Market Trend

Although with almost a century of history, RFID’s market had remind niche and applications are closed loop within organizations. The recent development in digital technologies and networks as well as the related standards have brought RFID tag to a price/performance ratio that it could be deployed in large cross organizations scale. The defining event of the RFID is the mandate to their suppliers issued by Wal-Mart and Department of Defense in 2004. Wal-Mart has requested its top 100 suppliers to put RFID tags on all cases and pallets shipped to the retail giant by January 1, 2005. The endorsement of the world’s two largest buyers of goods have created new business and investment opportunities in the digital and information technologies sectors. IBM, Sun, and HP have all announced heavy investment in the area as well as high tech venture capital in Silicon Valley and all over the worlds. Collectively, $1 billion of investment into RFID have been announced in 2004.

The market for RFID software is expected to have the fastest compound annual growth rate of any other RFID segment through 2008, according to VDC’s research. The overall RFID market reached $1.7 billion in 2004, and is expected to grow 36% annually through 2008, reaching $5.9 billion. While the hardware segment will have an average growth rate of 27.6%, and services will grow at a 47.8% clip, software will have a CAGR of 59.8%. According to the WinterGreen Research, the RFID Middleware market is forecasted to grow enormously in the next few years. By 2010 the market is projected as growing to 769.5 million, up just 47 million in 2004. Just one year later in 2011 the market is going double from 2010 reaching 1,557.5 million.

Forrester has reviewed RFID middleware from 13 vendors using the Forrester Wave Technology. The list of vendors includes ConnecTerra, GlobeRanger, IBM, Manhattan Associates, Microsoft, OATSystems, Oracle, RF Code, SAP, Savi Technology, Sun Microsystems, TIBCO Software, and webMethods. These vendors provide RFID middleware to solve the mandates from Wal-Mart and DOD. Forrester has also published a technical brief that software giants IBM, Microsoft, Oracle and Sun will redefine the market by providing more flexible middleware to support broader RFID applications.

IBM WebSphere RFID Premises Server (shipped) Microsoft Microsoft RFID Initiative (2006) Sun Sun Java System RFID Software (shipped) Oracle Sensor-Based Services (shipped) The overall RFID Middleware market size is $47 millilions and IBM with $30 millions revenue from this area is the dominating leader. On the open source front, RadioActive Foundation has recently launch “Open Source RFID Consortium” to offer EPC complaint open source software components for RFID.

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