A different approach: RFID integrators need to start understanding business processes

-- Manufacturing Business Technology, 1/23/2008 12:31:00 PM

Only a couple of years ago, companies specializing in RFID integration services could succeed by offering specialized knowledge of how RFID technology worked—or in some cases didn’t work. Today, RFID works well out of the box, and according to a new study from ABI Research, it is time for RFID integrators to think about repositioning themselves.

Principal Analyst Pete Poorman explains, "While the opportunity is still there for technology specialists, the market is evolving such that increasingly they must deeply understand some specific application. RFID systems integrators can still do business today as boutique specialists, but they need a strategy to expand their value proposition. The vendors profiled in our new report all have such strategies."

A common approach is to address a particular well-understood vertical market. An example of a company following that strategy is CACI International.

CACI has one customer, the U.S. government—in particular its military branches. With that tight vertical focus, it has the insight and the appropriate knowledge, and can "talk the talk" as required.

Another strategy is to augment services with packaged product offerings, as RFID equipment increasingly obviates the need for deeply-technical integration services. High-profile vendor Xterprise appears to be choosing this path.

Still other vendors are doubling down on their technology expertise. This involves repositioning themselves from being frontline solutions providers to taking a second-tier role. "Companies choosing to remain technology-focused are looking to channels to provide the deep vertical market knowledge," says Poorman. One example is Intermec, which has packaged its full suite of RFID integration services for delivery through channels.

Whatever formula is chosen, says Poorman, the key message to RFID integrators is, "You can't stay where you are: the highly valued technical knowledge you deliver today will become more common as time passes and, ultimately, be embedded in products. Your services offerings must adapt to this market change."

The ABI Research study can be found here: RFID Integration Services Markets.

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