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Talking Technology By Steve Burns, Capital News contributor Radio frequency identification technology (RFID), which consists of miniscule microchips that listen for a radio query and respond by transmitting their unique ID code or serial number, dates back to the Second World War where it was used for aircraft identification. It is a fairly unknown but potentially transformative technology. If the current buzz is true, RFID technology could be used to track the movement of every product in the world. In this column we go inside Identec Solutions, a Kelowna based company which delivers active tag RFID solutions to companies around the world, for an update on the company’s progress with president John Kingsmill. According to Hewlett-Packard, “RFID is essentially in the same position occupied by mobility and wireless technology a few years ago. It is poised to spark a global revolution by enabling the delivery of the right goods to the right destination and at the right time.” The race is on to capture market share in this rapidly growing industry. A recent report published by Venture Development Corporation, which specializes in the RFID industry, estimated that global shipments of RFID systems in 2002 reached about $965 million US. Venture estimates that this market has a five-year compound growth rate of 23%, and will explode to $2.7 billion US by 2007. The Yankee Group, a similar research firm, estimates that the market opportunity will be $4.2 billion by 2008. With the acquisition by Symbol Technologies, a leading barcode manufacturer, of MATRICS, a pre-earnings, passive RFID manufacturer, for $230M US cash in the spring of 2004, further industry consolidation is likely to occur in 2005. “The increased focus on the RFID marketplace is as a result of Wal-Mart’s announcement that it will require that its top 100 suppliers deliver RFID tagged products by 2005, which will continue to fuel demand for both active and passive RFID technology”, says John Kingsmill, President. “In fact, the Yankee Group estimates that the top 100 suppliers to Wal-Mart and the Department of Defense will spend between $515 million and $3.8 billion US in 2004 on technology and services to support RFID implementations based upon electronic product codes.” Identec has an interesting history. The Company started in Kelowna in 1997 with seven founders and is now part of the Identec Solutions Group, which is headquartered in Austria. The Company now has fifteen employees and John Kingsmill is the only founder still involved. “Identec is focused on a particular niche in the RFID market, namely on intelligent asset management, which is delivered through our proprietary long-range active RFID system, named Intelligent Long RangeÒ (ILRÒ). Our active RFID solutions provide real time information on mobile assets by identifying, tracking and locating assets enabled by RFID hardware and by capturing and processing the data from the systems using our integration software.” Identec excels at tracking vehicles, containers, racks and other reusable transport materials. Here is a quick summary of some of their very interesting projects and news: • With the increased threat of terrorist attacks, companies like UPS are using Identec’s RFID technology to tag and track every vehicle on site. Security is built in to determine what trucks should be on site, where in the facility they are located and whether or not they should be entering or leaving the facility at that time. • Bogotá Transit Authority, in partnership with McKinsey & Company, a global strategy consulting firm, to implement an RFID system to verify the validity and location of almost 25,000 transit buses. • Thomas Built Buses, a subsidiary of Freightliner, one of the largest school bus manufacturers in the world with over 1 million square feet of warehouse space and 88 acres of finished goods parking, uses Identec’s technology to track buses throughout the entire manufacturing process. • A leading U.S. based heavy equipment manufacturer uses Identec’s RFID tags to track, locate and manage 5,000 engines through post production stages. • Another leading manufacturer uses Identec’s technology to track the movement of its turbine systems with up to 500 vendors supplying parts to their job sites located throughout the world. The coordination of such massive projects is a huge task and any delay in a project could cost this company millions of dollars in penalty payments. Identec’s RFID technology allows them to have parts shipped by suppliers to the job site just in time, locate and track all of the parts and to find the right part within the right time and in the right sequence. • The Construction Innovation Forum in the US awarded the NOVA award for innovation to Identec for their wireless concrete maturity monitor, which was co-developed by International Road Dynamics. Identec was recognized for this innovation in a category with over 400 companies nominated. • Identec has created a new mobile reader, called i-Smart, for use on forklifts, vehicles and cranes. It is a high-end reader that supports a number of peripherals including wireless LAN, cell modems, satellite modems and GPS. • The company has just completed a Strategic Alliance agreement that launches them into China. Identec is one of those companies in the Okanagan’s technology industry that portrays a common theme. “We could be located anywhere in the world but we have chosen to make this work in Kelowna”, says Kingsmill. In fact, I would go further. Based upon my research of the RFID industry, I would say that not only has Identec chosen to make it work here but that they have become the leader in the active RFID tag industry. They are focused on a rapidly growing market niche, compete globally with some of the largest technology companies in the world and do so with a dynamic team of innovative professionals. Although the process of determining the right combination of projects can be exhausting, Kingsmill is encouraged “we started last year with only two customers and now we have over 40 customers in different industries. We are finally being recognized as the world leader in this field. Instead of doing missionary sales trips, Fortune 500 companies are now seeking out our expertise.” Kingsmill has advice for other technology leaders that are seeking to develop their innovation: “Be patient as developing your innovation takes time. The marketplace may not adopt your product as quickly as you may hope. Despite the ups and downs of the innovation cycle, you need to have a positive outlook that is based upon a crystal clear vision of how your innovation adds value and a healthy, well-founded belief in your product’s potential. These are critical elements that will help your company become successful in today’s technology marketplace.” The Identec team is a great example to all of us of sticking with your innovation. Their patience is finally paying off – world-wide recognition as the leading company in their field. Steve Burns president and CEO of Burns Innovation Group Inc. and Steve Burns Inc. Chartered Accountant which provide consulting and accounting services to technology companies. You can reach him at 763-4716 or via e-mail at: |
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