RFID Integration Services Revenue to Surpass that of RFID Hardware by 2007

As supply-chain-based RFID tags, readers, software and electronic product code (EPC) guidelines rapidly adapt to meet large retailer mandates, tying together the increasingly complex solutions becomes a larger challenge. Larger hardware and software spends require heavy reader, software and system integration service investments. To date, integration has been a secondary concern in RFID planning. This is rapidly changing as consumer package goods (CPG) and retailer RFID integrator staffing demands will skyrocket over the next five years. According to technology research firm ABI, RFID integration revenue will surpass that of RFID product revenue by 2007.

Full-scale RFID rollouts will likely be an extension of the early stage compliance level solutions put in place for the 2005 Wal-Mart, Metro-AG and Department of Defense (DoD) deadlines. As these systems are extended further into event and workflow management, RFID solutions will need to adapt to legacy IT and logistics settings. Warehouse management software (WMS) and supply chain execution (SCE) companies are all actively extending their logistic solutions to incorporate RFID. Moreover, according to ABI’s report, enterprise software and systems giants IBM, Oracle, SAP and Sun are also working on building RFID into existing suite offerings.

Incorporating RFID into existing IT and logistic infrastructure affects multiple business processes and areas. “Larger RFID solutions aim not just to track out-bound Wal-Mart or Tesco inventory,” explains ABI senior analyst Erik Michielsen, “but also to create real-time visibility tracking, from customer through the warehouse domain and into the enterprise IT systems. Any changes to existing enterprise systems require architectural mapping, system programming and testing, and company-wide change management implementations. Companies with deep experience in this space are increasing their focus on RFID, but have a long way to go to meet staffing needs that will support an RFID supply chain integration market that will surpass $1 B by 2006,” adds Michielsen.

The new ABI report, “RFID Integration Service Markets: Meeting Demand for Reader, Software and System Integration Solutions,” dissects the integration service challenges CPG and retailers face in pursuing networked enterprise-wide RFID solutions, and how companies are developing RFID products and services to address these issues. For more information on this study, please visit http://www.abiresearch.com/reports/RIN.html.