10 start-ups to watch: OATSystems

Location: Waltham, Mass.

What does the company offer? The OAT Foundation Suite, which comprises five software modules for managing radio frequency identification (RFID ) devices, data and processes.

How did the company get its start? Prasad Putta co-founded OATSystems with Sridhar Ramachandran, the company's chief architect, in April 2001 to help corporations capitalize on the use of RFID technology in supply chains.

How did the company get its name? Derived from oat, a staple of today's economy. The founders believe RFID technology likewise should be simple and pervasive.

How much funding does the company have? $11.5 million, in one round closed in September 2003. The company says it isn't seeking to raise another round as it has sufficient capital to fund current operations and planned growth.

Who's leading the company? Prasad Putta, who along with Ramachandran founded e-commerce payment provider Auripay, which anti-fraud technology vendor Cyota acquired in July 2001.

Who's using the product? 50 customers, including Best Buy, Del Monte Foods, Gillette, Kimberly-Clark, Kodak, Lowe's, Sherwin-Williams and Tesco.

Why is this company worth watching? OATSystems is an old-timer in a nascent enterprise market, and the company used its early entry to secure marquee customers before the competition got its act together.

From the start, OATSystems left the engineering of RFID tags and readers to others and put its development efforts into finding a use for RFID-generated data in enterprise networks. Its flagship software is designed to help companies make business sense of supply-chain data collected by RFID devices.

OATSystems' five-part OAT Foundation Suite sits between RFID hardware and enterprise business applications and handles tasks such as reader management, data filtering and commissioning electronic product codes (EPC) - the RFID equivalent of a bar code. The suite comprises OATaxiom, which provides a system of record for RFID-related data collected from internal and external sources; OATxpress, which spells out how to RFID-enable business processes such as pallet building, shipping and receiving; OATlogic, an engine for running OATxpress processes and building customized RFID processes; OATepc, which handles EPC number management; and OATmw, which handles the deployment, configuration, monitoring and administration of RFID devices including readers and printers.

On the downside, OATSystems doesn't offer the enterprise-class integration and data management capabilities necessary to associate supply-chain data, such as invoices and product pricing, with RFID-generated information. Instead, OATSystems offers adapters for building point-to-point integration or says customers can use third-party tools to handle the application-level integration. This shortcoming could hurt the company as customers moving from RFID pilots to implementation projects begin to look for broad, scalable platforms.

Increasingly, OATSystems will face competition from some big-name vendors - such as IBM, Tibco Software and webMethods - that have the integration platforms to offer and are developing RFID-specific middleware .

But OATSystems' expertise and participation in real-world RFID rollouts will keep the company competitive. OATSystems tripled its revenue and nearly doubled its headcount in 2004. With 100 employees to date, OATSystems says it will continue hiring aggressively this year to keep up with burgeoning demand.

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