Issue #219 | Jan. 7, 2010 | by Andy Kowl

The industry consensus is clear: 2010 will be a banner year for RFID, the recession be damned. Not just on analysts' PowerPoint slides—but in more widespread RFID implementations and usage.

That's where we left off at the end of '09 in the first part of this report on our unscientific survey of RFID companies. Since the opening bell of the new year, subsequent conversations bear this out. Some of us are feeling beaten up by the past year, but the optimism and encouraging news was unanimous among a couple of dozen companies.

A key differential we heard which supports the bullish outlook is a greater understanding of asset tracking on the part of end-users.

As George Carlin told us, everyone likes knowing where "their stuff" is. But let's face it, after waves of Lean and JIT and Six Sigma, logistics managers can be excused if they wondered just how perfect an operation can get. To further muddy the waters, just as RFID was touted as the next great efficiency, a quasi-universal sense that this only related to Walmart caused great confusion.

Finally, as RFID's slump was ending, the worldwide economic debacle hit like a tidal wave.

New foundation of market knowledge?
Now across the board, according to auto-ID professionals we spoke to, buyers get it. "The majority understood what it is they expected to get from RFID deployment," says Frank Shirmo of Airista. "The same when it comes to asset tracking with Wi-Fi RTLS." Other respondents were in agreement.

This existing knowledge was not nearly as prevalent a mere 18-24 months ago, according to our reporting.

"We can only improve what we know; and we can only know what we see," is Douglas Bellin's mantra, industry lead at Cisco Systems. A story he told us shows why asset tracking is getting a good rap as a cost-saver.

"The plant had 15 forklifts and was deciding whether they needed three or four more. After tracking actual usage and mapping the hotspots, they reduced to 10 forklifts."

Customer demand was the chief factor luring more VARs into selling RFID, according to Dan Miller of distributor BlueStar. Boding well for 2010, "We see a lot of options as some of the smaller programs (our channel partners installed) are turning into larger programs."

"We're pretty bullish and will be aggressive in 2010," says Chuck Thompson, VP of sales and marketing at Rush Tracking Systems. "There will still be a different climate; but companies are restructuring to take more cost out of their business, to eliminate redundant costs." Rush, an RFID implementation leader, was recently acquired by new owners who think now the time is ripe for expansion.

"These are exciting times for us," is how Motorola's Chris Warner sees it. Starting with deployments that were just in the early stages prior to the ball dropping in Times Square, they see growth for '10.

In particular, Warner expresses "real strong optimism in the retail market." He can only say at this point that certain retailers "want to prove their internal numbers" before announcing major new implementations.

Filling the pipeline
I'm also sworn to secrecy by Alan Neves of Vanguard ID Systems. If you know Alan, even he wouldn't blame you if you suspect him of being an overly optimistic guy. But if current negotiations bear fruit for this Pennsylvania auto-ID card manufacturer, the results could have great impact as harbingers of increased mainstream RFID usage.

Remember, one year ago nobody was buying anything. No metaphor, this. If you sell anything B2B, then you know that literally, I repeat, nobody was buying anything.

So when companies report to us that inquiries and deals-in-progress have been heating up, sometimes to unprecedented levels, that is a giant swing of the see-saw. But for all my fellow sales cynics out there who know it ain't a sale 'til you cash the check—and that we're all self-deluders—remember there is no more hardened lot than RFID veterans. They have had more than your share of b.s. and some of what I heard you can count on happening.

ABI Research agrees; and they polled 115 companies. According to their annual RFID end-user survey, "100% of those organizations with rollouts currently in progress intend to increase their RFID budgets" this year, as well as half of those "currently using, deploying, evaluating or piloting RFID." Other analysts have made similarly upbeat predictions.

Still, all considered, I think Frank Shirmo sums it up well for many of us, "I'm very optimistic . . . maybe the better term is hopeful."