RFID: Trends in the competitive ecosystem
Filed in archive Market Overview by ehsan on January 23, 2006

First and foremost, the market is shifting away from a focus on tags and readers and towards integration with enterprise applications and the implementation of business process changes, where the real value of RFID will be captured. This maturation of RFID technology into the business process arena is critical if the enterprises deploying RFID technology are ever going to reap positive benefits. The initial "slap-and-ship" solutions of suppliers trying to meet retailer mandates were mere exercises in minimizing costs to meet requirements. Emphasis must shift to how enterprises can gain positive return on investment (ROI).
To date, positive and quantifiable ROI has been elusive. Most early adopters report that unexpected complications and costs incurred during the implementation and verification process have dissolved any real short term notion of ROI. The "slap-and-ship" compliance approach of companies that viewed RFID as just an added cost of doing business with channel masters like Wal-Mart has limited their initial process improvement efforts to minimize costs, as they are waiting for a better ROI capability before investing further. However, this impression that ROI remains illusive for most early adopters is not as yet substantiated by a great deal of empirical
data, because most early adopters are not willing to share their metrics. In fact, regardless of the size of the solution footprint, the RFID market may favor the larger software companies. RFID requires a cross-organizational sales effort, which favors the large software vendors that have established ties to a prospect�s IT organization and have the industry and functional knowledge to sell to other internal line-of-business decision makers. For example, an enterprise with an extensive multi-nodal distribution network and elaborate supply chain infrastructure is more likely to lean toward a mega-vendor, like IBM, SAP, Oracle, Sun, or Siemens Demantic, when incorporating an RFID strategy into its interdependent supply network.
Finally, the push from large initial customers, like Walmart, the Department of Defense, Target, and Tesco, has driven many deployments as their suppliers are eager to conform, which is spurring further maturation of the RFID market and pushing down the cost of RFID systems. Coupled with ongoing technology innovation by the hardware manufacturers, this will open further applications to the market. The vision of ubiquitous, low cost RFID technology has the potential to revolutionize global commerce over time.
(I adopted the overview with some moderations from an analysis done by Technology Evaluation)
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