ABI: RFID Integrators Must Prepare for Shifting Market
February 1, 2008 // Published as a news service by IHS
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Only a few years ago, companies specializing in radio frequency identification (RFID) integration services could succeed by offering clients their specialized knowledge of how RFID technology worked or, in some cases, didn't work.
According to ABI Research, RFID works well out of the box today, and it is time for RFID integrators to think about repositioning themselves.
"While the opportunity is still there for technology specialists, the market is evolving such that increasingly they must deeply understand some specific application," said ABI Research principal analyst Pete Poorman.
"RFID systems integrators can still do business today as boutique specialists, but they need to have a strategy to expand their value proposition. The vendors profiled in our new report all have such strategies."
Analysts said a common approach is to address a particular well-understood vertical market.
An example of a company following that strategy is CACI International, which has one customer: the U.S. government, in particular its military branches. With that tight vertical focus, it has the insight and the appropriate knowledge, and can "talk the talk" as required.
Another strategy is to augment services with packaged product offerings, as RFID equipment increasingly obviates the need for deeply-technical integration services. Analysts said high-profile vendor Xterprise appears to be choosing this path.
Still other vendors are doubling down on their technology expertise. Analysts said this involves repositioning themselves from being frontline solutions providers to taking a second-tier role.
"Companies choosing to remain technology-focused are looking to channels to provide the deep vertical market knowledge," said Poorman. One example is Intermec, which has packaged its full suite of RFID integration services for delivery through channels.
Whatever formula is chosen, Poorman said the key message to RFID integrators is you can't stay where you are. "The highly valued technical knowledge you deliver today will become more common as time passes and, ultimately, be embedded in products," he said. "Your services offerings must adapt to this market change."
Source: ABI Research.