The RFID alliance network (or ecosystem) is interesting from an information systems (IS) perspective for multiple reasons. First, it is an old technology with a brand new use (tagging retail products and other high volume items), making it interesting to study how firms interact based on the technology and related technical components. This allows us to empirically study concepts such as appropriation of value, as well as the impact of the technology specifics (e.g. hardware, middleware, software, services) on the network of firms, to, for example, determine whether competition occurs at the system level or component level.
Second, it is a terrific case study for innovation in information systems, including studying how established firms branch out into this new industry, and how startups fare with alliances and cross-boundary innovation, following, for example, who studied firms in the semiconductor industry.
Third, the RFID ecosystem may develop a platform, similar to other technology platforms such as operating systems, and so can be used to confirm or disconfirm various theories around platforms;
Platforms
The word platform has entered into common use, but often in a vaguely defined way. Breshnahan and Greenstein describe a platform in general as "a bundle of standard components around which buyers and sellers coordinate efforts." They also note that "the nexus of compatibility standards between hardware and software is the hallmark of a platform". Gawer and Cusumano define a high-tech platform as: “an evolving system made of interdependent pieces that can each be innovated upon.” Both definitions highlight the interdependency of products and services, and the ability for multiple actors to innovate, by focusing on each component independently. Implicitly platforms have a network connotation, where each product or service is a node that is in some way connected to the other nodes.
Henderson and Kulatilaka are both broader and more precise. They define a platform as:
"a set of capabilities used by multiple parties in a manner that:
1. Creates options value through design efficiency and flexibility,
2. Creates network effects that include both connectivity and effects due to a complementary system of goods and services, and
3. Has explicit architectural control points influenced by the platform investors."
Capabilities include people, process, technology, and organization, making it far broader than technology alone. They also conceive of a platform as a system of interacting components. RFID tags, with the attendant tag readers, computer hardware and software, and related services qualify as a platform in this sense. Network effects come in two forms. Either a user benefits directly from the existence of other uses, such as with a telephone, or the user benefits indirectly due to the existence of complementary products, such as a PC owner who benefits when a large base of PC’s results in wide availability of software [12]. Clearly, users of RFID tags (e.g. retailers) benefit when all their products are RFID enabled, by for example, improving inventory management; similarly, producers of goods tagged with RFID’s benefit when the entire supply chain can use the tags to track the goods to the point of sale rather than just to the loading dock. Based on all these definitions, and the characteristics of RFIDs, the RFID ecosystem is likely to mature into a platform.
