Issue #192 | May 21, 2009 | by Michael E. Dortch

NEC Corp. plans to start taking orders in July for new RFID tag reader/writers priced at less than 10% of today's prices for comparable systems, according to a May 11 article at the Japanese business news site Nikkei.com. The new systems will be compatible with all major worldwide radio communications standards according to “company sources,” Nikkei.com said.

Unspecified improvements enable NEC to sell its new reader/writers for approximately 10,000 yen each (or just over US$100 at current exchange rates) for orders of 10,000 units or more. Further, NEC “has developed servers and software that can read and write several tens of thousands of pieces of data per second, which it will lease to clients using RFID tags,” Nikkei.com reported.

Nice innovation chops, NEC (assuming that the reports from the usually reliable Nikkei Group are accurate, of course).

My reaction: So what?

All well and good: but until users get a virtual RFID "bill of rights," upheld by every vendor hoping to do business with them, price does not really matter.

“NEC aims to generate 100 billion yen in sales within the next five years (from these innovations),” according to the Nikkei.com article, particularly in the retail sector.

Cheaper and faster is just the sideshow
But cheaper tags, readers and writers, and bigger, faster read volumes, can only go so far. Herewith, a summary of what the savvy users and vendors I've worked with agree is really needed to make RFID a truly significant, sustainable, mainstream set of technologies.

Affordability – of the whole solution, not just the hardware, but especially including integration.

Reliability – as defined and measured by users' business requirements and not just any particular vendor's particular silo.

Interoperability – of solutions with one another and with incumbent IT solutions and relevant processes and operations, as well as “fork-lift-free” integration of all relevant data, technologies, and operations.

Many if not most modern RFID solutions, especially so-called “Gen 2” offerings, are highly interoperable with one another and even other flavors of RFID. The focus here, though, is on easy integration and interoperability with other parts of the IT infrastructure, especially those parts that manage other things and use – or could use – RFID-generated data to improve that management.

As I've said before, the real value of RFID is real-time, fully integrated data.

Scalability of all solutions – both up and down.

Most RFID solutions I've seen can be made larger fairly easily; but true, business-centric scalability is about more than adding more devices to the environment. It is also about being able to grow the deployment without making its management overly complex or expensive, or degrading performance or reliability. And especially in economic conditions like the present, the ability to reduce capacity in straightforward, non-disruptive ways is at least as important as the ability to increase it.

Economic stability and transparency of all vendors – and that includes partners involved in the user's value chain – and an easy, low-cost exit strategy, should a particular vendor or technology go away or cease being appropriate for any reason.

Exit strategies can become even more critical, given the consolidations and other market changes being driven by current economic conditions and that many RFID vendors are privately held, financially opaque, or both.

Even if hardware and software were free and infinitely capacious, unanswered questions about the other above issues would still keep many users away from RFID (and other potentially critical and transformational technologies, such as SaaS and cloud computing). And this is as it should be.

The Bill of Rights
Users, in fact, should treat the above considerations as a bare-bones version of their “bill of rights.” After all, each user's business that lives, dies, or thrives by how well solutions such as RFID actually work to improve agility, competitiveness, and profitability. And helping more users thrive is how technology-centric markets such as that for RFID are grown and sustained.

So whether user or vendor, you and your colleagues should “ARISE” (it's not just an acronym – it's a mnemonic!) and support the above goals, altruistically, pragmatically, cynically, or otherwise. Whatever your reasons, the effects will be a stronger, more vibrant market delivering benefit and value.

Not that I have any strong feelings about these things, you understand...

Michael E. Dortch (medortch@dortchonit.com) is Principal Analyst and Managing Editor of DortchOnIT.com, “an independent voice for technology-dependent people.” He is an IT industry analyst, consultant, writer and speaker based in Santa Rosa, California, focused on translating technologies into business value. His blog can be read at What's Going On Here ‎(Dortch on IT -- an independent voice for technology-dependent people!)‎.