Issue #218 | Dec. 17, 2009 | by Andy Kowl

"As 2008 draws to a close the world's future seems dark or, at the least, uncertain," I wrote one year go on RFID Street.

As recently as May, readers agreed when we wrote, "Let's face it, in October business came to a crashing halt. Not the RFID business; every business. The Big Pause. Nobody was allowed to spend money. For anything. So the big question (is) have we come out of it yet, or will we soon?"

During the second and third quarters, not many RFID sellers on the Street felt solid ground beneath their feet. Companies were still getting their bearings. Lord knows we were, here at Next-Tech Markets.

Everyone believed all the analysts' reports that the RFID business grew in 2009, a couple even felt it. The consensus was this growth analysts reported was just graphs on paper. Asian transit systems buying HF fare cards and the Chinese purchasing identity cards was not something the majority of companies benefited from.

Now the industry consensus is clear: 2010 will be a banner year for RFID, the recession be damned. Not just on PowerPoint slides—in more widespread revenue.

RFID has survived, even prevailed, according to industry players
After we casually began hearing widespread positive news over the past couple of months, we spoke to a wide variety of RFID industry members to learn the prevailing reality. We found a solidifying of belief that recent positive signs are not passing illusions.

"RFID was surprisingly good, a lot better than we expected," according to Dan Miller, who as RFID program manager at distributor BlueStar, has a ringside seat to hundreds of different IT sellers. "It was up about 33%," he said, mentioning the Impinj Speedway Revolution reader as "a great new product which drove growth across the board."

"The industry as a whole did well," in the view of Chris Warner, Motorola's senior RFID product marketing consultant. Chris skips a beat to add, "Considering."

"2009 was a year of tightening up, buckling down; companies were not about taking on major new projects." Yet in this environment, Warner said, "some majors were getting their feet wet, especially in retail." Motorola is seeing initial implementations for phased operational deployments in various areas, "and a lot of traction in 'the traditional' markets of warehouses; forklifts.

"Then there are the slam-dunks, like RTIs (Returnable Transport Items)," Warner brightens at the thought. "Carts, bins, trolleys. . . in a closed-loop system, quick ROI is easy.

"Doing more with less; increasing automation; improving efficiency; and reducing your labor needs to stay Lean," Warner points out is an obvious formula for success. This bore out what we wrote immediately after The Crash. "In a recession what would you rather sell than cost saving solutions?"

A more representative comment was that of Frank Shirmo, COO of Maryland innovators Airista. "It was an okay year. I'd be lying if I said it was a great year. But there were definitely some good acquisitions and implementations." Markets in which Airista saw solid activity included a sweet spot of theirs, corrections institutions. Of the verticals they freshly targeted, Healthcare was the clear winner.

Alien Technology "started to reach the point (they were at) a year ago" when they broke company sales records. After what started as "a tough year," according to Victor Vega, they had ups-and-downs; but approaching record levels in Q4 is a good capper. They saw "reader quote activity mid-year that was incredible," not just "nice sized" RFPs, they were "extraordinarily high orders; record quotes." Closing a couple of these would make for a strong start in '10.

Many hopeful signs
It was not easy, not for anyone. Some RFID companies were caught in the inevitable shake-out which the economic meltdown exacerbated. Overall most players are still here a year later, though the Darwinian shake-out all maturing industries go through is not done yet.

"It's not a question of 'how far?' or 'how fast?' anymore," remarks Motorola's Warner. "The product set is here. If you think about it, RFID may turn out to be the technology that thrives in times of limited operational investment"

New solution providers are getting involved. BlueStar's Miller said, "a lot of VARs new to RFID were jumping in."

We spoke to many people not mentioned here and got many supporting stories. Simply RFID has seen strong sales growth and Stratum Global reports "a crazy good" Q4. Ekahau used the year's slow spots to position themselves for next year. Even ABI Research now reports half of all RFID buyers are increasing their 2010 budgets.

Have we heard a couple of sad stories? To be sure. Let me assure you that as tough as it has been for anyone to close technology sales, you would not have wanted to be selling advertising.

RFID veterans are often so cynical I've witnessed some turn a blind eye to legitimate buyers lacking gold-plated credentials. So when other hardened RFID-sellers told a good number of stories I cannot share about huge deals in the works—at least it tells us there are serious buyers in the hunt.

As we said last year:
The economy may be battered; but it is not defeated. It cannot be vanquished, because people like you and me have never stood for such nonsense.

Whether with RFID or other emerging information technologies, at the core of all this is enabling your organization to distribute data as if it is, well, the 21st Century. . . . technology to be safer; to enable real time inventory; to prevent waste and save energy. . . If you are not considering every option to make your operation better, what are you thinking?!

We are lighting the menorah; the Christmas lights are going up and RFID Street is closing for the holidays. Tune in January 7th for Part 2: 2010 predictions