OYSTER BAY, N.Y., 11 August 2006. ABI Research has reduced its 2007 market forecast for RFID software and services revenue to $3.1 billion, which represents a downward adjustment of approximately 15 percent from the firm's previous estimates.
According to RFID practice director Michael Liard, the lowered revenue expectations result from the current direction of RFID's evolution, not from any decline in the industry.
"Four interrelated factors, particularly within asset-management and supply-chain-management RFID markets, have led us to revise our forecasts," Liard says. "They are: market consolidation, collaborative solutions, the growing availability of off-the-shelf commercial RFID software packages, and the improving level of skills in RFID project planning."
ABI Research expects to see considerable consolidation across companies, as well as within companies as RFID solutions evolve. Consolidation among industry vendors and service providers will eliminate significant overlap and will lead to better-managed, more efficient solutions.
"The goal is seamless integration," notes Liard. "Companies wishing to integrate RFID into the enterprise will naturally turn to their established software and service providers. If those vendors don't have a solution, they will frequently either build or buy one."
RFID technology is becoming increasingly standardized, which is fostering -- in a variation on the market consolidation just mentioned -- "ecosystems of partners," each contributing elements to a common solution. These collaborative efforts mitigate software costs because users do not need to seek multiple sources.
Custom software by definition costs more than commercial software, and today, many larger developers are offering off-the-shelf packages that fit lower RFID integration budgets. Over time, ABI Research expects many parts of RFID logic, event, and business process-oriented challenges to be met with software that requires limited change.
ABI Research's latest RFID update, "Focus on RFID Software: Investigating New Solutions and Approaches" discusses these trends in depth, examines many of the past quarter's RFID industry developments, and updates the service's forecast database.
For more information, visit http://www.abiresearch.com/products/market_update/RFID/63.
