RFID software market due for a shakeout

- Last updated on GMT

Related tags: Rfid

Companies planning to implement radio frequency identification
(RFID) had better keep a good eye on their software suppliers, as
the market and the technology is changing rapidly.

For food processors the changes could result in a more competitive market with a larger number of suppliers of software to keep track of all the data being produced by the technology. Radiofrequency identification (RFID) is a wireless form of automated identification technology.

RFID has long been touted as the future of logistics for all companies by allowing retailers and suppliers to track goods throughout the supply chain. However high prices for tags and systems hasheld enthusiasm at bay despite mandates from retailers like Wal-Mart, which last year announced it would require suppliers to implement RFID. Consumer fears relating to privacy and technical snags,such as the lack of a common standard, have also hurt the adoption of the technology.

A shakeout is due in an industry suffering from the immaturity of the technology, according to a report by ABI Research​. The firm believesmany companies are only now realising that data management is key to the technology rather than the tags and readers, previously regarded as the "business end" of RFID.

"But in reality, the business end of RFID is deep inside the enterprise,"​ the company stated in a release. "The raw data is of little value until put to use in an organisation'soperational machinery. Increasingly, attention is turning to the software that enables RFID data use within the enterprise. New initiatives are flying thick and fast."

ABI believes that the RFID software sector is primed for a shakeout in the coming six to nine months. There will be software updates (known as rollups), acquisitions and consolidation, as the needfor more focused RFID-related programs and applications grows.

Germany-based SAP for example is using its current auto ID software in NetWeaver to push into the RFID market, coming into competition with functions traditionally done by OATSystems, Acsis,Connecterra, Sun, and Globeranger.

In turn, some of the companies are broadening their focus beyond RFID middleware and into data analytics, business intelligence and automation networking.

OATSystems is a good example of this, said Erik Michielsen, an ABI director of RFID. OAT is becoming competitive with some of NetWeaver's functionality as is T3Ci.

Sun, Connecterra, Oracle and Microsoft are all moving into the field according to their respective strengths, he said.

Others, such as Manhattan Associates and Siemens, continue to develop RFID middleware in house, he said. Middleware is the software glue that connects the flow of data from tag to computer.

Michielsen questions their need to keep building closed-system and customized solutions between the RFID reader and the enterprise application integration software.

"I think they would be better off partnering and focusing resulting free energy on services and higher end software,"​ he said.

Related topics: Processing & Packaging

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