RFID - The Time Is Right

RFID (radio frequency identification) technology has been hyped to the max...and vendors of the technology know it. RFID is not going to replace every other automatic data capture technology known to man. Does the technology work? Yes. Will it play a major role in the future of supply chain tracking, asset tracking, security, and authentication? Once again, the answer is yes. And finally, have RFID vendors learned their lessons about over-hyping the technology? Yes.

New Reasons For Hope
OK, we've established that vendors learned from their mistakes. Now the industry needs to move on and take this technology to market. Enter VARs. VARs have new reasons to be excited about RFID, new reasons for hope. First, new applications have emerged that are well-suited for the channel. Second, vendors are willing to do almost anything to help their VARs succeed in the market.

Jack LeVan (formerly with Zebra Technologies Corporation) is now the new president and CEO of SCS Corporation (San Diego, CA). SCS recruited LeVan partly because it believed he could develop a reseller channel for its RFID technology. I asked LeVan what he will do for VARs to encourage them to offer SCS technology. "Almost anything," he replied. "RFID manufacturers will need a small, close-knit group of VARs to market this technology. This puts resellers in a strategically strong position with respect to vendor/VAR partnerships. The (profit) margins are still very good in RFID, and vendors will offer training and whatever is needed to help VARs succeed."

What New Markets?
As the business world shifts to total dependence on computers, a number of new security issues surface. Allan Griebenow, president and CEO of Axcess, Inc. (Carrollton, TX), told me, "We have a new market for RFID technology. It's called 'asset containment.' The need for mobility is causing businesses to invest in laptop and notebook computers, PDAs, and handheld terminals. These items can be very expensive. We are using RFID to deter theft of these items. To keep people from walking out the front door with company property, we can tag these computer products. We can contain these assets to the building.

"Hospitals can use RFID to secure diagnostic and monitoring equipment. Theft is not the only problem. Employees sometimes hoard equipment, so they don't have to look for it when they want it. And, equipment can be misplaced. With our active (battery powered) tags, we can track and contain items."

LeVan cited the authentication market as a strong sales opportunity for VARs offering RFID technology. "As companies increasingly use the Internet for business transactions, they will need some form of authentication," said LeVan. "Authentication starts at the order-taking stage. Businesses need to know who is at the other end of the virtual connection. Driven by e-commerce and credit card fraud, authentication applications will be a strong target for VARs offering RFID. And the nice thing about this market is that both small and large businesses will need authentication security. That means new business for small and large VARs."

Is This More Hype?
No, the time is right to check out this technology. RFID is still a young industry. Now is the time to get in on the ground floor and be the leader in promoting/offering the technology. It will give you an edge on your competitor. On the other hand, you can procrastinate. You may find that your competitor will jump on the market and have an edge on you.