IBM Launches New RFID Services

By Bob Violino

IBM is expanding into RFID with a new services initiative called "E-business to Smart Machines."


October 3, 2002 – IBM has launched a new services initiative called “E-business to Smart Machines.” The company is expanding teams of consultants that can provide everything from system design to integration of RFID systems for industrial, retail, logistics and domestic e-business applications.

Big Blue says the move is in response to an increase in interest among clients in all kinds of RFID systems, from self-checkout devices for retail to smart card payments systems. “We are seeing greater uptake in the marketplace and are responding by bringing up to speed our service capabilities,” says Robyn Levine, business unit executive for wireless services, which is part of IBM Global Services.

IBM recently demonstrated a self-checkout product at a business conference in Zurich, Switzerland. The company worked with RFID vendors to create the reader, but did the integration work needed to make it possible for consumers to be able to verify the purchase, swipe a smart card to pay for the goods and get a receipt.

The system is attracting a lot of attention, according to Levine. “A lot of retailers are learning about self-checkout, whether it’s through pilots or store of the future initiatives,” she said. “We are working with a number of customers on pilots.”

IBM has been working with Safeway in the United Kingdom to create an RFID payment card. The system can be used to increase loyalty among customers by offering special instantly redeemable coupons, and it can reduce credit card fraud.

IBM also helped develop a program called eSuds with USA Technologies. The partners installed 9,000 smart washers and dryers on university campuses. Students can pay for using the machines with smart cards, and the owners of the appliances can monitor them via the Web.

Levine says IBM has also seen an increase in customers interested in supply chain applications. “RFID in the supply chain is gaining huge traction,” she says. “A lot of clients are looking into it. They are preparing blueprints and trying to understand what it means for their supply chain and for their partners across the supply chain, from the manufacturer to the distributor to the end client.”

Many large companies have been hearing about RFID because of articles in the press about the Auto-ID Center and other initiatives. It is not clear whether the interest or even the pilots will result in real implementations. Many companies are waiting until standards emerge, so they don’t get stuck with a proprietary technology that may become obsolete in a few years.

IBM sees a huge market opportunity in integrating data from RFID systems with existing enterprise systems. IBM yesterday closed its acquisition of PwC Consulting, which is a member of the Auto-ID Center and has been active in this market. Accenture has also been developing a “Silent Commerce” platform for customers (see Accenture Demos RFID Tracking Infrastructure).

Levine agrees that standards will be the key to market growth, at least in the supply chain. “There are benefits within the four walls of a company in being able to track products, assets, containers, and material goods,” she says. “But there is a bigger picture that is coming alive through the complete integration of supply chain partners. RFID allows that in an automated fashion.”