Pity the Poor Customer

By Mark Roberti

Companies looking to buy RFID systems are hearing conflicting information about what RFID can do and where the market is going.

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Sept. 30, 2002 – Companies from the U.S. heartland to the crowded streets of Tokyo are considering implementing RFID applications. In each business, a senior executive taps some poor guy (or gal) on the shoulder and says, “I want you to look into this because I need to know whether we should deploy an RFID system. I don’t want to see us falling behind our competitors on this.” And when that poor person tunes in to learn what solutions will work for their company or where the market is going, they are spun around and around by conflicting statements from different people within the industry.

Customers are hearing that it’s possible to make a 5-cent tag within two or three years and that it will never be possible to make a 5-cent tag. They are hearing that RFID is ideal for the supply chain and that there are a lot of problems with water and metal and null spots. They are hearing that an open standard will create huge efficiencies across supply chains and that no one standard will solve all problems.

At the Frontline Solutions show in Chicago last week, several speakers from established vendors were openly contemptuous of the Auto-ID Center and its goal of creating an open, global network for tracking goods using low-cost RFID tags. Some spoke of the center as if were a hippie commune that said its goal was to spread peace, love and understanding to every corner of the globe.

In the afternoon, Kevin Ashton presented the Auto-ID Center’s vision. Unfortunately, he was only given 30 minutes to speak and didn’t have time to talk about the Center’s progress. Ashton showed a video of Alien Technology’s production facility and of executives from Unilever, Target and other sponsor’s talking about the importance of the center’s work.

When the day was done, attendees didn’t know what to believe, which, to be frank, is good for RFID Journal. People are confused, and they need a reliable source of objective information. But I don’t feel good about it, any more than a doctor feels good when he sees a sick patient. There’s nothing we can do to heal the rift, except tell potential buyers of RFID systems the facts as we know them. Market forces will take care of the rest.

But I have to say that I’ve seen some things since I’ve been covering RFID that I’ve never seen in 20 years of business journalism. I’ve seen companies selling RFID products stand up and tell a room full of potential customers how hard it is to implement RFID systems and stress the problems with the technology. I’ve seen startups that need to publicize their products not return phone calls from the RFID journal of record. And I’ve seen technology companies that are part of the Auto-ID Center disparage their own organization (which is made up of some of the biggest potential companies on the face of the earth).

I’m not a big fan of Bill Gates, but the one thing I do admire about the guy is his paranoia. You’d think someone as powerful as Gates would feel invincible, but he’s smart enough to know that in technology, there’s always something new that can disrupt the markets. Gates is fond of saying some kid in a garage somewhere might be developing something that puts Microsoft out of business. Some of that is bluster designed to make it seem that Microsoft is not an invincible monopoly. But I believe Gates truly understands that he is vulnerable, and he’s alive to the fact that threats may be lurking everywhere.

I don’t know what’s going on inside a lot of established RFID vendors. Maybe they are already plotting how to respond if the Auto-ID Center’s system catches on. If they are, they are doing a good job of hiding it. Their main reaction to the threat seems to be to bash the Auto-ID Center and even bash their own products. The market would be better served if vendors focused on what they can do for customers today, and what they will be able to do for them tomorrow if an open, global standard is ever adopted.