BEA Bags ConnecTerra

RFID space heats up as BEA nabs middleware startup ConnecTerra for an undisclosed fee

October 12, 2005

3 Min Read
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As users wrestle with the demands of Radio Frequency Identification (RFID) deployments, BEA Systems Inc. (Nasdaq: BEAS) today snapped up middleware startup ConnecTerra to meet market demand for RFID control.

Keeping track of the masses of data generated by RFID devices poses a potential nightmare for data center managers. More users are looking to specialist software, known as middleware, to tie their disparate systems together and make sense of the imminent RFID data explosion. Middleware summarizes the data, and manages the RFID reader devices and tags.

ConnecTerra offers a range of software to collect and manage data from these devices.

Todays deal is hardly a surprise. BEA has talked about building RFID capabilities into its own portfolio of software products for some time now. (See Middleware Players Eye RFID.)

Speaking on a conference call this morning, Marge Breya, BEA’s chief marketing officer, promised that products based on ConnecTerra’s technology will be available in the fourth quarter.Although she refused to disclose the financial terms of the deal, Breya suggested that ConnecTerra’s 28-strong workforce is likely to move over to BEA. “We’re thrilled to have the ConnecTerra team on our side,” she said.

The exec hinted that this may not be the software giant’s last M&A foray into RFID. “Over the last year we have done a lot of due diligence on identifying credible partners in the RFID space.”

A number of startups are gaining traction in the RFID market, and BEA is likely to face stiff competition from rival middleware vendors. (See Startup Raves on RFID, RFID Startup Secures $6 Million and IBM Acquires Trigo.)

By acquiring ConnecTerra, BEA is clearly looking to expand the compatibility of its middleware. ConnecTerra is already partners with Cisco Systems Inc. (Nasdaq: CSCO), as part of Cisco’s Application Oriented Networking (AON) initiative. (See Cisco Gets Application-Oriented and Cisco Intros RFID .)

ConnecTerra has links with Sun Microsystems Inc. (Nasdaq: SUNW), an investor in the startup. Sun is currently planning its own assault on the RFID space. (See Sun Extends RFID Portfolio, Sun Takes RFID to the Enterprise and Sun Announces New RFID Solution.)This could be a shrewd move by BEA. Experts have warned that the network is likely to be one of the biggest pain points for RFID deployments, and users face the challenge of linking up an array of different data center equipment. (See IDC: RFID Success Depends on Networks and RFID Feeding Frenzy.)

Much hype has surrounded RFID over the last few years, while retailers and manufacturers are only now starting to get to grips with the technology. Supermarket giant Wal-Mart, for example, gave its top 100 suppliers a January 1st deadline for RFID compliance. Since then, Virgin Atlantic Airways has launched its own pilot, with Oracle Corp. (Nasdaq: ORCL) to RFID tag aircraft parts at London's Heathrow airport (See Virgin Atlantic Pilots RFID Scheme and RFID Feeding Frenzy.)

The technology works by using tags, on either a specific product or package, that emit radio signals. "Reader" devices pick up these signals, enabling the products to be tracked. Previously, businesses relied on barcode readers to keep track of their wares; RFID technology does not require direct contact or what is known as "line-of-sight" scanning.

The market was less than overwhelmed by today’s acquisition. Shares of BEA fell 4 cents (0.47 percent) to $8.53.

— James Rogers, Site Editor, Next-Gen Data Center Forum0

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