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Kick Open the Box on Higher ROI for Active RFID:

Driving Cost Parity with Passive Systems

By Zahir Abji, President

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What’s What’s What’s What’s Keeping Active RFID in the BoxKeeping Active RFID in the BoxKeeping Active RFID in the BoxKeeping Active RFID in the Box????

Active tag cost is always the first question when end users evaluate a RFID system because the on-going tag costs will drive up total cost of ownership (TCO).

Yet deployment costs, support and system maintenance are other key metrics for ROI.

Active RFID market adoption is driven by the need for reliability and affordability. Passive systems are usually judged on the tag cost of around 20 cents. Yet when total cost of ownership calculations are considered, the real cost is more like $2-$4 per tag. Active tag systems can now be had for around $10 per tag – with active tags providing enormous benefits to automating systems and operations – that barcode and passive cannot accomplish. GuardRFID is at the forefront of driving active RFID market adoption by striving for TCO parity with passive systems – making active tags the obvious choice in many supply chain applications. Are we there yet? No – but the tipping point of TCO is no longer a slam dunk for passive. What will drive TCO cost parity with passive systems? A combination of hardware pricing and mature technology and superior operational support. While the benefits offered by Radio Frequency Identification (RFID) based solutions are compelling, the reality is that like eight track stereos, with too many implementations failing to meet their anticipated ROI and rapid technological advances, it seems like we should just wait and see what the neighbors do. Time and again, we have seen excellent software applications compromised by RFID hardware that is problematic, has limited functionality and less than desired applicability. Poor implementation drives up support and maintenance and total cost of ownership (TCO) making it a key constraint to market uptake of RFID. Too many companies have rushed products to market that are immature - or worse, rushed their immature deployment and operational support capabilities to market. ROI

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and TCO are positively affected by a flexible easy to integrate technology platform and with affordable active tags designed so the user can choose required features to combine with mature technology and support processes. The ability to put multiple tags and peripherals on the same platform using the same RF technology infrastructure regardless of the use case saves time.

Internal integrators and ISVs offer excellent applications in a variety of industry verticals such as aerospace, defense, warehousing and industrial process control. However, they continue to be challenged by RFID hardware that is difficult to work with and worry whether they are making the right choices for their clients;

Data Volume:Data Volume:Data Volume:Data Volume: multiple tag reads at dock or perimeter doors can result in multiple reads which require sophisticated data smoothing and filtering to ensure data quality

Managing thManaging thManaging thManaging the e e e ReaderReaderReaderReader/Device/Device/Device/Device NNNNetworketworketworketwork:::: Automating the configuration and maintenance of multiple devices across several facilities is a necessity

Data Integration:Data Integration:Data Integration:Data Integration: Coordinating multiple data structures is essential to a successful deployment

Hardware Flexibility:Hardware Flexibility:Hardware Flexibility:Hardware Flexibility: ability to choose active tag features without compromising core requirements.

Tag size, cost and range, combined with challenges of simultaneous identification of multiple tags (tag density), limited bidirectional capabilities, incompatible data collection architectures and expensive network retrofits have limited too many high potential projects from moving past the pilot stage.

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ISV

Integration

Capabilities

As a result, high quality independent software vendor (ISV) vertical business intelligence solutions and internal integration projects at large enterprises can ‘stay in the box’

since the ROI is not readily available due to high costs. Choosing software and hardware that saves time and adds quality metrics shouldn’t be scary or difficult.

The challenges for the ISV in the field of RFID are many. While every project buyer looks to the falling costs of the tags as an indicator of project cost – costs of both RFID hardware

design and software development are increasing. Further, implementation is often estimated at 40% of total project cost. Demands on what the hardware and software are required to do are growing exponentially as clients look for interactive, future proofed systems that will increase their ROI over the lifetime of the system. Increasingly, ISVs are challenged to keep pace with the ever evolving technologies and customer expectations. Average 18 month software application development cycles force many ISVs to choose between bearing the expense and revenue delays of working with leading new RFID technologies and less flexible solutions with known issues and predictable albeit decreased potential to truly advance the client’s return on investment.

The Scope of The Scope of The Scope of The Scope of OpportunityOpportunityOpportunityOpportunity

GuardRFID uses its Argus Platform for all its solutions. GuardRFID ’s small

active RFID tags are 8 t ime8 t ime8 t ime8 t ime ssss fasterfasterfasterfaster than comparable solutions. GuardRFID offers flexible tag features. What if an ISV could fully integrate this affordable active RFID tag solution with a single day of effort? How would these features increase the solution value to cl ients, extend application of ISV software and increase the ROI to both the ISV and the end-user?

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Stretched integrators ‘stay in their box’ to extend

their investment dollar by ‘re-packaging’ hardware

and software solutions for a variety of applications while more appropriate, proven, and reliable advanced technologies may not even be offered to the client. As a result, ISVs and their clients often complain that repeated investments in RFID research and development are not bearing the return on investment many had expected. Yet RFID/RTLS, particularly 433MHz, is a maturing market – one that is sufficiently well understood that significant advancements in performance and costs effectiveness are available now.

Kick Open the BoxKick Open the BoxKick Open the BoxKick Open the Box

No one RFID tag technology is applicable to all implementations. Yet if one spoke with ten ISVs – each might recommend their single RFID solution – in an effort to extend their initial investment. This is completely understandable and good business. Yet, the reality is that different RFID systems are required for different applications. Issues with frequency appropriate for the application, environment, tag and reader range, remote monitoring, data throughput all have to be weighed against the business case. The biggest challenges are typically not with the vertical software, but with the underlying RFID hardware. Too many times projects with excellent application functionality are delivered, only to be limited by the capabilities and shortcomings of the hardware layers. How can you kick open the box and put your own stamp on successful active RFID deployments?

Execution, Execution, ExecutionExecution, Execution, ExecutionExecution, Execution, ExecutionExecution, Execution, Execution

If an integrator had an active RFID tag system that had the required features from small and disposable, to large and waterproof, and eight times faster than comparable offerings, would it add to the client ROI? What if an ISV could fully integrate this advanced active RFID solution into their existing vertical software solution with a single day of effort? What if the client could then add on different tags with different form factors over time?

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GuardRFID designed its Argus Platform as an integration friendly solution for its advanced and affordable active RFID tag and reader solution. Every SDK comes with a TestApp integration tool to lighten the load. Recognizing that the end client will purchase the software application that suits their particular market and environment, the Argus Platform was built on a combination of Java and hardware platforms to allow modular and simplified integration and design plus add-on of peripherals like CCTV, key entry and door locks. Fast integration of advanced RFID technology extends the value and functionality of third party offerings. In the end, the GuardRFID hardware will not be appropriate in every application. However, the Argus Platform allows the integrator to recommend GuardRFID products without the worry of taking developers off of critical projects to integrate yet another hardware solution that only does half what it needs to in order to link with the vertical solution. Why is GuardRFID’s Argus Platform technology easy to work with? GuardRFID took into consideration how RFID hardware is actually used rather than just pushing data and created a software piece to ease integration.

ConclusionConclusionConclusionConclusion

Kicking open the box on ROI and driving to active RFID TCO cost parity is a reality. Kicking open the box on ROI means offering clients the most advanced and cost effective solution for their application. New cost effective active RFID hardware that is fast, reliable and that has multiple form factors can be integrated into existing vertical solutions quickly and economically. The goal is to extend third party capabilities and attractiveness, garnering new customers and deepening the RFID penetration in existing implementations. Fast implementation exposes clients to new technologies that may improve how the system is used, deployed and interacts with other systems to save time and money. GuardRFID designed their complete affordable active RFID/RTLS solution so integrators won’t have to re-purpose older systems and can easily leverage new

fast, small and surprisingly affordable active RFID tags.

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About the AuthorAbout the AuthorAbout the AuthorAbout the Author

Zahir Abji is Founder and President of Guard RFID Solutions Ltd. Highly experienced in high technology development, manufacturing and management, Abji previously served as VP of Operations at Epic Data Inc., and President/COO of eXI Wireless Systems Inc. growing revenues from $2.0M in FY1998 to more than $10.0M in FY2002. Before joining eXI, Zahir spent over 16 years at Motorola in a variety of senior management functions, including leading product development efforts for wireless data solutions, and managing R&D and manufacturing operations teams for wireless data products in Japan, Singapore and Israel. At Motorola, Abji had overall responsibility for the development and implementation of the United Parcel Service Worldwide Package Tracking System, and delivered over US$450 million worth of business while in this position. He holds a Bachelor of Science Honors Degree in Bio-Medical Electronics from The University of Salford in Manchester, UK.

About GuardAbout GuardAbout GuardAbout GuardRFIDRFIDRFIDRFID

GuardRFID offers innovative and cost-effective technologies and solutions for tracking, location, identification and protection of assets and people. The GuardRFID platform has a standards-based, open architecture which allows many applications to share one backbone, providing true system scalability. The GuardRFID Argus Connector offers integrators shortened development and implementation time to enhance ROI. GuardRFID offered the first disposable solution for Infant Security and Patient Flow solutions in the Healthcare space and their revolutionary active RFID tag technology is the smallest available with speeds 8 times faster than comparable systems. High density of tags, secure anti-collision and two-way communication make the system truly unique, while the system’s cost-effective installation results in a significantly lower total cost of ownership. The information contained in this document represents the current view of the author on the issues discussed as of the date of publication. This White Paper is for informational purposes only. GUARD RFID MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

Unless otherwise noted, the example companies, organizations, products, domain names, e-mail addresses, logos, people, places and events depicted herein are fictitious, and no association with any real company, organization, product, domain name, e-mail address, logo, person, place or event is intended or should be inferred.

© 2008 Guard RFID Solutions Inc. All rights reserved.

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