Just about two years ago, SAP was ambitious about the opportunities that abound for the use of radio frequency identification technology. SAP made a splash with its Auto-ID initiative, mostly focused on getting manufacturers and distributors to meet government and retail compliance. Months later, SAP’s rival Oracle Corp. launched a sensor technology package, leveraging its initial relationship with NASA to build a product base around RFID and other sensor based technologies, like the ability to track temperature and humidity for specific chemicals or other products.
We’ve appeared to enter into a bit of a lull in the RFID space. Gartner analyst Jeff Woods, recently told SearchOracle that both Oracle and SAP appear to take a back seat in the innovation department – at least for now.
"We don't think that SAP and Oracle are particularly good at delivering [RFID] process innovation at this point … What they are good at is commoditizing processes," Woods said.
Perhaps we’ll hear more from SAP at its annual Sapphire conference later this month about its initial research and strategic planning around the technology down the road. For now SAP has split up its RFID and Auto-ID infrastructure initiatives at its Web site. Auto-ID can be found here and RFID can be found wrapped into the supply chain management module here.
SAP’s Claus Heinrich, has been a big believer in RFID and even wrote a book on the subject (“RFID and Beyond”) last year that outlined some of the ways RFID could be used to transform supply chains and improve the global economy. SAP has been pouring money into the technology and has a research lab dedicated to its Auto-ID products.
But if Jeff Woods is right, it’s possible that SAP and Oracle are waiting on the sidelines for more innovation from the smaller niche vendors. Vendors and industry experts are currently developing standards and assuage privacy concerns among the public. Then SAP and Oracle can move in with an acquisition or partnership when the market for the technology matures. Large ERP vendors are primed to focus on how business applications and systems infrastructure can handle the mountains of data that result from heavy RFID and sensor technology usage. By cleaning and analyzing that data, companies will improve visibility in the supply chain and glean real ROI from RFID and sensor based initiatives.
Read about Oracle’s latest RFID announcement and more of analyst Jeff Woods’ comments here.