Microsoft, Oracle and IBM last week lent heavyweight support to the growing gang backing radio-frequency identification (RFID) tags, as a survey found four in 10 European retailers plan to pilot the wireless technology this year.

Microsoft is targeting the supply chains of mid-market firms by backing the technology in new versions of its Axapta system and Navision Business Solutions back-office software. Oracle will build RFID support into its Warehouse Management System software, and IBM has formed an alliance with Philips to collaborate on RFID projects.

Microsoft plans to release its software in the second half of this year or the first half of 2005 and has piloted the technology at Danish snack food maker Kims, with rewritable tags made by Avery Dennison attached to pallets.

"Mid-market firms often don't have full control over the status of their goods," said Bjarne Schøn, Microsoft Business Solutions director of supply-chain strategy. "They often lack the ability to set inventory levels, predict demand and handle exceptions. They don't have the funds or the PhDs to do the job, so the key is making complex things simple."

Microsoft's rivals are also rushing to add RFID support. SAP, the enterprise applications market leader, last month released RFID-enabled versions of key products.

The pace of RFID is being forced by retailers such as Wal-Mart, Tesco and Marks & Spencer setting deadlines for suppliers to adopt the technology. Tesco UK IT director Colin Cobain acknowledged that evolving standards may cause problems but argued that firms should not delay pilots. "Don't hang on for everything to be put in place," he told last week's RFID ROI Forum in London.

Jørn Tolstrup Rohde, chief executive of Kims, said: "You don't want a different tag for each country. At the moment it's like VHS, Video 2000 and BetaMax. The price of the tags if you're using them on a palette is not so bad but if it's a carton it's different."

While retail giants stand to gain, their suppliers face a costly build-out. "[At best RFID will offer] marginal savings on productivity in our supply chain because our processes are already pretty efficient through the use of barcodes," said Paul Roberts, manufacturing systems manager at Nestlé, speaking at the forum.

Peter Ward, RFID business development executive at IBM, said, "There is a perception the main benefits will be for the retailer. This is possibly correct."

However, firms are moving ahead: 41 percent of European retailers plan RFID pilots this year, according to a survey by Vanson Bourne, commissioned by RFID label printer maker Printronix.