Everybody’s writing and reading about the promise and pitfalls of RFID (radio frequency identification). But is anybody actually making money designing RFID solutions?
The answer is yes. Just ask ESYNC Inc., a Toledo, Ohio-based solutions provider that offers RFID consulting and integration services. One of ESYNC’s major RFID customers is International Paper Co., which recently deployed an RFID tracking system in one of its Texas warehouses.
Sometimes customers can also be partners. ESYNC and International Paper plan to jointly offer RFID consulting and integration services to their mutual customers. International Paper is a massive $25 billion company. Surely, a few of its major partners will wind up knocking on ESYNC’s front door for RFID expertise.
Still, I’m not suggesting that RFID deployments represent easy money for solutions providers. On the contrary, most manufacturers are merely testing the RFID waters and don’t expect to use RFID in their supply chains for at least 12 to 36 months. For much more about RFID solutions providers in the manufacturing vertical, look for an upcoming feature in eWeek within the next few weeks.
Deal 2 — IP Phones Are Ringing
After several false starts, voice-over-IP telephones are finally connecting with customers. Although still a niche solution, I’ve noticed IP phones in several organizations I’ve visited lately, including the Long Island Children’s Museum and the Sheraton New York Hotel & Towers.
The Children’s Museum opted for Cisco’s IP phones about two years ago, while Sheraton dialed up Nortel Networks for its solution. NextiraOne, a Houston-based solutions provider, designed Sheraton’s system and has similar projects underway throughout the country. Sheraton New York’s new IP infrastructure includes a Succession 1000 IP PBX, Nortel’s Symposium Call Center Server and Optivity Telephony Manager.
Voice-over-IP hasn’t exactly been an overnight success. Back in 1998, Cisco Systems Inc. CEO John Chambers told me that his company would convert all of its internal phones to IP desktops within a year or so. That build-out suffered multiple delays related to reliability and integration issues. However, BusinessWeek recently described voice-over-IP’s growing success within Cisco. Better late than never.
Deal 3 — What Offshore Backlash?
Plenty of companies are struggling to manage their offshore operations. Cognizant Technology Solutions Corp. isn’t one of them.
The Teaneck, N.J.-based solutions provider plans to build three new offshore complexes (spanning more than 600,000 square feet of space and 6,500 employees) in Pune, Chennai and Bangalore. The two-year construction project will cost $40 million, but the potential payback is immense. Cognizant predicts building—rather than leasing—the facilities will save roughly $10 million annually.
Most solutions providers jumped on the offshore development bandwagon in the last two to three years. Cognizant, by contrast, was a first-mover and has had development centers abroad for more than a decade.
Separately, Cognizant announced that founder, chairman and CEO Kumar Mahadeva is retiring. Company president Lakshmi Narayanan takes on the added responsibility of CEO. Narayanan joined Cognizant in 1994 and previously served as the regional head of Tata Consultancy Services in India. Translation: Cognizant’s offshore strategy appears to be in good hands.
Deal 4 – Arrow Focuses on Sun
The MOCA Division of Arrow Electronics Inc. has launched a new Web-based marketing tool for Sun iForce partners. The tool allows Sun partners to track leads generated by custom marketing campaigns.
Arrow management predicts that “Sun Services will be a major growth area in 2004,” but I’m not so sure. Even during the dot-com boom, when Sun’s stock was in the stratosphere, I kept telling friends that Sun was doomed. I thought competition from low-cost Windows and Linux servers would eventually destroy the company.
There’s still room in the IT marketplace for Sun and its solutions providers. Companies like Office Depot Inc. have recently announced long-term commitments to Sun’s Solaris and SPARC hardware. But sales trends at Dell Inc., IBM Corp., Intel Corp., Hewlett-Packard Co. and Microsoft Corp. suggest that Sun will never again sit at the center of the Internet server universe.
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.