Omni-ID surveyed attendees at the recent RFID Journal Live 2010 conference and focused on two key topics in the RFID industry.

Survey Question One

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Asked to identify the biggest impediment to full-scale RFID implementation in their company, attendees were roughly equally divided between these four: lack of understanding of the technology, no clear business case, senior management not convinced, and lack of budget.

Interestingly, few selected the choice “do not believe RFID will work in application”, suggesting that those who know what RFID can do are convinced that it will work for them.

At the same time, the major impediments appear to be a lack of understanding of RFID by the decision makers. Since numerous case studies have clearly identified how RFID can save money on the bottom line, the “lack of budget” response again demonstrates a poor understanding of RFID’s benefits.  Sounds like the RFID industry needs to keep working on educating businesses about the benefits and cost savings!

Survey Question Two

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Another survey question asked attendees to identify RFID revenue trends in 2010. Overwhelmingly, survey participants selected “revenue growth” over flat or decreasing revenue.

What Does This Mean for the RFID Industry?

This can be taken as yet another sign that global economic indicators are trending positive after a couple of tough years for everyone.

Survey Data Gathered: April 2010

Innovation in our industry has to do with technology and products.

New inventions emerge because someone discovered something cool. But cool technology, in itself, is not enough to create value. The value of a new product or technology depends also on the technology’s utility and cost – and whether it solves a business problem.

I’ve been talking a lot about the term “value innovation”. This term is not new – it comes from an excellent book called Blue Ocean Strategy. Value innovation means driving innovation in ways that create value. The book discusses how one can use value innovation to create new market space, or a blue ocean, thereby making the competition irrelevant.

Creating New Markets

When Omni-ID released its first products a few years ago, we used blue ocean strategy to target the IT asset management market. The IT industry wasn’t using RFID at all, with good reason. At that time, RFID tags basically didn’t work in environments like a data center, which is full of metal. What’s more, IT equipment is covered with switches, indicators, and airflow grids, so there was no room for the large tags commonly used at that time.

Our technology created value for the IT industry. Because our technology creates a strong read range for the size of our tag, we were able to create an RFID tag, the Omni-ID Prox ™, with a small enough footprint, and a low enough profile, to fit on the surface of almost any electronic asset. The Prox has a read range of 8 feet in the US and is only 35mm x 10mm x 4mm, a size/read range combination that was unheard of when it was released. And because the Prox is balanced – meaning it works both on and off metal – it can be used on the complex variety of metal and plastic assets throughout the data center. We were able to offer a solution at a price point that worked for the industry, enabling them to manage thousands of data center assets more efficiently, and at lower cost, than they could without our technology.

Continued Value Innovation

Working closely with our customers, we have continued to create value for the IT industry. When customers needed a way to attach tags to a gridded surface or to cables, we developed the OmniTether attachment option. When they asked us for help with deploying tens of thousands of RFID tags, we developed the OnDemand ™ deployment solution, becoming the only on-metal RFID tag vendor with a solution for commissioning RFID tags at the customer site.

Eventually, RFID tags will be embedded in IT assets during the manufacturing process, and commissioning will take place in the supply chain. Omni-ID is already talking with IT manufacturers about this value innovation.

In the last year, competitors have joined us in the IT asset management market, and the IT industry can choose from several RFID tag vendors. A competitive playing field adds even more value for that industry, as it drives down costs.

For Omni-ID, however, it’s a signal for more value innovation. Through value innovation, we will continue to serve our existing markets, and also enter new markets, creating new blue oceans.

In a future blog post, our CTO, Andre Cote, will share with you a new form factor for a new market – our latest value innovation.

The first quarter of 2009 was difficult for many companies in our industry. And it was a tough quarter for Omni-ID as well.

In our second quarter, however, we saw a significant uptick in business – resulting in the best revenue quarter in our 2-year history. We saw not only an increase in the number of orders, but also in the size of orders – moving from tens of thousands of RFID tags to hundreds of thousands. And we’re seeing a lot of activity for Q3 and Q4. So this leads me to feel cautiously optimistic about the second half of this year – for Omni-ID, and for the RFID industry as a whole.

“So, does this mean that the economic downturn has hit the “tipping point”? And is this increase in activity an indication that the RFID industry has crossed the chasm into the mainstream global economy?”

Well, I think it is too early to call it an economic recovery. And, no, I don’t think that I would say that as an industry that we’ve crossed the chasm. But from my perspective, I am seeing more and more business pragmatists getting involved in RFID. They are looking to address real mainstream business issues and discovering that RFID can address these issues. . . and in the process RFID is bringing real value to their business. As a result, people are beginning to turn to RFID for practical business solutions, not just cool technology.

I just returned from a week-long visit to the East Coast, meeting with customers and partners, and they echoed my cautious optimism. As a group, we’re upbeat about a strong second half leading into 2010.

Given this perspective, the next question is: is Omni-ID ready? My answer is a resounding, “yes!” We’ve taken a number of key steps during the downturn to prepare for an upturn in the business. In a tribute to the strength of our technology and products, Omni-ID closed a sizeable Series C round of funding in February of this year – at a time when almost no companies were being funded. This investment has allowed us to strengthen our company in several significant ways:

Technology and Products

We have a roadmap of new RFID tags coming out over the next several months, including some significant product announcements coming in September. These new products are designed around value innovation – technological innovation that provides a leap in value for customers that opens up new market space for innovative companies like Omni-ID. I’ll talk more about value innovation in a future blog.

Capacity and Quality

Just recently, we announced our new manufacturing subsidiary, located in Quingdao, China. This facility will offer not only greater production capacity but also tighter control over the manufacturing process, resulting in continued quality improvements.

Partnerships and Programs

This past year, we announced some pretty significant partnerships with IBM and Mitsubishi, two highly-selective global powerhouses. Over the coming year, we look forward to developing those partnerships further as well as announcing new ones. Through these partnerships, we are part of total solution programs that address real world customer problems and bring more value to businesses.

Markets and Customers

As a startup, we’ve been focused to date on a few select markets, including IT asset tracking, where we are viewed as the leading passive UHF RFID company in this expanding market. We’re well-positioned and strong enough now to expand and aggressively enter new markets, where we believe our new product offerings provide innovation and value to customers.

With so many things ahead, the timing is perfect to begin an Omni-ID blog. As we roll out new products, partnerships and programs, my colleagues at Omni-ID, Stan Drobac and Andre Cote, and I will be sharing with you our personal thoughts on the industry and Omni-ID’s value innovation. We look forward to a continuing dialogue with you, our readers!