New York — January 25, 2008 — Only a couple of years ago, companies specializing in radio frequency identification (RFID) integration services could succeed by offering clients their specialized knowledge of how RFID technology worked — or, in some cases, didn't work. Today, RFID works well out of the box, and according to a new study from ABI Research, it is time for RFID integrators to think about repositioning themselves.
While the opportunity is still there for technology specialists, explained ABI principal analyst Pete Poorman, the market is evolving such that increasingly they must deeply understand some specific application.
"RFID systems integrators can still do business today as boutique specialists, but they need to have a strategy to expand their value proposition," Poorman said, pointing out that the vendors profiled in ABI's new report, "RFID Integration Services Markets," all have such strategies.
A common approach is to address a particular well-understood vertical market, and an example of a company following that strategy is CACI International. CACI has one customer, the U.S. government, in particular its military branches. With that tight vertical focus, it has the insight and the appropriate knowledge, and it can "talk the talk" as required.
Another strategy is to augment services with packaged product offerings, as RFID equipment increasingly obviates the need for deeply technical integration services. High-profile vendor Xterprise appears to be choosing this path.
Still other vendors are doubling down on their technology expertise. This involves repositioning themselves from being frontline solutions providers to taking a second-tier role. "Companies choosing to remain technology-focused are looking to channels to provide the deep vertical market knowledge," said Poorman. One example is Intermec, which has packaged its full suite of RFID integration services for delivery through channels.
Whatever formula is chosen, Poorman said, the key message to RFID integrators is: "You can't stay where you are — the highly valued technical knowledge you deliver today will become more common as time passes and, ultimately, be embedded in products. Your services offerings must adapt to this market change."
ABI said its report "RFID Integration Services Markets" explains how integrators can craft a strategy that will help them thrive in a fast-changing RFID market environment. It provides an overview of the market for RFID integration services and identifies the key market trends, forecasting market size by application area and vertical market, and profiling representative firms providing these services.
While the opportunity is still there for technology specialists, explained ABI principal analyst Pete Poorman, the market is evolving such that increasingly they must deeply understand some specific application.
"RFID systems integrators can still do business today as boutique specialists, but they need to have a strategy to expand their value proposition," Poorman said, pointing out that the vendors profiled in ABI's new report, "RFID Integration Services Markets," all have such strategies.
A common approach is to address a particular well-understood vertical market, and an example of a company following that strategy is CACI International. CACI has one customer, the U.S. government, in particular its military branches. With that tight vertical focus, it has the insight and the appropriate knowledge, and it can "talk the talk" as required.
Another strategy is to augment services with packaged product offerings, as RFID equipment increasingly obviates the need for deeply technical integration services. High-profile vendor Xterprise appears to be choosing this path.
Still other vendors are doubling down on their technology expertise. This involves repositioning themselves from being frontline solutions providers to taking a second-tier role. "Companies choosing to remain technology-focused are looking to channels to provide the deep vertical market knowledge," said Poorman. One example is Intermec, which has packaged its full suite of RFID integration services for delivery through channels.
Whatever formula is chosen, Poorman said, the key message to RFID integrators is: "You can't stay where you are — the highly valued technical knowledge you deliver today will become more common as time passes and, ultimately, be embedded in products. Your services offerings must adapt to this market change."
ABI said its report "RFID Integration Services Markets" explains how integrators can craft a strategy that will help them thrive in a fast-changing RFID market environment. It provides an overview of the market for RFID integration services and identifies the key market trends, forecasting market size by application area and vertical market, and profiling representative firms providing these services.
