RFID Specialist Stratum Global Spins Off from LANSA

by Alex Woodie

Two former LANSA executives have formed their own company, called Stratum Global, to tackle the growing market for solutions built on radio frequency identification (RFID) technology. Headed by Alan Christensen and Bill Hood, Stratum Global was spun off from LANSA in December and is looking for customers interested in small-scale RFID projects that prove the cost-effectiveness of the technology.

LANSA had been developing its RFID product, LANSA RFID Direct, for the last year or so. Last September, the company presented the product at the Frontline Solutions 2004 Conference in LANSA's hometown of Chicago, and then announced that it would ship later in the fall. Since then, the company's RFID strategy has changed a bit.

The decision to spin the RFID project off into its own separate company was based on decisions that LANSA made about its strategic direction, says Hood, who spent five years at LANSA and was director of marketing when he left. "I don't think LANSA was interested in pursing all the outside components that were needed to make this a top-notch solution," says Hood, now Stratum's chief operating officer. These outside components included bringing RFID hardware and services into a unified solution, which the new company calls StratumRF.

As part of the deal, LASNA sold Stratum Global, for an undisclosed price, all the rights and intellectual property for the RFID product, as well as the facility in Littleton, Colorado, where Christensen, a 10-year LANSA employee, headed the company's solutions group as a vice president. Stratum also gains LANSA's ties to the EPCglobal organization, tasked with setting electronic product code (EPC) standards, and its partnership with RFID and barcode equipment maker Intermec. Two other LANSA employees joined Stratum, in addition to Hood and Christensen, and LANSA and Stratum Global remain close strategic partners. In fact, LANSA will be selling StratumRF to its large installed base of iSeries customers. Stratum Global will also refer some customers to LANSA, particularly in projects where UCCnet compliance is a prerequisite to meeting an outside RFID mandate.

Stratum Global's business plan is reflected in its motto: start small, think big. The company is not looking to land the accounts of the large Fortune 500 and Fortune 1000 manufacturers that have hard RFID deadlines to meet, Hood says. The big guys, like IBM Global Services, can have those accounts. The type of account that Stratum Global is looking to win is a manufacturer that might have to start using RFID technology in a couple of years and wants to gain some experience and prove a return on investment (ROI) on the technology, Hood says.

Stratum's first client, a manufacturer in California, fits this description. This company will be using mobile RFID readers mounted on forklifts to send data to an enterprise application to improve its handling of inventory. This implementation, which is scheduled to go live in February, is a "closed loop" RFID system, which means the data is kept within the organization, as opposed to sending it to another trading partner. With closed-loop systems, the goal isn't to satisfy the demands of Wal-Mart, but to make your own business more efficient and profitable, Christensen says. "You're doing it to get ROI. Closed loop we're really going after in a big way."

The plan is, by the time Stratum has shown a few dozen customers that RFID can actually be good for their own business, as opposed to just being what the industry calls a "cost-plus" (or good for Wal-Mart's business), the industry at large will be more accepting of RFID and the cost of RFID components will have dropped considerably. Once the first couple of waves of Wal-Mart compliancy projects are in place, RFID components will not only be more affordable, but there will be more knowledge and experience on how best to put them together to improve supply chain efficiency as well. Stratum's plan is to be in the thick of that learning--and reward--curve.

By 2007, half of Wal-Mart's suppliers will be RFID-compliant, Christensen says. Four years from now, RFID will be on its way to becoming a commodity, like the barcode is today. But RFID technology will also have ramifications outside the consumer goods supply chain, and will continue to change the way business is done in a variety of industries for the next quarter century, Hood says. "We're in this for the long haul."

Stratum's RFID software runs on iSeries servers and on Linux- or Windows-based Intel "appliances." Stratum advocates the use of so-called smart RFID readers, which Intermec is pushing. These smart readers connect directly to the ERP or WMS and don't require a middleware component. Stratum will also work with other brands of RFID reader. The company also has a partnership with OS/400 barcode and RFID label printing developer TL Ashford, and has inherited from LANSA the knowledge of how to connect to the most popular ERP systems on the OS/400 platform. The cost of an RFID solution from Stratum, including one reader, software, and services, costs around $125,000.

To help businesses along their way to RFID adoption, Stratum Global is offering an RFID Readiness Assessment, which Christensen describes as a "one-day, high-impact" visit by a company rep. The assessment includes a physical site survey, which includes analysis of how readers and tags can be used in your facility, as well as discussion of the businesses' pain points and what they expect to get out of an RFID project.

For more information, go to www.stratumglobal.com.