Moving Towards Bar Code Label Customization

Natick, Massachusetts -- Off-the-shelf packaged bar code label generation software (sold separately or bundled with hardware) accounted for nearly 80% of revenues in 2002. However, by 2007, this percentage is expected decrease as integration into complex systems and a lack of flexibility drives users toward custom solutions.

Global Shipments of Bar Code Label Generation Software Segmented by Product Category (Millions of Dollars)

Base Year (2002)

Bundled Software (with Hardware): 8.8

Off-the-Shelf/Packaged Software: 37.3

Third-Party Custom Developed Software: 3.0

In-House Custom Developed Software: 9.8

Total: 58.9

CAGR (2002-2007)

Bundled Software (with Hardware): 7.7%

Off-the-Shelf/Packaged Software: 8.9%

Third-Party Custom Developed Software: 16.0%

In-House Custom Developed Software: 17.9%

Total: 10.8%

In a recent study by VDC, almost 50% of bar code label generation software end-user respondents indicated that some degree of customization was needed to meet specific system and application needs. While the amount of software customization varied from end user to end user, the average amount required by surveyed respondents was roughly 45%. In addition, the largest percent of respondents cited that the amount of customization would remain the same, followed by a significant share of end users that expect the amount of customization to increase.

End-User Respondents Segmented by Amount of Software Customization Required (Percent of Respondents Using Customized Software)

Less than 10%: 27.60%

10% to 25%: 13.80%

26% to 50%: 17.20%

51% to 75%: 6.50%

76% to 99%: 14.20%

100%: 15.20%

Do Not Know: 5.50%

When asked about the need to customize their bar code label generation software users cited the following reasons:

- smooth integration with other applications such as ERP and WMS without sacrificing any of the software's features and functionality;

- keeping up with continuously changing compliance standards;

- software and system performance; and

- maintaining proprietary printer control and language code.

Mike Liard, Senior AIDC/RFID Analyst offers this advice to vendors: "Software vendors could benefit by offering the support needed to customize solutions through partnerships with hardware manufacturers, large systems providers/integrators (i.e., WMS, ERP, TMS vendors), their own in-house technical staff, or from agreements with value-add distribution partners. When I spoke with users about their level of satisfaction with vendors contributions, most indicated they were only somewhat satisfied with education and training offerings."

Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets. To view the entire press release including tables, go to: http://www.vdc-corp.com/autoid/press/03/pr03-71.html

For more information on VDC, visit http://www.vdc-corp.com

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