RFID in 2010: Will Anyone Care (Who Doesn’t Work for an RFID Company, That Is), Continued!

Wanna start some static? Tell people with a vested interest in a particular technology-centric industry that you fear users won't care about it after next year.

Want a specific example? How about, oh, I don't know -- RFID?

On Nov. 30, I posted a Brief at Focus, where I work, entitled "RFID on 2010: Will Anyone Care (Who Doesn't Work for an RFID Company, That Is)?" You can read the whole thing at http://bit.ly/RFIDin2010. Here's an excerpt.

"If significant improvement in integration and simplicity does not pervade the RFID industry throughout 2010, that year could be the last one in which very many people outside of the RFID community care anything about RFID. And indicators to date are not promising. ...Granted that the current worldwide economic unpleasantness has not helped. But there is still ample circumstantial evidence to cause concern about the future of the RFID industry. Those concerned should be watching developments throughout 2010 very closely – to decide whether to continue doing so or not in 2011 and beyond."

Well, I got comments almost immediately. Some excerpts of these follow. "Michael, good piece and perhaps a wake-up call for the industry," said Mark Roberti, founder and owner of "RFID Journal." "RFID needs to be simpler to deploy and more focused on complete solutions," he added.

"Your article is a little bleak but I understand the point that RFID has seen a lot of unfulfilled potential," Kurt Mensch, Principal Product Manager at Intermec, a vendor that I think "gets it" where RFID is concerned. "I think we'll see a lot more collaboration in the coming years with more focus on the business benefits and less focus on the 'feeds and speeds.'"

There's more, but I think you get the idea. If you have any interest in RFID at all, please go to http://bit.ly/RFIDin2010, read my Focus Brief, then post some comments, and let's make some more discussion happen. Maybe we WILL wake someone up!

Happy 35th Birthday, Bar Codes! :-)

Not everyone gets a mention in The New York Times when they turn 35 -- but neither everyone nor everything is, as the Times put it, a "game changer in retailing" and elsewhere, as the bar code has definitely been.

It's a pretty interesting article, with recollections from the now-retired IBM engineer who led the development team. But perhaps the most interesting parts (which were cut from the version run in the San Francisco Chronicle the day after the original Times version) discuss RFID, in particular the Wal-Mart mandate and how its suppliers pushed back. "A Wal-Mart spokesman, John Simley, acknowledged that 'we hit realism' after the initial surge of 'media-generated hype' for RFID in 2003. But he said Wal-Mart continued to introduce the technology," the Times article said. "Bar codes have evolved to respond to the competition," the article added.

Indeed. Today, several vendors are selling both 2-D bar code and RFID technologies, and making more money on the former. One wonders if and when modern RFID solutions will be similarly celebrated in the mass media upon some noteworthy anniversary. We can but hope...

Imitation Being the Sincerest Form of Flattery...

...I am borrowing an idea from my former Aberdeen Group colleague and the coolest enterprise mobility analyst I know, Philippe Winthrop, an analyst at Strategy Analytics and the guy behind the most excellent blog "Enterprise Mobility Matters." In his recent posting, "Fireside Chats on Enterprise Mobility," he describes a nifty interviewing methodology he's introduced at his blog.

Quite simply, I'm borrowing -- NOT stealing -- and adapting it for those of you interested in RFID. (At MIT, where I went to school, they said MIT students never lie, cheat or steal -- they elaborate, collaborate and borrow.)

I'm starting to e-mail questions to some of the people I believe to be the leading lights in the industry, and will share my questions, their answers, and my reactions to them with you here. So stay tuned, and send suggestions for interview subjects and questions you'd like to see them answer. Meanwhile, thank Philippe for me, should you see him or visit his blog, which I strongly urge you to do!

What if RFID Hardware Were Free?

According to a May 11 article at the Japanese business news site Nikkei.com (registration and paid subscription required; free trial period available) NEC Corp. plans to start taking orders in July for new RFID tag reader/writers. The new systems will be compatible with all major worldwide radio communications standards, and priced at less than 10 percent of today's prices for comparable systems, according to “company sources,” Nikkei.com said.

Unspecified improvements in semiconductor design and manufacturing techniques enable NEC to sell its new reader/writers for approximately 10,000 yen (or just over US$100 at current exchange rates) each for orders of 10,000 units or more. Further, NEC “has developed servers and software that can read and write several tens of thousands of pieces of data per second, which it will lease to clients using RFID tags,” Nikkei.com reported.

“The company aims to generate 100 billion yen in sales within the next five years by selling the reader/writer and leasing servers and software,” according to the Nikkei.com article. The report adds that NEC plans to focus on growing RFID use beyond traditional supply chain and asset-tracking applications, particularly in the retail sector.

Two reactions.

Reaction One: Nice innovation chops, NEC (assuming that the reports from the usually reliable Nikkei Group are accurate, of course).

Reaction Two: So what?

Cheaper tags, readers and writers and bigger, faster read volumes can only go so far. (This is a lesson being learned by many RFID vendors even as you read this. And that includes at least some of those pursuing the “RFID as a service” go-to-market approach, where they own and manage the infrastructure and users pay monthly usage fees.) The savvy users and vendors I've worked with agree about what's really needed to make RFID a truly significant, sustainable, mainstream set of technologies. Herewith, a summary.

Affordability – of the whole solution, not just the hardware, and especially including interoperability and integration (about which more just after the next item).

Reliability – as defined and measured by users' business requirements and not just any particular vendor's particular silo.

Interoperability – of solutions with one another and with incumbent IT solutions and relevant processes and operations, as well as “fork-lift-free” integration of all relevant data, technologies, and operations.

Scalability of all solutions – both up and down.

Economic stability and transparency of all vendors and partners involved in the user's value chain – and an easy, low-cost exit strategy, should a particular vendor or technology go away or cease being appropriate for any reason.

Even if hardware and software were free and infinitely capacious, unanswered questions about the other above issues would still keep many users away from RFID (and other potentially critical and transformational technologies, such as SaaS and cloud computing). And this is as it should be.

Users, in fact, should treat the above considerations as a bare-bones version of a “bill of rights” they deserve to have upheld by every vendor hoping to do business with them. And vendors should consider them the minimum buy-in required to gain and keep users' business and trust. Because it's each user's business that lives, dies, or thrives by how well solutions such as RFID actually work to improve agility, competitiveness, and profitability. And helping more users thrive is how technology-centric markets such as that for RFID are grown and sustained.

So whether user or vendor, you and your colleagues should “ARISE” (it's not just an acronym – it's a mnemonic!) and support the above goals, altruistically, pragmatically, cynically, or otherwise. Whatever your reasons, the effects will be a stronger, more vibrant market and more solutions that actually deliver benefit and value – and that actually sell.

Not that I have any strong feelings about these things, you understand...

Are Your RFID Vendors in Trouble? And If So, What Can/Should You Do?

So what do green energy, software as a service (SaaS), radio frequency identification (RFID), and their offshoots and affiliates all have in common as industries or markets?

Two things, for the purposes of this particular rant.

Thing the First is that they were all predicted as recently as the end of 2008 to be some of the few areas that were likely to weather what was (apparently) seen by many (but not everyone) then as a looming but temporary economic...unpleasantness.

Thing the Second is that given the significantly more robust and sustained nature of said...unpleasantness, all three of arenas are facing significant, sustained challenges. In many cases, these challenges are life-threatening to at least some companies – and unspoken of by almost all of them, especially those not publicly traded and therefore compelled to make at least some financial disclosures.

Now, it's not lost on me that among SaaS companies, Salesforce.com is not only a market leader and publicly traded. According to its most recently disclosed financial information, while challenged, it is not in any real, imminent danger. (As I expected during the recent media mini-furor over whether or not SaaS was going to make it, or something like that.) I worry far more about the ecosystem of smaller and emerging SaaS, RFID, and related suppliers, including some of RFID's better-known names.

I especially worry when I see no recent announcements of major customer wins, or even significant pilots. I also worry when I see no announcements of strategic alliances – or see what are touted as such, but that include no laudatory statement from any senior executives from the supposed “strategic partner.”

I'm not sayin'. I'm just sayin'. (If you want to see such an announcement done right, check out Fluensee's recent BMC integration announcement -- and I'm not just saying that because I'm quoted in it.)

Green energy is not one of my core strengths, so I'll leave that to others more expert and focused than I. (I would But where SaaS and RFID are concerned, well, I'm concerned. And I'll have more to say about both Real Soon Now. Meanwhile, though, if you don't have them in place yet, craft, execute, and enforce some effective, protective, and business-driven service level agreements (SLAs) with every SaaS or RFID vendor or reseller critical to your business. And keep close tabs on the financial health of those vendors. To the extent that such tabs are possible, at least.

Fluensee Brings RFID to BMC -- a BFD! ;-)

Fluensee, one of my favorite RFID vendors, has announced integration of its AssetTrack solution with BMC Software's Remedy Asset Management Solution. The result: more automated, efficient, and effective tracking of RFID-tagged IT assets, which means greater efficiency and security for enterprise IT resources. Companies that know where their IT assets are can assign and move those assets around in response to changing business needs more effectively, inventory them more quickly, and perhaps avoid buying more of them than necessary.

In case you were wondering, Dell, HP, IBM, and other IT vendors are increasingly offering RFID-tagged server blades and other IT infrastructure components. This is precisely the kind of integration I've been blathering on about for months now, when I talk about RFID's real business value as a source of real-time, fully integrated data. In this case, the data's about IT assets, but once the integration floodgates open, it doesn't take a rocket scientist, or even a semi-cranky industry analyst, to see more potential. And the more things I can manage more effectively from the same tool or platform, the more business value I get out of that investment as well.

This isn't the first integration of RFID with IT asset or infrastructure management, and if the vendor community is anywhere near as smart as I dare hope, it won't be the last. It's an important one, largely because of the fairly large marketplace footprint of the Remedy family of products. But with RFID, IT asset management, and IT infrastructure management all evolving rapidly, and increasingly being augmented by software as a service (SaaS) alternatives, the game will continue to change, and will definitely be worth continued watching -- and not just by me, BMC, and Fluensee...

The New RuBee Standard: A Win for Everyone, Including RFID Vendors and Users...IF...

RFID has many advantages, but suffers from some key disadvantages as well. RuBee, a conceptually similar but technologically different tool set, is seen by many as an alternative to RFID that offers greater security and higher performance in harsh environments.

These are good things. But RuBee had not been based on any widely adopted industry standards. Until now. The Institute of Electrical and Electronics Engineers (IEEE), “the world's largest technical professional society” and heavy hitters in the IT standards world, just announced approval of IEEE 1902.1, its “Standard for Long Wavelength Wireless Network Protocol.” The standard improves upon RuBee as implemented to date, in part by supporting an addressing scheme much like that used by the Internet Protocol (IP) and World Wide Web. Compliant networks can be managed with simple, inexpensive hardware, and properly configured RuBee tags can be searched for and monitored over the Internet using already familiar search engines.

So RuBee is poised for broader and rapid adoption by hardware and software makers seeking markets beyond RFID, which has not yet created any generators of sustained high profit margins and revenues that I can find. (But that's a separate discussion – one which I intend to start right here very soon.) The next two immediate challenges, then, are these.

1. Can the nascent RuBee industry resist the admittedly strong temptation to position RuBee primarily or exclusively as a competitor to RFID, instead of something to be considered and deployed both instead of and alongside RFID? If so, then RFID users and solution providers will be more likely able to leverage their experiences, best practices, and incumbent management solutions while embracing RuBee, to the benefit of all. If not, well, it'll be a lot like HD-DVD versus Blu-Ray, or Beta versus VHS all over again, to no one's benefit.

2. Can the RFID/RuBee /“visibility network”/sensor-based network community/communities and markets focus on the high-level business benefits users seek when deploying RFID, RuBee, or almost anything else related to visibility of and knowledge about business-critical assets? If so, then RuBee offers users and solution providers new opportunities for success in everything from integration of RFID and RuBee tag data with key operational applications to RFID- and RuBee-enabled and -aware IT infrastructure management solutions and services. If not, well, it'll be a lot like the examples cited above, and again, to no one's benefit.

Back in 1996, I wrote and designed my first ad for a major industry publication (Computerworld). It was promoting the fact that AIM Technology, a provider of independent system performance benchmarks and bestower of the annual “Hot Iron” Awards, was for the first time honoring systems running the then-new Microsoft Windows NT server operating system, as well as those running UNIX. My ad idea? A slice of bread split down the middle, with peanut butter on the left side and jelly on the right. The headline read “Can you imagine peanut butter versus jelly?” The copy argued that while much press and vendor hoopla focused on Windows NT-UNIX “competition,” the fact was that users were succeeding with IT environments that included both, because each did different things really well.

RFID, RuBee, and their coming successors are now exactly like Windows NT and UNIX were then. If solution providers, systems integrators, vendors, their partners, and the punditocracy stay focused on what users care about – using the best technologies to track what they care about and improve business processes – there will be more than enough market potential to go around. Otherwise, RuBee will quickly become as relatively marginalized and financially lackluster as RFID has been to date in too many market segments. It's up to us – and in the spirit of the recent presidential election here in the U.S., the RuBee standard is a potential clarion call for “change we can believe in.”