader and enterprise applications, including those from other software companies.

chart Arthur Schuman operates an 87,000-square-foot refrigerated warehouse in Edison, N.J., where 50,000-pound containers of pecorino and feta cheeses are unloaded 24 hours a day. It's the kind of facility that could benefit from RFID's promised efficiencies, but Lehoullier says he has yet to come across a workable solution for a midsize company. "It's got to be easy to use, it's got to integrate directly into the ERP system, it's got to fulfill Wal-Mart's mandate, and it's got to have some ROI," Lehoullier says. As a Great Plains user, Lehoullier would like Microsoft to help. "They know there are a lot of people out there like me."

Microsoft isn't alone in going after that business. This week, IBM will unveil an enhanced Websphere Product Center that, among other things, will let companies more easily associate data generated by RFID readers with product data stored in enterprise databases. Lyle Ginsburg, a partner with Accenture, believes the entrance of big players such as IBM and Microsoft should help drive down costs. "Companies want a low-cost, shrink-wrapped platform," he says. That "will play right into Microsoft."

But Microsoft's RFID strategy hasn't been without wrinkles. According to a confidential Microsoft document that became public in the ongoing Justice Department v. Oracle trial, Microsoft had planned to add RFID support to its Retail Management System applications in 2006. However, Microsoft's Nadella was noncommittal when asked about that. "RFID at the small retailer [level] is not where it's happening today," he says. "My priority is supply chains." And the time line to add RFID to the Navision applications seems to have slipped. Microsoft originally planned to deliver that next year, according to the same document.

Systems integrator Altara has helped midsize companies such as Arthur Schuman and Sleep Innovations Inc., a pillow manufacturer, deploy ERP systems using Microsoft products. Altara CEO Helene Cole says there's pent-up demand in the midmarket for no-fuss, end-to-end RFID infrastructures, and Microsoft is in a good position to deliver that. "We're finding that $30 million distributors and manufacturers have the same needs as everybody else," Cole says. "What Microsoft will do is make it easy to implement."

That's the plan, anyway. Now it's up to Microsoft to make it happen.

-- with Paul McDougall