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The Sound and The Fury

The only way to achieve a global standard for a low-cost RFID network is if everyone understands what their long-term interests are.
Tags: Standards
Aug 05, 2002Aug. 5, 2002 - My editorial about what I perceived to be excessive secrecy at the Auto-ID Center (see The Manhattan Project) elicited more e-mail than any other opinion published by RFID Journal. All of the correspondents, except one, agreed with me. This is not a good thing.

The one person who didn't agree with me was Alan Haberman, who prompted the editorial in the first place. Haberman was involved in the creation of the bar code (an open, industry-led effort) and later in the formation of the Auto-ID Center. He wrote to say that the Auto-ID Center is not nearly as secretive as I implied. I have asked him to write an op-ed piece explaining the Center's policies, and I hope he takes up the offer.

The other correspondents were all unhappy with the Auto-ID Center. "You are so right on!!!," said one e-mail. "I contacted [the Auto-ID Center] a year ago about 'participating' and every other sentence ended with $300,000." The figure refers to the amount end user companies have to contribute to become a sponsor.

Another message came from a gentleman who is the founder of two RFID companies. He said he was fed up with the Center and asked: "Is there anything that can be done to make sure that the industry, as a whole, bands together to provide some consistency and the ability for this to be a win for everyone involved?"

It's a good question. Perhaps AIM can open a dialogue, or join the center and disperse information to its members. Perhaps the Center and its sponsors will become more open as they move from building a system to promoting adoption of it. In my view, both sides need to focus on their long-term interests.

There is nothing wrong with sponsors of the Auto-ID Center wanting to get a competitive advantage from joining the effort and contributing $300,000. There is nothing wrong with the Auto-ID Center giving its sponsors something for their money. And there is nothing wrong with established RFID vendors wanting to protect their existing products and markets through whatever legal means are available. The only problem is these strategies are incredibly shortsighted.

Success for the Auto-ID Center is not the creation of a low-cost RFID system. Success is the widespread adoption of such a system. Excessive secrecy breeds suspicion and distrust. The responses to my editorial show there's already plenty of both, which is not exactly conducive to global adoption of the technology.

Success for the sponsors of the Auto-ID Center is not figuring out how to take advantage of a low-cost, open RFID system before anyone else does. Knowing how to use a system that is never adopted is obviously a waste of time and money. The primarily goal of these companies, whether they understand it or not, is to get everyone to use the system.

It may seem ridiculous to argue that it is in Wal-Mart's interest to fund research and development and then allow some information – no one is suggest all – to be given to its competitors for free. But that is clearly the case. The faster an open system is adopted, the sooner Wal-Mart can start using it to save money. Yes, Wal-Mart's competitors could start using it sooner too. But ask yourself this: If you needed a job, would you rather know about an opening for a position that paid $50,000 before anyone else, or one that paid $100,000 at the same time as everyone else?

The established RFID vendors aren't blameless here either. Success for them is not discouraging the adoption of an open system or proving that their existing technology is superior to whatever system the Auto-ID Center proposes. Success for the industry is increasing sales and profits. Open standards have been proven time and again to foster rapid market growth. They should be welcomed, not feared.

It is natural, to some extent, for the Auto-ID Center to focus on building the technology before working on public relations. After all, there's no point reaching out to established vendors when you don't have anything more than an idea for a technology that will in all likelihood undermine their existing proprietary systems. My fear, however, is that the Auto-ID Center sponsors think they don't need the existing RFID industry, that startups will provide what the sponsors need, and then the established vendors will jump in when they see the market exists.

That may be true. Or it may be hubris. The startups alone won't be able to fulfill the demand. And many existing vendors may not be around when the market develops because the Auto-ID Center is freezing the current market. Who is going to invest millions in a proprietary system today when they are reading about an open system with 5 cent tags tomorrow? A great deal of engineering talent and RF expertise may be lost before the new market takes off.

As the editor and publisher of the Journal, I would love nothing more than to play a role in fostering a healthy relationship between the Auto-ID Center and the RFID industry. But no amount of well-meaning editorials is going to make that happen. The only thing that will make it happen is if everyone keeps their eyes on the prize: widespread adoption of single, open standard for tracking goods using low-cost RFID technology. All other issues, including competitive advantage, are secondary to that goal.

I realize no one is going to listen to me. The competitive nature of business makes it hard for companies to see when it's in their interests to cooperate. There may also be a measure of arrogance at work here. Big companies like Wal-Mart, P&G and Coca-Cola may think they can have it both ways -- seize get a competitive advantage and get everyone to adopt the system. Perhaps they're right. But if they're wrong and this effort collapses in a maelstrom of distrust and bitterness, it will be one of the most colossal blunders in the annals of business.

Mark Roberti is the Editor of RFID Journal. If you would like to comment on this article or submit your own, send e-mail to mroberti@rfidjournal.com.
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