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More Musings on Moore

What does the "whole product" look like, and who are the "gorillas" that can provide it?
Posted By Mark Roberti, 09.23.2010
I've written a couple of recent blogs that offer large and small vendors unsolicited advice on how to approach the RFID market (see Free Advice for RFID Vendors and More Free Advice for RFID Vendors). The advice I offered pertains to how companies can emerge as the "gorilla"—the term used by author Geoffrey Moore in his book Inside the Tornado to describe the major technology provider in a particular market. Moore says that before any technology can enter the "tornado"—a period of rapid, mass-market adoption—there must first be a dominant market player.

According to Moore, there must also be a compelling business problem that only the new technology can solve, as well as a global standard and a "whole product" that does most or all of what a user wants it to do. When all of these conditions exist, the market acts like a herd, adopting the gorilla's solution en masse.

One issue I haven't explored is just what it takes to be a gorilla in the RFID industry. And I think that will vary, depending on the industry and application, because the gorilla relates to the whole product. Take asset tracking, for example. Real-time location system (RTLS) vendors often provide tags, readers and software—a whole product. One company will likely emerge as the gorilla in the market for RTLS technology in health care. That company could then leverage its position to move into manufacturing and logistics. (Moore calls the strategy of having a "local tornado" in one market, and then using that to achieve a tornado in another, the "bowling pin" strategy.) Or one firm could emerge as the gorilla in manufacturing, with another emerging in logistics.

But in the market for passive RFID systems, it's difficult to see one company providing billions of RFID chips and tags, hundreds of millions of interrogators, and software for every application. It seems to me that in the passive market, several gorillas will work together to create a whole product and drive adoption in an industry. So in retail apparel, for example, we will likely see one tag provider, one reader provider and one software provider emerge as the dominant players in their respective arenas.

Some passive solutions may utilize the same hardware gorillas, but I don't believe that any particular software company will dominate the market for all applications. The applications are too varied, so just as we have software firms that dominate desktop publishing, computer-aided design, accounting or games, I think we will also see software firms dominate either industries or applications. One company might emerge as the software gorilla for retail apparel, for example, while another might dominate supply chain applications, with yet another dominating work-in-process management for manufacturers.

This is not unheard of in Moore's model. When the personal computer entered the tornado, the market was dominated by a hardware provider (IBM) and a software provider (Microsoft). And when the Internet entered the tornado, a hardware company (Cisco) and a software firm (Netscape) dominated. The latter had better than 85 percent market share, in fact, until Microsoft took it away. (I'll talk more about what happens after the tornado in my next post.)

There are many opportunities within the RFID industry. RFID vendors need to focus on building alliances with the right partners to solve real problems. When that happens, we'll see the technology enter the tornado in specific industries.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or the Editor's Note archive.

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