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| Home - Industry Article - Jun 04 Issue |
The Internet of Moving Things |
By Michael Tanner, Managing Director, The Chasm Group
RFID has gained high visibility of late. But it’s worth remembering that using RF tags to track status, location and condition of assets has been going on for a long time. Highway tolls are collected using RF technology every day. Our military started using RFID systems back in the first gulf-war and now uses it to track over 300,000 containers in over 40 countries each day. For over 10 years, companies have tracked baggage through airports, racks filled with inventory, trucks coming into dock-doors, and high-value assets through hospitals and other buildings. Yet we keep hearing that the RFID revolution is about to happen.
A number of things make the situation quite different today. First, the tag protocols being defined by the MIT’s Auto-ID Center have gone a long way to towards creating a unifying technology standard. These standards are still evolving, but the Auto-ID center has the support of a growing list of over 100 major corporations. Second, Moore’s law continues to drive the cost of both passive and active RFID tags down to economically viable costs. Alien Technology, for example, announced a sub-ten-cent passive RF tag last year. Third, the two largest supply chain leaders in the world, notably the United States Defense Department and Wal*Mart, have both begun significant and ongoing roll-out of RFID as a means of tracking supply chain assets, with Wal*Mart mandating their top suppliers to tag all cases and pallets by 2005.
Wal*Mart’s mandate and the success of RFID in the Military may just be the final impetus to turn RFID from a local competitive advantage to a broader phenomenon. Closed-loop tracking systems that track assets through a fixed network of readers, such as pallet-tracking, baggage tracking, instrument tracking etc. continue to be purchased by individual companies based upon application-specific ROI. But when mandates create a ubiquitous use of tags, multiple suppliers who must tag their own products then have an opportunity to add RF infrastructure for their own use, knowing that the items, pallets, containers they will send and receive will already be tagged and track able. Integration of bar code, passive and active tags with actual product serial numbers such as being proposed by Verisign, and Active-tag technology such as that used by Savi Technology1 in the US Military and elsewhere start to create a vision for an open-loop network, where retailers, distribution centers, shippers, freight-forwarders and others become nodes on a sort of giant switched network, which can then be used to track and monitor assets moving through it. Real-time management of supply chain assets not just within a single company, but throughout the supply-demand chain starts to be an achievable possibility.
Renewed interest on the part of large system integrators, IT outsourcers, software vendors and venture capital point to just how much business is expected. But more notably, companies like Sun, IBM and Microsoft have all indicated serious interest. This suggests there may be more here than meets the eye. Fifteen years ago and well before the Internet, Sun’s theme was “the network is the computer.” It may just be that all the hoopla about RF today isn’t really about RFID at all. It may just be that we are building the Internet of Moving Things. My fear though is that like the Internet before it, hype always well-precedes reality. Over-hype on the front-end eventually creates a karmic balancing down-cycle before everyone gets back to business. As new vendors enter the market and new systems come on-line we all will be well-served to stay pragmatic and keep this in mind.
1Mr. Tanner’s company, The Chasm Group, LLC has consulted with several of the vendors mentioned in this article. Mr. Tanner is on the Board of Directors of Savi Technology, Inc.
This article was originally published in MSI magazine, http://www.msimag.com.
Mike Tanner is a Managing Director at the Chasm Group, where he provides advisory and consulting services in the areas of new venture development, market development strategy, operational planning, portfolio investment strategy and market positioning. Mike holds board seats for Apexion and Savi Technology, and sits on the advisory boards of Entivity and Unicru. He can be reached for comment at: mtanner@chasmgroup.com
 
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