Microsoft retail project taps into RFID

updateThe software giant says it plans to offer retailers its next-generation technology, including emerging wireless applications such as radio frequency identification.

Microsoft said Monday that it established a new project aimed at providing next-generation technology to retailers, including emerging wireless applications such as radio frequency identification.

The announcement, made as part of the ongoing National Retail Federation (NRF) convention in New York, targets development of applications for nearly every aspect of the retail universe, from shopping to inventory management. Dubbed as the Smarter Retailing Initiative, the effort promises to deliver tools that allow retailers to interact with customers , improve operations management and incorporate emerging wireless technology. Microsoft said that software built under the effort would be based on its .Net Web services framework and would have an interface to existing products.


What's new:
Microsoft will create tools that allow retailers to interact with customers, improve operations management and incorporate emerging wireless technology. The software will be based on the company's .Net Web services framework and would have an interface to existing products.

Bottom line:
Retailers are expected to use radio frequency identification, or RFID, for everything from tracking inventory to communicating information on special deals to consumers via wireless devices. Microsoft's plans should boost these efforts.

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The Redmond, Wash.-based software maker reported that it has already signed on a number of partners to contribute to the project, including consultants such as Accenture and Cap Gemini Ernst & Young, and technology vendors like Dell Computer, Hewlett-Packard and Intel. Microsoft also has recruited several retail chains to participate in the program, including 7-Eleven, Circuit City Stores and RadioShack.

Perhaps the most intriguing element of the new effort is a Microsoft partnership with Accenture, which has already produced several RFID-based technologies designed for use by retailers. RFID chips carry descriptive information, most frequently regarding products to which they're attached, that can be read by a number of different devices, including handheld computers or sensors located in a warehouse. Retailers are expected to use RFID for everything from to communicating information on special deals to consumers via wireless devices.

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Microsoft also announced that it has joined the Metro Group Future Store Initiative. The effort to promote innovation in retail technology and to create industry standards was founded by Metro Group, a German consumer packaged goods company, along with IBM, Intel, SAP and other technology providers.

Although the company offered few concrete examples of the sort of technologies it plans to develop for retailers, it pointed to use of its Windows XP Embedded operating system software as a prime area for development. Microsoft said that some of its retail partners are already using the software to create shopping tools that use wireless devices such as cell phones and personal digital assistants (PDAs) to deliver information to customers.

Other applications being developed under the program include software for use with point-of-sale terminals and analytic tools based on Microsoft's SQL Server designed specifically for the retail sector. The software maker reported that RadioShack has already adopted 8,000 point-of-sale systems based on Windows XP throughout its stores and that it built a mobile store management system with another partner, Wipro Technologies.

"Microsoft's Smarter Retailing Initiative flows from our belief that there are many opportunities for innovation in the retail industry today, but they primarily lie on the edges, where retailers interact with consumers and manage their supply chains," Brian Scott, general manager for the Microsoft's retail and hospitality business unit, said in a statement.

Industry analysts praised Microsoft's efforts to become more involved with both the retail industry and RFID, but pointed out that they remain largely unproven. Christopher Boone, an analyst at IDC, said the software maker is wise to partner with companies that have already worked for years on developing RFID, such as Accenture, and to get involved with industry efforts like the Future Store Initiative.

"Where exactly Microsoft is going to fit in the RFID puzzle isn't certain, as they're not a middleware vendor, but (Microsoft) has a pretty good vision of how to work with partners to become a piece of the architecture supporting everything," Boone said.

He noted that Microsoft has long been perceived as being "too broad" in its efforts aimed at the retail sector, but said its recent work around point-of-sale terminals and Windows XP Embedded is changing that perception. Boone said he expects Microsoft to increasingly push to increase its influence with retailers through Windows products that support in-store applications and supply chain management technology.

Microsoft highlighted the retail initiative as part of a $6 billion effort aimed at sharpening its focus on particular vertical industries.

Other software makers revealed new retail-focused efforts at the NRF conference, including Microsoft rival Sun Microsystems , which detailed electronic product code tracking software for supply chain management built in conjunction with one of its developer partners, Aldata.

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