Forrester Research looks to be the first company to compare and rate the main RFID middleware providers, in a research report just out.

Their conclusion? Companies looking for a middleware solution need to do a lot of careful shopping. The providers out there all have very different capabilities and strengths. No single solution fits every situation.

Forrester looked at 13 different providers, ranging from very large enterprise system companies such as Oracle, to specialized RFID providers such as OatSystems. Here are some of the main takeaways from the report:

• The market is extremely early for RFID middleware. As a result, this market space is seeing rapid product development cycles, sometimes as short as 3 months.
• When evaluating RFID middleware, companies should take into account the data integration systems they currently have. With RFID middleware you are not buying a complete packaged solution, but rather, building a software infrastructure. Companies may already have data integration applications that can be used for part of the solution.
• Early adopters and those under a mandate should look at the "RFID pure plays" like Manhattan Associates, that currently have true RFID products with connectivity to RFID readers. The downside is that these companies don't have long proven track records, possibly having just a few pilots under their belts.



• Companies evaluating RFID for the long term should look at the big players, like IBM. Most of the big providers don't have true products on the market today, but instead are filling in gaps in their product offerings with a lot of customized services. While today they may lack pieces/parts (e.g., good connectivity to RFID readers), eventually they will catch up and overtake the early companies because they offer scalable solutions and better data integration capabilities.

If you have the time, download and listen to the Forrester MP3 audio report overview here (about 7 minutes long).

Link to report summary here.

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RFID in Japan reports that a fishery association in Japan is tagging shellfish to prevent theft from a protected fishing area:

Awabi, expensive shell fish, is one of the first kinds of fish to be RFID'd. They plan to tag all legally caught Awabi. Their theft prevention scheme is fairly simple -- if you find "Miyagi Awabi" without an embedded RFID tag, it is either caught illegally or fraudulent fish that was caught somewhere else.

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As more data becomes available through RFID, the nature of ERP systems will have to change.

A paper by Professors Edmund W. Schuster and David L. Brock of MIT, offers a future prediction about how enterprise resource planning systems will need to evolve to deal with all the data collected through RFID:

...[C]omputer science researchers have conceptualized a new type of information technology infrastructure that meets the challenge of real time information and unique identification. This type of infrastructure aims to link physical objects to a network, like the Internet, with RFID technology. There is no question that this new infrastructure will radically change the nature of ERP systems with the result being an order of magnitude increase in productivity. Traditional forms of delivering information technology, such as dedicated software packages that require strict adherence to predetermine ways of planning, will yield to repositories of "software agents" such as planning and scheduling models that will be combined as required to meet the needs of existing organizational processes. This will result in a truly intelligent infrastructure that will allow great flexibility in collecting data through RFID technology and the matching of relevant models to the data at hand.

Such a system is only possible through development of open standards and protocols for collection, sharing and matching data to models. Without a system based on open standards, interoperability will not be possible and the economics of building suitable interfaces will overwhelm the economic value of the new infrastructure.

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Entrepreneur Magazine says that small businesses will be reading a lot about RFID in 2005, but not actually adopting it until a few years following that.

I'd say that pretty much sums up the picture for most small businesses -- they will not be customers for RFID anytime soon. RFID is one of those technologies that will be adopted first in the largest companies and slowly trickle down market.

Right now the average small manufacturer or retailer can't justify the business case for adopting RFID in its internal processes or supply chain. The cost of implementation is still too high. It's not just the tag price, it is the cost of the entire implementation that adds up: tags, readers, testing and evaluation, worker training, data systems re-work, etc. Also, the smaller the business, the less it has to gain in supply chain efficiencies and reduced costs through RFID tracking. So until the cost drops, RFID doesn't make sense for the average small business.

And then you have the normal small-business behavior when it comes to any new technology. I've written about this many times over at my Small Business Trends blog. Aside from the early adopters, most small businesses wait to implement new technologies until they are mistake-proof, with near plug-and-play ease to install, and after prices approach mass-market levels. In other words, most of the risk has to be driven out first. Small businesses can't afford to take technology risks.

Of course, there are some notable exceptions. For instance, some small-to-midsize suppliers may be snared in the net of Wal-Mart and DOD mandates, and have no choice but to implement RFID sooner.

RFID in animal tracking is another area of interest right now to small businesses. RFID-enabled systems are being actively marketed to small livestock producers and veterinarians.

But on the shop floor, in the warehouse and in the showroom of the average small business, RFID is still rare and will remain so for the next few years. However, savvy small business executives will be educating themselves today for the future.

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Pharmaceutical companies will be using more RFID than the consumer packaged goods industry in 18 months. That's according to a Meta Group study, as reported in Information Week.

Now this is a pretty dramatic prediction. Yet, the interesting thing is how less irrationally exhuberant this report is than some others. For instance, this report suggests the U.S. FDA was overly optimistic when it predicted a few months ago that most drugs would be shipped with RFID tags at the case and pallet level within 3 years.

It'll be an interesting exercise 2 years from now to go back and read some of the early research reports. I expect we'll chuckle over some of the more optimistic predictions.

Not that I think RFID won't take off. It will. But market-shifting technologies always take longer than you think.

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As pointed out before in this blog, the RFID patent situation is messy.

But some steps are being taken to clarify the patents situation.

One of the largest holders of RFID patents, Intermec, recently announced the conditions under which it will license its intellectual property.

It all relates to EPCglobal's work to establish EPC standards. As it establishes standards, EPCglobal wants to ensure that proprietary patent rights don't get in the way of growing the RFID market and unfairly enrich one company at the expense of others. As the RFID Journal reports:

Under EPCglobal's IP policy, which all EPC subscribers must sign, companies holding IP they believe is relevant to EPC standards must declare their IP and indicate whether they will make it available to other vendors on a royalty-free or a reasonable and nondiscriminatory (RAND) royalty-bearing basis.

Intermec announced that it will make 5 patents available royalty-free. Another 14 would be made available on a RAND royalty-bearing basis.

EPCglobal now has the option to go back and revise its proposed standards to remove elements that relate to Intermec's IP, if it thinks Intermec's licensing terms would be too restrictive, etc.

The industry is at a critical juncture right now that will shape its future. Clarifying the patents situation and keeping EPC standards as free and unrestricted as possible is key to growing the RFID market. Read the entire RFID Journal article - it has lots of detail.

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Here in the United States you can't turn on a news show without seeing a segment on the lack of security in shipping containers.

ABI Research has just issued a report suggesting that RFID is one of several technologies that can be employed to improve container security:

Over 20 million freight containers are currently circulating the world with about seven million of them passing through U.S. ports every year. Surprisingly, only about 2% of these are physically inspected. Security experts have warned of doomsday scenarios involving unchecked containers that may harbor terrorists, explosives, or other hazardous materials.

The good news is that enhanced container security methods, based on technologies such as RFID, cellular and satellite communications, are on the way. These technologies also promise substantial commercial benefits from a supply chain and enterprise resource planning (ERP) perspective. Depending on the technology and application, electronic tracking can not only log a container's movements around the world (sometimes in real-time), but can also alert administrators that, for instance, a container was opened without authorization.

Don't hold your breath, though. The new tracking technologies aren't expected to be widely used until the end of this decade.

For more information about the report, including the table of contents, see the ABI Research site.

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McDonald's is going to be piloting a new MasterCard wireless credit card system using RFID. McDonald's customers can use the special MasterCard PayPass card to charge purchases to their MasterCard account. They simply will wave the MasterCard in front of a special credit card reader by VeriFone Inc.

This news tidbit is getting headline attention, but it is not a very new idea.

Mobil gas stations and other retail outlets in the United States have been using the SpeedPass system for several years now. SpeedPass is a small gadget that contains an RFID chip and allows the user to pay for purchases by simply waving the SpeedPass wand in front of the RFID reader at the point of sale. SpeedPass was even trialed at over 400 McDonald's restaurants in the Chicago Illinois area. See my earlier article on the SpeedPass.

Perhaps the new part is putting the RFID chip directly on a MasterCard credit card -- which suggests that RFID on credit cards may be going mainstream.

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Part of the reason for so little RFID industry sector coverage by stock analysts is that while the technology has been around for decades, it is only recently that RFID has begun to get wide-scale interest from the business community. That's due mainly to RFID mandates by Wal-Mart, Tesco, and the US Department of Defense, which have forced companies to start adopting RFID technology.

Despite all the recent interest, in the opinion of some it still may be years before the RFID sector hits its stride for purposes of stock investing. See, for instance, this article in The Street.com.

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