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Early adopters of radio frequency identification (RFID) are bargain hunting for specialized vendors to meet compliance deadlines, but major software vendors like SAP will likely be the choice once the technology matures, according to a report from Boston-based AMR Research Inc.
Price continues to be a major factor for companies with initial RFID deployments, said Dennis Gaughan, a research director at AMR Research in his report, "Making RFID middleware decisions in a changing marketplace."
"Early RFID adopters are struggling to find the balance between low-cost deployment and long-term investment protection," Gaughan said.
Early adopters will explain the challenges and pitfalls to be avoided when deploying the technology at the RFID Journal Live conference April 10-12 in Chicago. RFID experts, best-of-breed vendors and major software makers like IBM, Oracle and SAP will also have a presence at the three-day conference.
SAP, which was among the first major software vendors to begin RFID piloting projects with its customers, has been working to encourage companies to adopt RFID technology. It teamed up with Intel Corp. last month in an initiative the companies said would make the technology easier to adopt. IBM and Oracle are also touting RFID deployment packages that include a mixture of software and services.
IBM, Oracle and SAP are also partnering with the major best-of-breed RFID specialists. OatSystems and ConnecTerra, both based in Massachusetts, and Texas-based GlobeRanger, have been the RFID specialists of choice by early adopters deploying the technology, according to AMR.
"RFID specialists have used their knowledge of this technology to create an early lead in the marketplace," Gaughan said. "The larger infrastructure and application vendors also see the opportunity and are moving in fast to develop the expertise and provide products for their customers."
Companies responding to mandates from Wal-Mart and other major retailers are facing a number of issues. In addition to deploying the physical tags on cartons and palates in the warehouse, companies have a variety of options when choosing the software to integrate the data to internal systems.
RFID middleware connects the supply chain data collected by tag readers to a company's applications. Once the data is collected, business intelligence tools can help analyze the information to give more visibility of the supply chain.
Gaughan predicts that the market for RFID middleware will experience consolidation. Once early adopters begin broad, integrated deployments of RFID over the next several years across their supply chain, larger software vendors like SAP, Oracle and IBM will provide software and services for the projects."The enterprise application vendors could also make some acquisitions to try and further secure their position of strength in the warehouse," Gaughan said.