The mandates insist on suppliers becoming RFID compliant, compelling most suppliers to integrate existing systems with new RFID systems. As a result, the market for RFID middleware is witnessing an upswing.
New analysis from Frost & Sullivan (http://www.AutoID.frost.com), World RFID Middleware Markets, reveals that revenue in this industry totaled $23.39 million in 2004 and can reach $220.43 million in 2011.
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The renewed interest in the RFID technology is fuelling a frenzy of activity as different verticals prepare to become RFID compliant. Most vendors aim to lower the existing high rates of equipment such as hardware, software, and tags required to establish RFID systems.
"Efforts are on to bring the price of the tags to as low as five cents, which has been set as a target by the industry," explains Frost & Sullivan Senior Research Analyst Soumilya Banerjee. "With order sizes going up, the ensuing economies of scale expect to enable this price to come down even further."
Following deployment of easily available cost-effective RFID solutions, the data generated would increase, as tagging will then be done at the individual item level, shifting from the current practice of tagging at pallet or case level.
To accommodate the resulting increase in volume of data captured, vendors must develop new systems that can perform real-time content analysis of the collected data and eventually route the analyzed data to appropriate business application programs. These systems should also contain characteristics of interoperability as end users utilize a variety of interfaces.
Thus, middleware will be viewed as a solution, following the need to integrate existing legacy systems such as warehouse management systems (WMS) and enterprise resource planning (ERP) with RFID enabled systems.
"Middleware vendors need to keep in mind the fact that users would be commissioning their hardware systems from multiple vendors for reasons such as vendor proximity, trusted partners, and order volume," observes Banerjee.
To overcome the issue of low interoperability levels, there is a surge of partnerships within the RFID market.
"There are partnerships between hardware vendors and network architecture providers, between middleware vendors and enterprise applications solution providers, and between middleware vendors and systems integrators," explains Banerjee. "Such alliances create solutions, which increase the ease of deployment for the end users and also boost a vendor's reach and the network of strategic partners."
The drive toward joint ventures also reduces the challenge of prohibitive costs involved in integration. The massive investment to restructure processes to suit RFID technology is likely to deter a section of users due to the uncertainty over returns on investment from RFID due to the fledgling market stage. Until the first wave of deployment occurs, majority of manufacturers will adopt a 'wait and watch' policy, affecting the middleware market.
Nonetheless, the increasing pressure following the mandates and rising levels of awareness and acceptance of RFID technology will ensure growth and increased demand in the RFID middleware sector in the near future.
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World RFID Middleware Markets
Keywords in this release: radio frequency identification, RFID, Wal-Mart, U.S. Department of defense Target, Albertsons, warehouse management systems WMS, enterprise resource planning, ERP, research, information, market, trends, technology, service, forecast, market share