RFID markets, increasingly concentrated on the Gen 2 specification, show signs of a healthy transition to the next phase of RFID implementation: full integration at the enterprise level, backed by deep management commitment. When Wal-Mart’s new CEO, Rollin Ford, addressed his troops upon taking office recently, saying, “When Gen 2 was released, we planned to make it our standard at the beginning of the year. We have done that, and I can confirm that we will be sunsetting Gen 1 on June 30.” That kind of dedication is echoed across the range of vertical markets in which RFID plays a role: transportation, pharmaceuticals, retail, consumer goods and defense. What is inspiring it?

ABI Research has released a new market update to its RFID Research Service, according to which the past quarter’s new found confidence stems from two sources: RFID hardware and components and RFID’s assimilation into business systems. Erik Michielsen, the firm’s director of RFID research, points out that for hardware, “Standards and the maturity of the technology are beginning to have a significant effect. Components can now be sourced from a multiplicity of vendors, large and small. Many vendors have already released several generations of products and they are applying the lessons they have learned to each new release.” All this is happening in a standard-driven environment. “Everybody is building around the common ground of Gen 2,” says Michielsen. “Performance, scalability and interoperability are at the core of the new product designs.” He cautions that these factors raise barriers to new component market entrants, driving development of industry- and application-specific environments. At the enterprise level, the platforms that are emerging across infrastructure are also showing sign of maturity. The data collected by RFID has to translate to more effective business processes. Early trials and compliance efforts did not really address those issues. But now, Michielsen observes, “Whether it is the FDA or Wal-Mart or Target or Metro or the Department of Defense, you are seeing commitment that is resonating through the industry: this is something that will be long-term, not short-term.” Michielsen dismisses reports of an industry slowdown: “It is just that buying cycles are being extended,” he says. “Companies are planning RFID and setting capital expenditure budgets with a longer-term mindset.”