Microsoft has formed a new industry group to look at radio frequency identification (RFID) technologies, with the aim of driving its software further into the business supply chain.

The Microsoft RFID Council includes Accenture along with RFID technology firms GlobeRanger, Intermec Technologies and Provia Software. It will meet for the first time later this month.

The partners will produce products and services based on Windows CE, SQL Server and BizTalk Server software, as well as Visual Studio and Web Services Enhancements for Microsoft .Net.

RFID combines wireless technology and microchips to track merchandise and streamline the supply chain.

"With RFID in the early stages of adoption we are continuing to expand and evolve our partner-driven strategy based on the needs of the industry," said Javed Sikander, programme manager for RFID strategy at Microsoft.

The company began a six-month RFID pilot in December 2003 to develop and test RFID software for sale in 2005.

The pilot project, for Danish snack manufacturing company KiMs, was designed to tag and track thousands of pallets from production to third-party warehouses.

"RFID is the talk of the town," commented Cinzia Rinelli, senior research analyst for IDC's European vertical markets group.

"Despite this, this technology is still at its early adoption and trialling phase in westen European retailing, with the exception of a few pioneers - including Tesco and Selfridges - that decided to implement RFID for supply chain enhancements.

"It will take more than two years before retailers will start implementing in-store solutions like those that are already in place at Metro Future Store in Germany."

Mark Roberti, editor of the RFID Journal, said of the Microsoft RFID Council: "This is good news for the industry. Microsoft is obviously a very important vendor for most of the companies that are looking to deploy RFID technologies.

"Microsoft is listening to its customers and working with partners to build a bridge between today's supply chains and future RFID-driven supply chains. That's what the industry needs and what end users want."