IDC Study Shows RFID Deployments Accelerating in 2005; Leading Services and Integration Firms Playing Significant Role in $2 Billion Marketplace

06 Dec 2004 – FRAMINGHAM, Mass., December 6, 2004 � Encompassing a wide range of applications � from helping to protect the U.S. drug distribution network from counterfeiters to ensuring child safety � perhaps no other autoidentification concept has gained as much attention in 2004 as the topic of radio frequency identification (RFID). And with major companies planning to increase the deployment and integration of RFID systems in retail stores and warehouses in the years ahead, the market for related consulting, implementation, and managed services is expected to grow by 47% in 2004 and reach $2 billion worldwide by 2008, according to a new report from IDC.

With this backdrop, RFID is regarded as a disruptive technology and a significant opportunity exists for services organizations to help transform the supply chain experience for manufacturers, third-party logistics (3PL) firms, retail establishments, and consumers. Although in the past 12 months most services vendors have primarily focused on providing guidance to help suppliers comply with retailer mandates, the emerging leaders in the market will be those companies that are able to support a wider range of customer business process challenges � beyond the mandate.

�The pursuit of true enterprise mobility continues to be driven by early technology adopters seeking competitive advantage in a particular vertical industry. In the case of supply chain participants, the deployment of RFID and related wireless sensing solutions is helping to create that long-term competitive advantage. Supporting this objective, leading services organizations are helping design, build, and manage the RFID infrastructure that can deliver this long-term value,� said Richard Dean, program director, Mobile Enterprise and RFID Services at IDC.

Other key findings from the new IDC study include:

  • RFID and wireless autosensing solutions have evolved into a legitimate consulting, implementation, and managed services opportunity for many of the world�s most well-respected services organizations

  • Approximately 66% of enterprise organizations considering an RFID solution in 2004 reported they would prefer to use external resources when implementing such projects

  • Services firms are increasing levels of investment in personnel, marketing and partnerships for RFID in anticipation of increasing demand for services through 2008

  • While each of the 15 RFID services vendors profiled in this report have special qualities and unique capabilities, IDC has identified two leaders having the greatest potential for future marketshare gains

The study, Worldwide and U.S. RFID Services Competitive Analysis and Leadership Study, 2004: Disruptive Technology in Waiting and Why the Services Value Chain Matters (IDC #32183), identifies and profiles leading IT services vendors; the services divisions of hardware vendors; and consulting, implementation, and managed services organizations that are helping define and shape the adoption of RFID technology within the enterprise environment.