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Rapid scaling will push RFID data center revenue to $1B in 2017

RFID-enabling data centers is on the way to becoming a $1 billion business. A new survey released by Frost & Sullivan says that the RFID data center market was worth $96.3 million last year, and will grow to $953 million in 2017.

Companies like Cisco, Bank of America and Wells Fargo have long understood how RFID can help when it comes to tracking assets like blades, servers, and data tapes. However, many large financial institutions have yet to begin to understand how RFID can help them to meet regulatory obligations.

At RFID Live in April, Cisco won the award for Best RFID Implementation. In the last year, Cisco has tagged over 500,000 assets at 62 sites covering more than 1.3 million square feet of lab space.

“Our engineering team loves the fact that they can see where their assets are,” says Maryanne Flynn, Cisco’s director of operations. “We have assets that need to be calibrated every 30 days and it would often take a week to find them. This is a huge opportunity for us. Cisco prides ourselves in predicting market transitions. Our experience has been remarkable.”

According to Frost & Sullivan, the growing requirement for faster and more accurate tracking and tracing of IT assets in data centers is prompting data center operators and hosting service providers to increasingly adopt RFID.

Because RFID can quickly locate and track innumerable servers and vast numbers of data tapes in large data centers, companies spend less time looking for valuable assets and also lower replacement expenses.

“The lack of asset visibility sometimes results in duplication of existing assets, ultimately adding to total costs,” says Frost & Sullivan senior research analyst Nandini Bhattacharya. “RFID can save costs by not only eliminating duplication, but also by preventing theft and loss through real-time tracking.”

RFID’s efficiency has attracted buyers from the financial sector, government agencies, and IT companies. To further boost adoption, Bhattacharya says that industry associations and governments across all nations need to collaborate to institute a common standard. Government and industry regulations already mandate the maintenance of data and IT assets — a key factor aiding the uptake of RFID in data centers.

“U.S. financial sector companies must comply with the Sarbanes-Oxley Act of 2002, for example, which regulates data storage and management,” says Bhattacharya. “The payment card industry has also set security standards for customer information, while other sectors have established regulations for IT asset audits and data confidentiality.”

Apart from favorable regulations and mandates, the technological advancements and availability of cost-effective solutions offering faster return on investment have attracted more end-users to the market. Pricing is a crucial purchase factor in this market and even though the costs of the technology have dropped in the last couple of years, it is still prohibitive to organizations with budgetary constraints.

Moreover, as RFID in data centers is still an emerging application, most potential end-users are still not aware of the technology. To gain more visibility, RFID developers need to create robust and innovative software platforms that can support the convergence of various technologies.

“Participants will find a huge market in Asia-Pacific because of the likely consolidation of the hosting service providers and outsourcing of services to the region,” noted Bhattacharya. “Among all regions, the Asia-Pacific is expected to grow at the highest compound annual growth rate of 72.7 percent from 2010 to 2017, followed by the Europe, Middle East and Africa at 46.3 percent, and the Americas at 35.1 percent.”

 

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