IDC: RFID Deployments Accelerating in 2005

Study shows leading services and integration firms playing significant role in $2 billion marketplace

Study shows leading services and integration firms playing significant role in $2 billion marketplace

Framingham, MA — December 6, 2004 — Encompassing a wide range of applications — from helping to protect the U.S. drug distribution network from counterfeiters to ensuring child safety — perhaps no other auto-identification concept has gained as much attention in 2004 as the topic of radio frequency identification (RFID).

And with major companies planning to increase the deployment and integration of RFID systems in retail stores and warehouses in the years ahead, the market for related consulting, implementation, and managed services is expected to grow by 47 percent in 2004 and reach $2 billion worldwide by 2008, according to a new report from the analyst firm IDC.

With this backdrop, RFID is regarded as a disruptive technology and a significant opportunity exists for services organizations to help transform the supply chain experience for manufacturers, third-party logistics (3PL) firms, retail establishments, and consumers. Although in the past 12 months most services vendors have primarily focused on providing guidance to help suppliers comply with retailer mandates, the emerging leaders in the market will be those companies that are able to support a wider range of customer business process challenges — beyond the mandate.

"The pursuit of true enterprise mobility continues to be driven by early technology adopters seeking competitive advantage in a particular vertical industry," said Richard Dean, program director, Mobile Enterprise and RFID Services at IDC. "In the case of supply chain participants, the deployment of RFID and related wireless sensing solutions is helping to create that long-term competitive advantage. Supporting this objective, leading services organizations are helping design, build and manage the RFID infrastructure that can deliver this long-term value."

Other key findings from IDC study include:

* RFID and wireless auto-sensing solutions have evolved into a legitimate consulting, implementation and managed services opportunity for many of the world's services organizations

* Approximately 66 percent of enterprise organizations considering an RFID solution in 2004 reported they would prefer to use external resources when implementing such projects

* Services firms are increasing levels of investment in personnel, marketing and partnerships for RFID in anticipation of increasing demand for services through 2008

The study, "Worldwide and U.S. RFID Services Competitive Analysis and Leadership Study, 2004: Disruptive Technology in Waiting and Why the Services Value Chain Matters (IDC #32183)," identifies and profiles IT services vendors; the services divisions of hardware vendors; and consulting, implementation and managed services organizations that are driving the adoption of RFID technology within the enterprise environment.