RFID Gains Leverage in the Data Center

The Sarbanes-Oxley compliance requirements for financial institutions have that industry leading the charge toward the use of RFID technology to track data center assets.

Sarbanes-Oxley requires companies to accurately show that they really own the assets they say they do, and that equipment holding financial data is controlled and secured. Similarly, businesses covered under the Health Information Portability and Accountability Act (HIPAA) also have to keep IT assets under tight control.

“You have to turn in your reports every quarter,” says John Fricke, vice president of the Financial Services Tech Consortium and chief of staff, “Think about it: Time is money. For a bank the size of Bank of America, we were able to reduce inventory time by 90 percent, Wells Fargo by 78 percent and Chase about the same amount.”

The consortium, made up of leading North American-based financial institutions, tech vendors, independent research organizations and government agencies, has been working to develop standards for RFID-based IT asset tracking systems, including pre-tagging of equipment at the manufacturer.

It’s an area of RFID creating a lot of buzz right now, according to Mark Roberti, editor of RFID Journal.

Bill Conroy, senior vice president and infrastructure optimization executive at Bank of America, has called the use of RFID for data center inventory “a no-brainer.” Last year the bank switched to RFID in 17 data centers and, according to this blog on the Web site of tag vendor ODIN Technologies, rolled it out in five data centers in 13 weeks.

Dealing With Hype

There’s a lot of enthusiasm for this use of RFID technology, according to Andrew Nathanson, director of  research operations for VDC Research Group, but he also feels that part of his job is to quell some of the hype. At the same time, he calls this use of RFID more recession-proof than others because of the compliance regulations.

While the overall global RFID market grew nearly 35 percent from 2007 to 2008, to reach nearly $4 billion, VDC expects growth to fall to 11 percent this year.

Nathanson wasn’t willing to break IT data center asset tracking out of those numbers, but ABI Research has predicted that IT asset tracking will account for more than 10 percent of the RFID market by 2013.

Still, Nathanson pointed out that it took 30 years for bar codes to become widely used. He said:

“If you have to have a quarterly report, just having one person going out and scanning your assets can cost hundreds or thousands of dollars, while this can save on the actual labor side.

“In addition, you can get much more visibility and greater utilization of your assets by using RFID with other applications that are available via the software. There’s a lot more value there than just what a barcode solution can provide. The return on investment is really strong; it’s in the six- to 12-month range, depending on how many assets you’re talking about. I’m still seeing really strong adoption, close to 20 percent [for IT asset tracking in the overall market] and that’s a compounded annual growth rate through 2010.”

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