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The Emerging Marketplace for RFID Data Analytics, or Finding a Needle in a Haystack
Solution vendors should plan for changes in the economics of reselling hardware. Those who find ways to incorporate data analysis into their offerings will enjoy higher margins and a competitive advantage.
Hage sees similar inertia in some private-sector verticals. There are many regulations that restrict data access in order to protect consumer privacy, including the Health Insurance Portability and Accountability Act (HIPAA) in health care, and the Gramm–Leach–Bliley Act (GLB) governing banking. But she says she is optimistic about the long term: "People will buy actionable information."
Eventually, Colleran says, people will use third-party analysis "as long as it doesn't undermine [their] underlying business. They'll take safeguards." There are precedents for this, he says. When payroll services were first invented, businesses were suspicious about outsourcing payroll processing. "Now you'd be a fool to do your own payroll," he says. "It's a matter of scale and expertise."
Safeguards enable the U.S. Department of Defense (DOD) to take advantage of RaaS under certain circumstances. Rear Admiral David Baucom, the director of strategy, policy and logistics for the U.S. Transportation Command, says that the DOD often uses "a commercial fee-for-information methodology." One example is a commercial active RFID network used to monitor cargo passing from Karachi, Pakistan, to the Afghan border. "The DOD pays the commercial vendor for the reads on RFID-tagged shipments passing an interrogator." The data is secure because readers only return serial numbers, which only secure DOD databases can make sense of.
McCoy, who once co-authored a paper titled "Robust computation of linear models, or How to find a needle in a haystack," is very optimistic about the prospect for an RFID data analysis industry. "Cofacet helps retailers understand how people are interacting with physical objects in the real world," he says. All Cofacet needs is data to work on. "When I saw the data that Senitron had, I got excited."
Scot Stelter has worked in the RFID field for more than 10 years, serving in senior marketing positions at both Alien Technology and Impinj. His company, Stelter Product Strategy LLC, provides guidance to businesses contemplating product strategy decisions in RFID, the Internet of Things and machine-to-machine communications. Stelter is also the VP for RFID and the Internet of Things at ChainLink Research.
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