Shakeout Impending in the RFID Industry?

ABI Research warns of consolidation as need for more focused solutions increases

ABI Research warns of consolidation as need for more focused solutions increases

Oyster Bay, NY  August 10, 2005  Tags and readers are often thought of as the "business end" of RFID. They're where the rubber meets the road: where data about tagged items is stored and collected. But in reality, the business end of RFID is deep inside the enterprise. The raw data are of little value until put to use in an organization's operational machinery.

Increasingly, attention is turning to the software that enables RFID data use within the enterprise. New initiatives are flying thick and fast.

ABI Research believes that this space is primed for a shakeout in the coming six to nine months. There will be rollups, acquisitions and consolidation, as the need for more focused RFID-related software and applications grows, the technology research firm writes in its latest "RFID Research Service," which provides updates on the rapidly changing RFID market.

Broadening Beyond Middleware

According to Erik Michielsen, ABI Research's director of RFID and ubiquitous networks, movement into this software space comes from several directions.

"SAP (with its Auto ID Infrastructure, part of NetWeaver) is pushing down from the enterprise application space and picking up functions traditionally done by OATSystems, Acsis, Connecterra, Sun and GlobeRanger," says Michielsen.

In turn, some of these companies are broadening their focus beyond RFID middleware and into data analytics, business intelligence and automation networking. "OATSystems is a good example of this," he notes. "OAT is pushing up and becoming competitive with some NetWeaver functionality; and it is joined in the business intelligence space by T3Ci."

Sun, Connecterra, Oracle and Microsoft are all moving into this field according to their respective strengths, according to ABI.

Others, such as Manhattan Associates and Siemens, continue to develop RFID middleware in house, but Michielsen questions their need to keep building closed-system and/or customized solutions between the reader and the enterprise application integration layer, commenting, "I think they would be better off partnering and focusing resulting free energy on services and higher end software," he says.

Additional Articles of Interest

 RFID technology has the potential to change the way supply chains are managed, but in order to be effective businesses need to take a holistic look at the deployment. Read more in the article "Time for RFID: Applying RFID in the Supply Chain."

 For a contrary view of the future of the RFID market, see the article "The O'RFID Factor: A 'No Spin' Look at Where Radio Frequency Identification Is Headed," in the October/November 2004 issue of Supply & Demand Chain Executive.

 For more information on trends relating to radio frequency identification (RFID), follow this link for an extensive listing of articles, featuring the latest research findings on the RFID, including adoption, return on investment and barriers to implementation.

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