Marijuana cultivation, Colorado

RFID tags along with the Internet of Things

RFID was the prototype for the entity-connected domains now being brought into the Internet of Things – but are the two technologies necessarily destined to contend with each other? Renewed interest in RFID suggests that it still has an important part to play.

Some 15 years after the term was first coined, technology companies have at last latched onto the Internet of Things (IoT) as the driver for the next wave of their market growth. However, an earlier attempt to do some of what the IoT now promises has demonstrated that they could be in for a prolonged wait if they fail to heed the lessons learned by the more mature technology.

When it emerged on the back of cheap silicon-chip production towards the end of the 1990s, radio-frequency identification (RFID), termed as a generic technology, promised to tag the world electronically. Using a chip attached to an antenna, whenever the tag passes near a scanner the radio waves provide just enough power for the tag to fetch a code from memory and deliver it by radio to the scanner. The technology makes it possible to track goods as they travel around the world, just as long as there is a scanner at each point. RFID has proved a successful technology that in several ways presaged the IoT. The question now is: how will it fit into the brave new IoT-enabled world?

IDTechEx is a research firm that has tracked RFID developments for many years. At the company's Internet of Things conference in Berlin in April 2014 its CEO Raghu Das predicted that cheap passive RFID tags will play a large part in the IoT. They can provide much of the data that smart sensors collect, pointing to the role RFID had in coining the phrase in the first place.

The MIT Auto-ID Center tried hard to popularise the term 'Internet of Things' when it was set up at the end of the 1990s to investigate emerging applications for RFID. However, Das stressed, there are important lessons for the IoT in the RFID experience – particularly when the core technology obscures the potential applications.

Simply changing the way that companies sell systems based on RFID has improved adoption by customers, or as one supplier candidly told IDTechEx: "When we called ourselves an 'RFID company' it was a disaster." When the supplier focused on the problems RFID could solve, sales improved.

Meanwhile, market-watching analyst Gartner developed the hype cycle, a graph that has captured the pattern of premature euphoria, excessive despair and eventual acceptance that almost all new high-technologies seem destined to pursue. It doesn't take long to work out that the IoT is powering up the incline towards the 'Peak of Inflated Expectations', to use Gartner's terms. At the end of Q2/2013, the firm put IoT as nearing the peak in 2013, following hotly behind Big Data. Gartner set the time before IoT reaches the 'Plateau of Productivity' at more than 10 years.

The idea that low-cost sensor nodes would proliferate into all aspects of life echoes perhaps the first IoT-like application that, just over 10 years ago, was making its way closer to the peak. In mid-2003, supermarket giant Wal-mart announced that it would push its major suppliers into putting ID tags on their products that would respond to automated radio-frequency readers, so that the mega-retailer could track them more easily through its warehouses and shops.

A few months later, EPCglobal was formed as the successor to the Auto-ID Center, promising standards that would ensure tags would work with the widest variety of readers. It looked then as though RFID had arrived. If big-hitter Wal-mart was going to do it, surely every retailer would have to implement RFID to avoid losing even more market share?

At first it looked like a retail revolution in the tipping, but then... it all went quiet. A couple of years later, one of the biggest consumer consumables brands in the world, Procter & Gamble, argued that it was finding it hard to justify the introduction of RIFD even if the tags cost less than three US cents. Some products were downright resistant to RF tagging – the dishwasher tablets the company sold in the US were packaged in foil and then put into a foil-lined box that could shield the tags from readers.

Companies gradually found business cases for some classes of product – often with more than a dash of in-house innovation – and some have started mass rollout. Instances of progress are out there, but it's taken a decade to come about. Earlier in 2014, UK giant Marks & Spencer (M&S) embarked on a mass rollout of RFID, primarily for clothing. This marks the extension of a long-standing partnership between M&S and technology provider Avery Dennison.

The change has come through less attention on tagging for tagging's sake – which put the focus on tag cost alone – and the cost of lost clothes. Retailers such as M&S have found that they can lose around 6 per cent of sales because sales staff cannot find clothes of the right size for the customer. Often that is because the shop has run out of stock but as much as 25 per cent of those lost sales are for clothes that are stashed in the wrong place, so staff are unable to find them.

Being tucked away in obscure corners has, arguably, become the fate for a lot of RFID applications, but they add up to a large combined value. According to IDTechEx, cumulative tag sales for retail applications reached almost 6.3 billion by the start of 2014, only beaten by contactless smartcards and payment key fobs at 7.4 billion. The process has even extended to animals and plants.

The US state of Colorado allows marijuana to be grown by accredited farmers. To account for each plant, growers have to tag them using RFID technology. State officials now turn up unexpectedly at farms to check for pot plants armed with RFID scanners to see if plants have gone missing. If a plant dies, the farmers need to comply with a procedure to have it – and its tag – deleted from the statewide database.

One of the most unexpected applications is in oil prospecting where tags can be used to open and close wells. Oil companies do not simply push a drill bit down a hole and wait for oil to gush out. Instead, the borehole is lined with casing elements designed to stop water getting in and mixing with the oil.

Drillers fire perforating guns into the side of the pipe at the depth of the oil reservoirs to allow the liquid to flow out. The problem is firing at the right depth. Just over a decade ago, Marathon Oil came up with the idea of using RFID tags. One method is to put the tags, which can also be used for inventory management, into the casing elements. A scanner fitted to the perforating gun reads each tag as it descends, firing when it passes the one at the depth of the oil reservoir.

After almost 15 years RFID is a highly diverse sector that, according to IDTechEx, is worth more than $9bn worldwide. In a decade's time that could have expanded to $35bn, with retail alone accounting for much of today's total RFID market. Unless the IoT takes a different path, it will be a similar long-term, quiet revolution for that area of technology as well. 

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