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RFID Spending Dwarfed by VoIP and Security

A new survey by Siemens reveals that VoIP and network security investments are dominating those of RFID as the climate of corporate IT spending improves dramatically this year.
Mar 24, 2005This article was originally published by RFID Update.

March 24, 2005—A new survey of 118 business executives by Siemens Financial Services reveals that as the climate of corporate IT spending improves dramatically, VoIP and network security investments are dominating those of RFID. Over the last year more than a third of surveyed businesses have invested in security and VoIP, whereas only 16% invested in RFID. The reasons are simple: guarding data and networks is a necessity, so investing in security is a no-brainer; and with VoIP, the return on investment is quantifiable and near-term. Everyone knows that the ROI with RFID is elusive at best and that the technology is still too expensive for many executives to justify (unless under mandate, of course). According to Siemens Financial CEO Bill Zadrozny, "We haven't seen any widespread acceptance of [RFID] at all. I don't think there is a compelling reason for people to use this. They got so many other things to invest in."

But these findings seem somewhat misleading, because it is unclear exactly which industries the surveyed 118 executives come from. Current RFID activity is confined to a handful of well-defined verticals and niches (supply chain, retail, defense, pharmaceuticals, airlines, you know the list). By contrast, security and VoIP affect those companies that use networks and telephones -- that is to say, all of them. When considered in this light, it is obvious that the spending on RFID should be substantially less than on security and VoIP, and that the 16% figure actually seems quite impressive. Besides, RFID as an industry is still in its infancy. According to a late-2004 study by Deloitte & Touche, RFID spending is still quite conservative and is expected to increase handsomely for at least the next half-decade.

InformationWeek has more on the Siemens survey
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