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RFID middleware: "poised to explode," soon to disappear, or seeking a new role?

From "RFID software market 'poised to explode'," by John Leyden, The Register, 9 October:

"The market for business software to handle data generated by RFID (radio frequency identification) chips is predicted to reach $192m in 2010, a big increase from the $24m the nascent market generated last year.

"A study by analyst Venture Development predicts that IT giants such as Cisco and IBM will adapt their technologies to cash in on the market for RFID middleware or enter the market through acquisition... Venture Development names IBM and WebMethods as the firms most likely to make acquisitions of RFID software start-ups.

" 'Although the larger players are not as "flexible" and "mobile" as their smaller counterparts, their desire to increase the total available market is expected to increase M&A [Merger and Acquisition] and partnering activities, eventually leading to a smaller, less fragmented, and more standardised industry,' Venture Development reports.

"The RFID middleware eco-system currently includes start-ups, many focusing on developing architectures for the real-time processing of RFID-generated data, such as RF Code, GlobeRanger and OATSystems. Meanwhile, application server, messaging and systems management vendors, such as IBM, Microsoft, Oracle, SAP and Sun Microsystems, are busying themselves adapting existing enterprise applications and platforms to support RFID data across a range of business processes, an approach that omits the stand-alone RFID middleware platform favoured by pure-play vendors.

"Elsewhere, networking vendors such as Cisco Systems, Omnitrol, Blue Vector, and REVASystems are developing software for network appliances (such as switches and routers) that allows RFID readers to plug into computer networks.

"Academics are also getting into the act. Low barriers to entry are encouraging universities such as UCLA and the University of Arkansas to lend their services to testing, consulting, and RFID middleware development projects alongside offering classes and training in RFID technologies."
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NOTE: We were unable to find the VDC report mentioned in this article, but we did find much less optimistic view from another writer: "RFID Middleware Change is Certain, Direction is Not," by John Burnell, RFID Update, 28 August 2006:

"This is the third installment of a three-part series examining middleware and other RFID integration options and the issues surrounding them. We use the term 'middleware' broadly and loosely to refer to software or devices that connect RFID readers and the data they collect to enterprise information systems. The first installment, 'What Is RFID Middleware and Where Is It Needed?,' and its sidebar, 'A Primer on Types of RFID Middleware,' segmented different types of specific software and hardware offerings that are commonly grouped together as 'RFID middleware.' The second installment, 'ERP Support Squeezes RFID Middleware,' analyzed how forthcoming software standards from EPCglobal plus developments from mainstream IT, ERP and other application software providers may impact future RFID integration.

"Middleware in general and RFID middleware in particular is often regarded as an interim technology. The school of thought is that as technologies, standards and markets become more mature, the need for middleware to connect disparate systems will disappear. That leaves systems planners wondering if they should invest in RFID middleware or architectures that require it...

"Those who think RFID middleware use will grow and those who think it will decline can each find strong evidence to support their points of view. Intelligent RFID readers with embedded software can output data that is clean and ready for use by software applications; Cisco can enable networks to filter RFID data; EPCglobal is developing multiple software standards; WMS, ERP and other packaged providers are writing support for raw RFID input into their applications; and Microsoft is taking major steps to add widespread support for RFID. Yet every market study of RFID middleware predicts robust growth.

"This contradiction can be explained by saying middleware will be part of RFID's future, but middleware products will likely be different than they are now.

" 'Middleware is great as a first-generation solution to help people learn about RFID,' says Dave Macias of Omnitrol Networks, a middleware appliance maker. 'There are no problems with it, it's just time to evolve to something that's more efficient'...

History Lessons

"The history of technology evolution in two markets close to RFID - bar code and wireless networks - also suggests there will be an ongoing need for RFID middleware.

"A few years ago, the middleware hot spot in the data collection industry was for software that could help input bar code data to SAP and other ERP applications. ERP has improved its bar code support, but even now printing a bar code label from an SAP application, or entering bar code data into it, is often not a simple process. Many companies who run SAP and bar code systems still use middleware in between.

"In wireless networking, IEEE 802.11 standards have removed most of the integration and interoperability issues that plagued the market and inhibited adoption. But there is still a tremendous need for network management systems, and there are many successful wireless device management applications. It is doubtful RFID systems will ever be as plug-and-play as 802.11-standard wireless access points, network cards and other devices. It's also doubtful that mainstream IT management products like HP OpenView and competitive offerings from Tivoli and Computer Associates will equal RFID middleware soon, if ever, in the specific features RFID devices need for management and optimization.

" 'We don't know where the overall RFID middleware market will go, but there clearly will be an ongoing need for device management-type middleware,' says Drew Nathanson, director of AIDC and RFID at Venture Development Corporation (VDC), an industry research, analyst and consulting firm.

There is a clear need and strong market for RFID middleware now, and many ongoing needs for device management and other features have been identified. Other than that, the role RFID middleware plays, the form it takes, and the degree it will be needed in the future are not so clear.

" 'For the RFID industry to grow it needs to get to where devices are truly plug-and-play,' says Marc Osofsky, vice president of marketing and product management for OATSystems. 'Some people think middleware is going away, but it takes a lot more than people think to get interoperability between devices and to manage them effectively. There is a tendency to underestimate the complexity.'

" 'RFID middleware will undergo an evolution,' says Pete Poorman of GlobeRanger. 'It will still be there, but may be somewhat invisible.' "

[RFID: 14 October 2006]