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BEA Systems Acquires ConnecTerra

The companies say their combined offerings will enable end users to deploy large-scale RFID systems.
By Mary Catherine O'Connor
Oct 12, 2005Enterprise and application infrastructure software provider BEA Systems has acquired ConnecTerra, a Cambridge, Mass., company that sells RFID device management and EPC data processing software. BEA says it is offering jobs to most of ConnecTerra's 28 employees, but the latter's Cambridge office will close and the remaining employees will work out of a BEA office in Burlington, Mass. The acquisition is final, but no financial information has yet been disclosed.

BEA Systems' chief marketing officer, Marge Breya, says her company views RFID as one of the next killer apps many BEA customers are deploying, and that ConnecTerra is a leader in the RFID software space. "The timing for this [acquisition] couldn't be better," she states, "because many companies are in pilot mode for RFID" and ready to start deploying the technology on a larger scale. BEA Systems' WebLogic enterprise application platform can support RFID systems.

The combined strengths of ConnecTerra and BEA Systems could benefit companies with large-scale RFID deployments across a number of locations, says Jeff Flammer, director of solutions marketing for BEA Systems.

The exciting aspect to BEA Systems' capabilities, says David Douglas, ConnecTerra's executive vice president of products and strategy, is that they address the scalability, manageability and security concerns most RFID end users have. "These are the issues that companies are facing as they move from using RFID in a few stores to hundreds of stores, or from tagging just a few items to many of their items," he says.

Both ConnecTerra and BEA Systems, Flammer says, also put a lot of focus on industry standards. BEA focuses on standards development based on Sun Microsystems' Java 2 Platform, Enterprise Edition (known also as J2EE) technology, while ConnecTerra is active in developing EPC data and software standards for EPCglobal. "By combining companies, we think we've created a standards leader [in RFID], and this will result in investment protection for customers," he says.

"We're very encouraged by the product momentum that ConnecTerra currently has in the marketplace," says Flammer. BEA Systems will begin selling three ConnecTerra products—the Edge Server, Enterprise Server and the Compliance Jumpstart Package—during its fourth quarter, which starts November 1.

Last month, BEA enterprise software rival IBM announced a partnership with OATsystems (see IBM Announces Partnership, Products) to offer companies RFID solutions with OATSystems' software running on IBM's WebSphere platform. Erik Michielsen, director of RFID and ubiquitous networks for ABI Research, says the IBM-OATSystems partnership and BEA's acquisition of ConnecTerra are two examples of what he anticipates will become a trend within the growing RFID industry: small, RFID-focused technology firms partnering with large enterprise-focused technology companies and service providers, such as IBM, BEA, Oracle, SAP and Cisco Systems.

"What's exciting is that OATSystems and ConnecTerra started out as two RFID middleware companies, both based in Boston, both heavily connected to the Auto-ID Center and EPCglobal and data standards. It's been really nice to see how both companies have matured their businesses while finding new ways to deliver RFID software and applications," he says. "Both companies have influenced the RFID market, and they both have vision and engineering [strengths]. But there is a breaking point for these small companies. From an enterprise deployment perspective, they need these larger companies."

Michielsen believes BEA will help ConnecTerra in pushing RFID onto an enterprise-level network infrastructure. For executing RFID systems on a large scale, he says, "you really need to have some big-time support—and that's where BEA comes into play. They can offer the support to handle large-scale RFID implementations."

In September, Cisco announced that it had embedded ConnecTerra's RFID software into its routers to handle RFID data filtering and routing (see Cisco Embeds RFID Apps in Network). In addition, ConnecTerra has teamed up with makers of supply chain management tools and warehouse management software, including Yantra, a BEA Systems partner, to provide RFID tag data filtering and routing services.

BEA Systems and ConnecTerra report that a number of companies use both BEA and ConnecTerra software to support their RFID efforts. Only one, national postal operator Finland Post, has made public statements about its relationship with both firms. Finland Post says it worked with both companies to establish its RFID-enabled asset tracking system.

BEA Systems explains that with its ConnecTerra acquisition, it will target hundreds of retailers and manufacturers deploying RFID systems, as well as potential users of RFID in the pharmaceutical and transportation industries.

In August, BEA Systems paid about $200 million in cash for Plumtree Software, a maker of software used to connect work groups and computer systems. According to Breya, BEA plans to continue acquiring application providers that will enable the company to grow its enterprise solutions platform. She claims BEA looked at a number of other RFID vendors prior to focusing its acquisition efforts on ConnecTerra.
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