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GenuOne Withdraws from RFID Application Market

GenuOne, the supply chain software solutions provider based in Boston, Massachusetts, is indefinitely shelving its RFID application software TraceGuard citing the market's immaturity.
May 04, 2005This article was originally published by RFID Update.

May 4, 2005—GenuOne, the supply chain software solutions provider based in Boston, Massachusetts, is indefinitely shelving its RFID application software TraceGuard citing the market's immaturity. In the company's announcement, CEO Jeff Unger states, "the RFID application software market is still very much in its infancy and will take some time to develop into a formal marketplace." GenuOne's RFID business had only accounted for 10-15% of the company's revenue, according to Computer Business Review. Its other products, anti-counterfeiting solution SourceGuard and automated online brand protection tool GenuNET, are profitable sources of growth that will now receive exclusive focus.

GenuOne was founded in 1999 as a supply chain security software provider and a few years later entered the RFID application market. It has received $20 million in venture capital funding to date and is reportedly profitable. The company will let go of a "handful" of employees with the discontinuation of TraceGuard, reported RFID Journal. Also to be discontinued is a partnership with Unisys announced in February whereby GenuOne and Unisys would provide product tracking and authentication software to the healthcare and life sciences industries. That partnership had yielded no clients.

This news from GenuOne casts a pall over the industry. While it is widely recognized that RFID is an immature technology, that ROI in many cases remains elusive, and that there is much work to be done to realize the technology's promise of true supply chain visibility, market predictions and industry participants persist in their optimism about RFID's potential. GenuOne's Unger himself was quoted as saying, "It's really a matter of time. We're not any less bullish on RFID." But this outright withdrawal by a serious player in the RFID application space certainly lends doubt to the industry's excitement (or hype, as it has been derided by many).

Further disconcerting is that many have expected 2005 to be the year in which hardware issues would finally be worked through. GEN 2 has been ratified, and a wave of new products will hit the market later this year. Read rates are up, and overall reliability is markedly improved. Industry attention was therefore turning to the application layer of the RFID ecosystem, where high growth, demand, and innovation was anticipated in 2006 and beyond. That an application provider is predicting that the RFID hardware infrastructure will not be mature enough for another few years to support the build-out of value-generating applications suggests that perhaps the technology is a lot less further along than many had thought.

Read GenuOne's announcement
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