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RFID Application Space Sees VC-Funded Entrant

The RFID application space saw the entrance of a new player this week in the form of TrueDemand Software of Los Gatos, California.
Aug 03, 2005This article was originally published by RFID Update.

August 3, 2005—The RFID application space saw the entrance of a new player this week in the form of TrueDemand Software of Los Gatos, California. The company, which emerged from stealth startup mode on Monday a little over a year after its founding, will offer a suite of software applications that offer predictive analytics and demand-driven forecasting by leveraging RFID-generated data. RFID Update yesterday spoke about TrueDemand's plans with CEO Eric Peters, who was previously Executive Vice President of Strategy and Business Development for Manhattan Associates and leader of that company's "RFID in a Box" initiative.

The company is taking aim at three opportunities that RFID data is widely expected to introduce: the reduction of out-of-stocks, the improvement of new product promotions, and the reduction of inventory. These three areas represent particularly acute pain points in the supply chains of TrueDemand's early sales prospects. "The first logical customers of our product," said Peters, "are the CPGs [consumer packaged goods manufacturers] that have been early adopters of RFID." He noted the magnitude of the opportunity for improvement, citing as an example Grocery Manufacturers of America (GMA) figures that out-of-stocks cost the industry billions annually.

TrueDemand has invested significant resources in what Peters calls the "science" of using RFID data. He noted what many anticipate will be a torrent of RFID data as deployments expand, saying that current infrastructures, which were typically designed to process data in batches, are simply not equipped to handle the onslaught. Compounding the problem, much of the data will be "dirty," that is, it will lack a structure and consistency that would otherwise make it more easily actionable. The science which TrueDemand has built into its applications (and for which the company has six patents pending) will allow the copious amounts of dirty information to be processed and filtered in a way that brings value and avoids the meltdown of legacy systems. "In a world where the data isn't going to be 100% clean or 100% accurate, how will we provide value to clients? Well, you don't actually need 100% cleanliness or accuracy; you just need to be able to find the key piece of information. And that's what our scientists have been working on."

The company is backed by $6 million in venture funding from Mayfield and Bay Partners. It was a founding sponsor of EPCglobal and is a long-time participant in the organization's Business Action Group. Peters could not divulge which companies are currently using the TrueDemand software, but he said that announcements to that effect will be made at the EPCglobal conference next month in Atlanta.

The RFID application space is expected to receive increasing attention and investment over the coming year or two as hardware matures, second generation products are introduced, and deployments stabilize to the point where companies start seeking business value from the new data. (RFID applications are not to be confused with middleware, a market segment that ABI Research predicts will experience a shakeout, not growth, in the coming six to nine months.) It is at the application layer of the RFID ecosystem where many predict the most compelling opportunities for new business processes and transformative change will lie. To date, the space has been relatively vacant. TrueDemand's entrance, therefore, marks the beginning of the end of this quiet; competitors are sure to spring up in quantity.
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