According to the IBM website, IBM has sold its Infosphere Traceability Server (ITS) product to Frequentz, a company based in Los Altos, CA.

The IBM ITS webpage now states:

“Frequentz acquired the IBM InfoSphere Traceability Server in Oct 2, 2012. All future information regarding the InfoSphere Traceability Server products will be available from Frequentz.”

No other information about the sale was included.

This is stunning news considering the history of the ITS product, and because it seemed to be one of several centerpieces of IBM’s “Smarter Planet” marketing campaigns.  IBM conceived the idea for the product in 2004 shortly after Craig Asher came on board as part of their acquisition of Trigo Technologies.

Craig became the product manager for the product, named the “RFID Information Center” (RFIDIC) in IBM’s catalog at that time.  Between 2004 and 2007 Craig oversaw the development of the product into a data repository and platform based on the new GS1 EPCgobal Electronic Product Code Information Services (EPCIS) interface standard.  Craig was a co-chair of that standards effort.  According to an old Wikipedia article, the product was renamed Infosphere Traceability Server (ITS) by IBM in 2008.

E-PEDIGREE:  AN APPLICATION, OR A “FEATURE”?

One of several debates I had with Craig back in those days was whether or not ePedigree was an application or just a “feature”.  Craig argued that it was nothing more than a feature on top of EPCIS.  In my view, he was mistaking the concepts of “track and trace” or “chain of custody”–which arguably could both be just a feature of an EPCIS-based repository–for ePedigree–a more complex concept that should be implemented as a full application “on top of” a repository.  We never convinced each other.

After Craig moved on, I continued the debate with Daniel Hernandez without conclusion.  After Daniel moved on I found that the debate had dissolved when the new IBM product manager simply agreed with me.  By that time IBM had added full GS1 Drug Pedigree Messaging Standard (DPMS) capability to the ITS product in a separate drug pedigree module.

IBM SHOULD NEVER HAVE ENTERED THE E-PEDIGREE MARKET

As I understand it, IBM had a number of customers in the food, and perhaps other supply chains, who were using their ITS product for tracking and tracing.  I also understand that they had a number of customers in the pharmaceutical supply chain that were using the drug pedigree module.

I don’t know how much of their ITS-related revenue came from those pharmaceutical supply chain customers but I have felt for several years that the company made a strategic error when they entered that market back around 2007 when AmerisourceBergen began using RFIDIC for ePedigree.  Eventually both of the other “big 3” wholesalers invested in the use of IBM’s ePedigree solution as well.

What IBM management didn’t realize is that drug ePedigree is a complex application that requires highly specialized attention to details.  E-Pedigree software product managers must stay on top of the latest changes to state and federal pedigree laws so that their product remains usable by their customers in those locations.

Because of the patchwork of ePedigree laws in the U.S., ePedigree software must have some features that are unique to single states.  For example, IBM’s product was serialization-based, which is currently going to be required only in California.  The product would have been very difficult to use to meet any other state or federal pedigree law without significant changes.

But the biggest error IBM made was in thinking that a  multi-national computer hardware and software mega-corporation could make enough money on an application that has such a niche market.  Big corporations like IBM need big markets for their products–preferably products they can sell globally and across multiple industries.  Currently ePedigree is only marketable in the United States and only in the pharmaceutical supply chain.  That’s way too small for a big company.

E-Pedigree is ideally suited for a “boutique” software company.  One that can dedicate the resources to monitor the various state and federal pedigree laws, keep their applications up-to-date and provide the extra help necessary for their customers to use their product to meet those laws.

I think VeriSign ultimately learned this lesson, which is probably what led them to exit the ePedigree business around the time IBM entered it.  It appears that SAP might also “get” this logic, considering that they have never entered the ePedigree solution market.  I think Oracle and perhaps Microsoft remain the only large software companies that claim to have some kind of ePedigree offering.  All of the other ePedigree companies out there are what I would term “boutique”.

And it appears that the buyer of the IBM ITS solution, Frequentz, may also be just that.  It will be interesting to see what they do with the product.

For more of my thoughts on what IBM may be thinking/doing, read my next essay, “Could It Be The Cloud? More Thoughts On IBM’s Divestiture Of Its EPCIS And E-Pedigree Suite“.

Dirk.