May 02, 2014Fujitsu UK & Ireland (UK&I), the IT systems arm of global electronics firm Fujitsu, has acquired Texas RFID software and solutions provider GlobeRanger. Fujitsu UK&I develops and sells IT services to defense agencies and their suppliers worldwide. The acquisition, announced today, will grant Fujitsu access to market RFID-based solutions to the U.S. Department of Defense (DOD) and its suppliers, and bolster what the company calls its Global Defence Initiative.
GlobeRanger has developed a relationship with the DOD, based on the solutions it has provided, while a company that lacks such a relationship is less likely to be selected for contracts. Fujitsu has established relationships with defense agencies and contractors in Japan, and, through acquisitions, has acquired similar relationships in the United Kingdom and Australia. Fujitsu UK&I's RFID-based solutions, which will include GlobeRanger's iMotion Edgeware platform, will target maintenance, repair and overhaul (MRO) operations, as well as supply chain logistics.
The two companies have declined to divulge the terms of the sale. Prior to its purchase by Fujitsu, GlobeRanger was privately owned, with stakes held by several venture capital firms, including Sevin Rosen Funds, CenterPoint Ventures and HO2 Partners.
For GlobeRanger, the acquisition means the backing of a firm with considerable resources, and the potential to expand its Edgeware offerings beyond the U.S. market. The company, founded in 1999, will continue to operate under the same name, out of its Richardson, Texas, office, but is expected to grow during the next 12 months, according to Eric Bownes, Fujitsu UK&I's global defense solutions strategy and logistics lead. Bownes will be largely stationed at the Texas site for the next year, in order to oversee the transition.
Fujitsu's defense solutions team operates primarily out of the company's U.K. and Ireland offices, though Fujitsu UK&I also provides IT services to customers in the commercial and industrial sectors. Fujitsu has become one of the primary businesses selling defense-based IT solutions worldwide, with $1.5 billion in reported sales annually, serving the European and Asian markets. But the company lacked a presence in the United States, where the DOD and its contractors represent 40 percent of the worldwide market for all defense equipment costs, including aircraft, tanks and other equipment, as well as MRO and logistics. "For us," Bownes explains, "that is 40 percent of the global market we never touched."
GlobeRanger is a leading supplier of RFID edgeware and solutions for the DOD and its suppliers, as well as other customers in the health-care, logistics and perishable-products sectors. The company's iMotion platform enables its customers to manage passive ultrahigh-frequency (UHF) RFID readers, and to manage and process the culled data. For the past three months, it has been partnering with Fujitsu by providing its iMotion Edgeware to power new Fujitsu software, which Fujitsu exhibited last month at the RFID Journal LIVE! 2014 conference and exhibition, held in Orlando, Fla. George Brody, GlobeRanger's founder, CEO and president, indicates Fujitsu and GlobeRanger received considerable interest in the RFID-based product from DOD contractors and other companies.
With the acquisition, GlobeRanger's staff of less than 20 employees—primarily engineers and other technical staff—will continue to operate out of the Richardson office. GlobeRanger will become a branded division of Fujitsu, and intends to continue serving the same customers, though it may opt to expand its offerings to include technology provided by Fujitsu, such as RFID tags and integration services.
The long-term plan, Brody says, will be to expand GlobeRanger's products beyond the United States, to include solutions for other countries' defense agencies and their suppliers around the world, through the relationship with Fujitsu. What's more, Bownes adds, since Fujitsu UK & Ireland also offers IT-based services for the commercial and industrial sectors worldwide, iMotion Edgeware could also serve these markets.
However, Bownes notes, with the defense initiative, Fujitsu's focus is on MRO solutions to enable the management of data related to the servicing of defense-based assets. He cites the example of the Joint Strike Fighter (JSF) program, aimed at replacing existing fighter, strike and ground attack aircraft for the United States, the United Kingdom, Canada and Australia. Much of the expense of replacing these assets, he says, will include ensuring accurate data regarding the logistics, maintenance and repair services for the new equipment—which, he adds, will ultimately drive down the entire program's cost.
"It is about managing the life, usage and health of all military assets against operational plans that ensure you drive down the number of spares in the supply chain," Bownes states, "and have only the necessary stock to execute the maintenance activities required for operational needs." By employing RFID-based data management, he says, users can ensure that they do not overstock, while improving the reliability of items in order to reduce the number of MRO activities required.
GlobeRanger's customers, Brody says, can now expect to gain solutions that include hardware and integration, rather than merely its Edgeware platform. "We will continue to sell to the DOD [and its suppliers]," he states, "but now, with the power of a $46 billion company behind us, now we will be able to augment our services with these significant resources."
For the radio frequency identification market, Brody says, the acquisition indicates the value that the technology is bringing to end users. "With a big player like Fujitsu getting focused in RFID solutions," he notes, "this will make the RFID market very relevant."
