IT asset management gets fancy

Sun, others keep inventory of physical assets using wireless tags.

Instead of spending $2 million each year to physically inventory the contents of its Newark, Calif., testing lab, Sun spent about $200,000 to implement a system that uses wireless-sensor technology to find gear.

The 6,000-square-foot facility houses more than 10,000 servers and other computing devices. By tagging each with an RFID label, Sun can verify the location – down to the server rack – and physical characteristics of every lab asset, whether or not it’s linked to a network.

“In this kind of environment, assets go online and offline quite a bit, and they get moved around,” says Julie Sarbacker, director of Sun’s RFID business unit. Traditional network-based asset-management software doesn’t keep tabs on non-networked assets, so devices that weren’t in use often weren’t accounted for, she says.

Sun isn’t alone in turning to technology for help in locating and managing expensive physical assets, according to The Yankee Group. Enterprise adoption will drive the market for real-time location systems from $20 million in 2005 to $1.6 billion by 2010, the research firm estimates. The surge is caused in part by accelerating Wi-Fi deployments and the availability of more-mature RFID technologies.

The primary users of real-time location systems are healthcare, manufacturing and logistics companies, says Marcus Torchia, a senior analyst at The Yankee Group. Healthcare companies use location systems to keep tabs on easily misplaced hospital mobile medical equipment, for example.

To date, tracking enterprise assets, such as servers, with RFID is a very small subset of the market, but it’s a valid scenario, Torchia says. “The beauty of the technology is you can tag any asset and have visibility to it, inside a building or on a campus. It doesn’t really matter where it is or what its application is.”

In the past Sun hired an outside contractor every year to take a physical inventory, which required scanning bar codes on the back of each device. It could take 5 to 20 minutes to inventory the contents of a single server rack, and a lab-wide inventory took weeks, Sarbacker says. Now, because RFID tags don’t have to be seen to be read, the lab can conduct an inventory on its own in less than an hour.

The result is that Sun can better track how its assets are allocated and avoid duplicate or unnecessary hardware purchases, says Jim Clarke, the company’s chief RFID architect. “Because there’s better visibility, we’re better able to manage the resources and don’t have to buy more computers when some get misplaced,” he says.

In addition to the Newark lab rollout, Sun tried out the asset-tracking system in its Milpitas, Calif., distribution center, which handles trade-show equipment. The success of these internal projects prompted Sun to put together a commercial version of the RFID-based technology, which it announced late last month.

The RFID Industry Solution for Physical Asset Tracking includes Sun’s RFID middleware and services, as well as third-party products, such as Applied Logistics Solutions’ mobile asset-management system. Combined, the products allow users to keep track of an item’s location, and monitor its maintenance history and utilization statistics. If an asset is not in its designated location, the software sends an alert to management.

Sun isn’t alone in pursuing the market for wireless-enabled asset tracking. Start-up PanGo Networks – which has inked partnerships with Cisco, HP and Intel – offers a location-management platform that uses standard Wi-Fi networks so companies can build off their existing wireless LAN (WLAN ) infrastructure investments.

In addition to the need to reduce loss and improve asset utilization, there’s a compliance-related driver spurring enterprise interest in asset-tracking technology, says Mike Braatz, vice president of business development at PanGo. Asset tracking helps companies establish a clear chain of custody and a corporate-asset audit trail, as is required by financial-reporting legislation, such as the Sarbanes-Oxley Act.

“Certainly the IT department needs to know where its stuff is. That’s important,” Braatz says. “It’s also extremely important that the financial community within a company has a good handle on its assets and can do an accurate accounting and inventory of expensive assets.”

John Halamka, CIO of CareGroup Healthcare System, says the Boston healthcare organization tracks more than 8,000 IT assets using traditional asset tags. (In addition, it has deployed location-based tracking technology for keeping tabs on certain medical equipment and on patients and staff.) Adding technology that pinpoints where IT devices are could be beneficial. “Since many of our assets are mobile, such as laptops, computers and PDAs, it would be very helpful to know their location,” Halamka says.

Location-specific information could enable more detailed management, for example. “Beyond simple asset-tracking, geo-location can be used as a form of security or decision support,” Halamka says. Such a system could automatically grant firewall access to a laptop user inside a hospital or automatically limit a laptop user located in the intensive-care unit to viewing ICU patient information.

In a university setting, location-based data culled from wireless-enabled laptops could be used to limit students’ access to certain applications, depending on where they are, Yankee Group’s Torchia suggests. For example, a university might wish to prevent access to an MP3 network in its classrooms.

Some vendors have incorporated location-identification technologies into enterprise security products, Torchia says.

Newbury Networks, for example, uses location-based technology to detect wireless rogue access points and restrict unauthorized access to enterprise WLANs. Users outside a designated physical border are denied access, even if a wireless signal is present.

Looking ahead, a key reason corporations will adopt closed-loop sensor systems for asset tracking is the clear ROI, says Erik Michielsen, director of RFID and ubiquitous wireless at ABI Research. Broader projects, such as pursuing an RFID-enabled supply chain, are more complicated.

“There’s usually a more identifiable and achievable ROI tied to an asset-tracking project, because it’s going to be a small project,” Michielsen says. “It’s a closed loop, so you don’t have to worry about handoffs to other companies or interoperability or standards. The business benefits register more clearly with users.”