The Platform Tech Companies Can’t See

By Mark Roberti

Amazon, Google, IBM and Microsoft are focused on artificial intelligence, but are missing out on the importance of RFID.

There is a lot of buzz about artificial intelligence these days. A Google AI program's triumph over a Korean champion of the complex board game Go was just the latest ballyhooed example of the progress the big tech companies are making.

Last week, the New York Times published an interesting article, titled "The Race Is On to Control Artificial Intelligence, and Tech's Future." The article says that Google and fellow tech giants Amazon, IBM and Microsoft are waging a "platform war."

The article describes a technology platform as "essentially a piece of software that other companies build on and that consumers cannot do without. Become the platform and huge profits will follow. Microsoft dominated personal computers because its Windows software became the center of the consumer software world. Google has come to dominate the Internet through its ubiquitous search bar."

There are, of course, platforms for businesses as well as consumers. Mainframe computers were an example, and so was the PC. So it's surprising to me that the tech giants are investing heavily to become the platform for artificial intelligence, but are investing nothing to become the platform for RFID. I get that AI is sexy. I understand that it builds on the cloud-computing model and will be a big money spinner. But I don't comprehend why companies don't see that RFID is a big opportunity, and that they could own it without even a fight from their competitors.

Here's why I think RFID is a big platform opportunity: First, let's begin with the obvious. The world is riddled with waste because today's computer systems cannot identify, track and manage things in the real world (tools, vehicles, raw materials, parts bins, work-in-process, finished inventory, and so on). RFID will enable all these things to be managed more efficiently, saving companies, collectively, billions of dollars annually.

RFID deployments will involve handheld and fixed readers that will run software and send data to local servers, which will run software that will filter data and send it to the cloud—which will store data and enable businesses to use it in new and creative ways. The company that creates the reader, server and cloud platform for businesses to run their RFID systems will make hundreds of millions of dollars. I wrote about this opportunity for Microsoft, which makes software that can run handhelds, fixed readers, servers and the cloud (see Wither Microsoft?).

I'm not sure why tech giants don't see this opportunity. Perhaps it's because most of them jumped into RFID in the early days, and the technology didn't immediately deliver huge profits so they now assume it never will. But surely someone in Silicon Valley has read Geoffrey Moore's Crossing the Chasm and understands that early promise always leads to disappointment, and then to eventual widespread adoption.

The tech giants will come back to the RFID market. It looks like retail apparel is just a few years away from mass adoption. When that happens, there will be money in the market, and the giants will see the opportunity. Then they may wage a platform war. Of course, some college student currently working in his or her garage might already have won it.

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, the Editor's Note archive or RFID Connect.