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OATSystems Gets $12.5m, New CEO

Leading middleware provider OATSystems today announced the closing of $12.5 million in funding and the appointment of a new CEO.
Apr 25, 2006This article was originally published by RFID Update.

April 25, 2006—Leading middleware provider OATSystems today announced the closing of $12.5 million in funding and the appointment of a new CEO. The funding was led by Matrix Partners and Greylock Partners, who were original investors in the company. The new CEO is Michael George, who was CEO at enterprise portal software provider Bowstreet before its acquisition by IBM in December. George replaces OAT co-founder Prasad Putta, who will continue in strategic business development activities at the company.

The announcement positions the new funding and CEO as a strategic move at a transitional time for both the RFID industry and OAT itself. "RFID technology and applications in the extended supply chain are at an inflection point," said George. Putta was quoted as saying, "The company is well poised to capitalize on our unparalleled market position and we welcome Michael's leadership at this pivotal time."

There are a number of reasons why OAT might consider this a "pivotal time". It could be that the company anticipates a significant uptick in demand as supply chain RFID adoption moves out of the "trough of disillusionment" and into a period of strong, sustainable growth. Or it could simply be that the company considers itself to have arrived at a level of maturity and size that requires an experienced CEO.

OAT was long considered a first-mover and leader in the middleware space. Co-founder and CTO Sanjay Sarma is by all accounts an RFID thought leader, having co-founded the MIT Auto-ID Center in 1999 and served as its Chairman of Research. The company's customers include many of the leading RFID early adopters, like Tesco, Gillette, Best Buy, and Hewlett Packard.

Recently, the company's profile has been lower than it was as RFID hype was peaking in 2003 and 2004. Last year, many analysts concluded that the middleware market was only a passing one, as the functionality offered by stand-alone middleware was encroached upon by increasingly intelligent edge devices and enterprise software packages from the likes of IBM and SAP. OAT competitor ConnecTerra was purchased by BEA Systems in October (see BEA Systems Acquires ConnecTerra), and it seemed that another middleware provider acquisition was likely (see ABI Research: Impending RFID Software Market Shakeout). Many believed that OAT's close relationship with IBM made for a probable match. It remains to be seen how OAT's new leadership and significant cash-on-hand will impact the possibility of the company being acquired.

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