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BEA Systems (Nasdaq: BEAS) announced yesterday the acquisition of ConnecTerra, a privately-held Radio Frequency Identification (RFID) middleware technology company. Financial terms of the deal 
were undisclosed.
BEA said the acquisition will allow it to integrate RFID across a company's business units, applications and processes. Specifically, BEA said the acquisition can help its customers address the growing amount of RFID data captured across supply chains.
"ConnecTerra is an exciting acquisition for BEA and our customers," said Alfred Chuang, chairman and chief executive officer of BEA Systems. "Most of the early RFID adopters are already using BEA and ConnecTerra technologies, and this gives us the industry's first end-to-end standards-based infrastructure for RFID -- from the capture of raw RFID events to the translation of those events into relevant business data."
Growth Through Anti-Shrinkage
The Food and Drug Administration estimates as much as US$40 billion in inventory is lost or stolen annually from the supply chain. That may be one reason that 69 percent of companies surveyed in an AMR Research study are planning to evaluate, pilot or implement RFID this year.
Studies show that companies across retail , consumer products, pharmaceuticals, defense and transportation find value in RFID. The technology can help companies reduce out-of-stock inventory, counterfeiting and spoilage, increase security of cross-border shipments and track high value assets, among other applications.
With the ConnecTerra acquisition, BEA gets a company that boasts more than 25 consumer packaged goods, retail and transportation companies, and system integrators as customers. ConnecTerra also plays a leadership role in the groups that are shaping RFID standards.
Interabor Solutions Principal Analyst Dana Gardner told CRM Buyer that ConnecTerra is a great fit for BEA, technologically speaking, that puts the company in a better position to go after the RFID market.
"The demand on the infrastructure from the burgeoning use of RFID is going to be something that could become a choke point," Gardner said. "The recognition that RFID is going to create a tremendous amount of new data and edge points will require a high performance back end capability."
Exploring the Technology
ConnecTerra's RFID infrastructure software is designed to provide the core communications, security, policy and device management services, which can be used to integrate devices into various applications. This includes software at the "edge" for filtering and device management at the local store, manufacturing plant or distribution center, enterprises, and compliance software to address RFID retail and defense mandates.
Of course, BEA has plenty of competition in the RFID space, namely database players like IBM (NYSE: IBM), Microsoft (Nasdaq: MSFT) and Oracle (Nasdaq: ORCL). But Wai Wong, executive vice president of products at BEA Systems, is confident about the company's prospects in this field.
"The acquisition of ConnecTerra helps boost our portfolio to help those customers leverage their enterprise assets in a unified way, from the edge all the way to the data center," Wong said.
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