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The RFID bandwagon pulled into New York this week, as Accenture Ltd. and Microsoft Corp. announced new radio frequency identification technologies at the National Retail Federation show.

Many people have high hopes for RFID this year. Pundits believe RFID “tags” will allow manufacturers and retail companies to track supplies as they move across supply chains.

Count me among the skeptics. I spent part of my holiday vacation writing an RFID article for eWeek. (Watch for it in the Systems Solutions section within a few weeks.) The upshot? Just about everyone I spoke with in the retail industry doesn’t expect RFID to pay any dividends before 2005 at the absolute earliest.

RFID reminds me of the deafening Information Superhighway hype back in the mid-1990s. Everyone wanted to build the Superhighway but nobody knew exactly how to do it. Nearly 10 years later, broadband Internet connections are finally fulfilling all the Superhighway hype.

Admittedly, RFID’s prospects look quite strong. Instead of vendors dictating the game plan, powerful customers like Wal-Mart Stores Inc. are calling the RFID shots. Some Accenture customers have rolled out “four walls” RFID solutions that track products as the move within a specific warehouse. International Paper is working with solutions providers to package its RFID systems for other customers. And Microsoft has developed a Smarter Retailing initiative that involves RFID software. But alas, the strategy’s name almost makes you wonder if there was an earlier RFID initiative that wasn’t quite as smart.

My advice? Be wary of RFID success stories. Look at the market with a healthy dose of skepticism. And read unbiased reports from independent sources like RFID Journal.

Deal #2 – Fighting IT Terror:

Month after month, simple software worms knock thousands of PCs and servers offline. Is a broader, well-organized attack coming? American Management Systems isn’t waiting for answers. Instead, the Fairfax, Va.-based consulting firm is participating in mock IT attacks with its customers.

In one recent event, AMS organized a simulated cyber attack with the Texas Department of Information Resources (DIR) and the Public Utility Commission of Texas (PUC). The simulated digital assaults typically include denial-of-service attacks and penetration testing.

But they often forget to include “social engineering.” The term, popularized by reformed hacker Kevin Mitnick, describes how hackers strike casual conversations with unsuspecting workers to gain valuable information like system passwords, filenames and so forth.

Next page: Deal #3 &#150 Buying Some ASP Insurance

The application service provider (ASP) model has found a home in the insurance market, where American Community Mutual Insurance Co. has signed a $12 million IT services contract with Computer Sciences Corp. Under terms of the deal, CSC will host and manage health administration software for American Community.

I was a big skeptic of the ASP model in the 1999-2000 timeframe. I figured few customers would trust their applications to an outside service provider.

In many cases, I was wrong. Some of the fledgling ASPs I wrote about back then – including Mi8 Corp., – outlived the magazine I was editing at the time.

Next page: Deal #4 – In a Buying Mood

Electronic Data Systems (EDS) Corp. has snapped up the Feld Group, a Dallas-based IT consultancy, for $41 million in cash and $48 million in restricted stock and other investments. The deal strengthens EDS’s management ranks, bringing former Frito-Lay CIO Charlie Feld into the EDS fold.

The Feld Group was a privately held firm that reengineered IT operations for such customers as Burlington Northern Santa Fe and PricewaterhouseCoopers.

EDS’s gain may have been Hewlett-Packard Co.’s loss. Sources say HP watched the Feld Group from afar in 2002, mulling a possible takeover but never actually picking up the phone to strike such a deal. When Feld Group’s phone rang, it was EDS on the other end of the line.

About Contract Watch: Each week, this column examines customer engagements that are stirring the channel, and the solutions providers behind them. Our goal is to strip away the hype and tell you what’s really selling—and what isn’t—in today’s IT marketplace. Send your tips to my e-mail address below.

Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at