Infy, US firm in RFID alliance

OATSystems Inc, a Boston, US-based radio frequency identification (RFID) company, has announced its tie-up with Infosys Technologies.

The company made the announcement after opening its new 12,000 sq ft RFID product development facility in Bangalore on Tuesday.

OAT and Infosys will work towards identifying opportunities across multiple verticals. While OAT will develop the RFID software, it will utilise Infosys' services capabilities to deploy its products across the world. The companies will also have a joint go-to-market strategy.

"OAT will build world-class RFID software products and Infosys will play a key role in delivery infrastructure. Infosys will implement the OATFoundation suite at clients, and build OAT expertise in its RFID practice to support OAT implementations," U B Pravin Rao, senior vice president and executive sponsor for RFID at Infosys, said.

Officials at OAT, instead of putting a number on the business opportunity of this partnership, said, "Considering the manner in which RFID has taken off the world over, the opportunity is as large as it can be."

According to Sanjay Sarma, chief technology officer, OAT Systems, "RFID is currently one of the largest business transforming technologies in the world. Businesses and governments are demanding world-class systems to make RFID work for them. The stakes are high, but we are confident that India has the talent pool to compete and excel in the area of cutting edge software product development."

However, this is not a exclusive tie-up with Infosys for deployment of RFID. OAT has similar tie-ups with companies like Bearing Point, CapGemini, Hewlett-Packard and Intel. Sarma feels that since the opportunity is large enough, it will not lead to a clash of interests among its deploying partners.

OAT procured a Series A funding of $11.5 million in September 2003 from two well-known venture capital firms, Matrix and Greylock. The latter is a leading early-stage venture capital firm with over $2 billion committed capital under management.

Stating that the company is not currently in need of additional funding, Sarma said that OAT is using a part of its Series A funding to open its RFID product development facility in Bangalore. OAT has a client base of 40 companies with about 60 installations worldwide. Key clients include Tesco, HP and the US Department of Defence.

Come 2005, retail giants like Wal-Mart and Tesco are making it mandatory for all their suppliers to be RFID-compliant. This itself is a huge business opportunity for a company like OATSystems.

RFID's potential market includes all companies that buy, sell or handle goods in the supply chain. The current supply chain management (SCM) market is $5.2 billion (2003). IDC estimates a $91 million RFID spend in 2003 in the US, which will grow to $1.8 billion by 2007. The Yankee Group, another independent research company, estimates the 2008 RFID market at $ 4.2 billion.