The market for business software to handle data generated by RFID (radio frequency identification) chips is predicted to reach $192m in 2010, a big increase from the $24m the nascent market generated last year.

A study by analyst Venture Development predicts that IT giants such as Cisco and IBM will adapt their technologies to cash in on the market for RFID middleware or enter the market through acquisition. Previous mergers included NCR's purchase of IC Velocity and BEA Systems' purchase of Connecterra last year. Further acquisitions of pure-play RFID players is likely, Venture Development's RFID Middleware report predicts. Venture Development names IBM and WebMethods as the firms most likely to make acquisitions of RFID software start-ups.

"Although the larger players are not as 'flexible' and 'mobile' as their smaller counterparts, their desire to increase the total available market is expected to increase M&A [Merger and Acquisition] and partnering activities, eventually leading to a smaller, less fragmented, and more standardised industry," Venture Development reports.

The RFID middleware eco-system currently includes start-ups, many focusing on developing architectures for the real-time processing of RFID-generated data, such as RF Code, GlobeRanger and OATSystems.

Meanwhile, application server, messaging and systems management vendors, such as IBM, Microsoft, Oracle, SAP and Sun Microsystems, are busying themselves adapting existing enterprise applications and platforms to support RFID data across a range of business processes, an approach that omits the stand-alone RFID middleware platform favoured by pure-play vendors.

Elsewhere, networking vendors such as Cisco Systems, Omnitrol, Blue Vector, and REVASystems are developing software for network appliances (such as switches and routers) that allows RFID readers to plug into computer networks.

Academics are also getting into the act. Low barriers to entry are encouraging universities such as UCLA and the University of Arkansas to lend their services to testing, consulting, and RFID middleware development projects alongside offering classes and training in RFID technologies. ®

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