RFID Roundup

The view of the RFID market from the vantage point of Q2 2006 is notably more optimistic than prognostications in early Q1, according to Oyster Bay, N.Y.-based ABI Research and Framingham, Mass.-based IDC Manufacturing Insights.

Chief reasons for the altered projections include release of Gen 2 tags, with RFID tag prices nearly halved from a year ago, according to ABI. Also, item-level tagging projects beyond the mandates are increasing, says IDC.

"Companies are finding business cases that have value propositions for RFID utilization other than retailer mandates," says Mike Witty, Manufacturing Insights program director. "In automotive, chemicals, consumer electronics, and as with other high-value items, RFID adds value by tracking assets, improving supply chain efficiencies, and increasing visibility," he says. This includes item-level tagging of expensive products for internal store tracking, which prevents inventory shrinkage due to employee theft.

Microsoft recently announced a wealth of partnerships surrounding development of the BizTalk RFID infrastructure, which allows users to incorporate RFID information and data into various applications and end-to-end business processes.

First off is Printronix, with its intention to enhance device management in BizTalk RFID—a follow-up to its donation of printers in the development stage. Says James B. McWilson, senior VP, Printronix, "Microsoft has used its vast technology expertise and developer network [to deliver] an innovative platform for optimizing RFID technology to create greater supply chain efficiencies."

Intermec's RFID team also worked with Microsoft to test and refine BizTalk RFID. The plug-and-play functionality in BizTalk makes it possible for devices such as Intermec readers and printers to integrate with third-party applications and processes. "Through our ongoing work with Intermec, BizTalk RFID will help make the development and management of RFID-based data and processes easier and more cost-effective," says Burley Kawasaki, group product manager, Microsoft. "Intermec and its experts helped us bring RFID out of the lab and into the enterprise."

Symbol Technologies is doing customer trials of its Device Server Provider Interface, which connects Symbol's XR400 RFID reader series to BizTalk RFID, allowing users to focus directly on the business analytics that RFID can enable.

Symbol's XR400 RFID reader integrates high-performance reading capability with a high-speed Intel processor, extensive memory, and a Microsoft Windows CE-based programming environment for an easy-to-use application processing platform. These capabilities enable organizations to make real-time business decisions based on data and business processes.

Finally, Alien Technology and Microsoft will offer implementation support for mutual customers and industry participants at the recently opened RFID Solutions Center in Dayton, Ohio. Microsoft will equip the center with the latest versions of Microsoft BizTalk RFID software.

"Working closely with Alien and the other leading companies affiliated with the center will enhance our ability to drive customer value by connecting RFID devices with back-end systems, data, and business processes," says Kawasaki.

Alien Technology, an RFID reader-and-tags high-flyer, filed its S-1 form with the Securities and Exchange Commission (SEC) on April 13 in anticipation of a pubic offering of stock. The company has no shortage of cash infusion, receiving $100 million-plus in venture capital since its formation in 1994.

"It reflects the continuing evolution of the market and it will be positive for the overall industry," claims Jeff Woods, research VP at Stamford, Conn.-based Gartner Group, but he says there are caveats.

"Its numbers aren't all positive," Woods asserts, with Alien posting a $53-million operating loss in 2005. "Many will question why it isn't a bigger vendor, being one of the 'lighthouse' vendors in the market. The move also will subject them to quarter-by-quarter scrutiny of operations, which will be difficult for them to manage."

Nevertheless, there is clear investor interest in RFID. "It's reasonable to conclude that among other private RFID companies out there, other IPOs filings will follow," says Woods.