Real-Time Location Systems (RTLS) are underutilized in many factories, warehouses, hospitals, and smart offices. Moreover, the typical systems offered by IT solution providers leverage standalone software deployments with proprietary hardware.
However, IT hardware costs will drop as more customers abandon proprietary systems to reduce vendor lock-in, increase application interoperability, and reduce the initial deployment costs, according to the latest market study by ABI Research.
As a result, the sector will diversify and complement hardware sales by monetizing deployments through service models augmented by additional software features -- such as analytics and device management.
Real-Time Location Systems Market Development
According to the latest ABI Research market forecast, RTLS service revenue will be worth $3.7 billion in 2022 and will rise to $24.9 billion by 2030, at a compounded annual growth rate (CAGR) of 26.8 percent.
"As RTLS hardware, such as tags and anchors, become increasingly affordable, hardware revenues are expected to become less reliable," said Mark Qi, research analyst at ABI Research.
Therefore, many RTLS IT vendors that traditionally focus on hardware offerings are looking to find new value in an increasing volume of deployments, even as hardware revenues decrease.
RTLS service offerings can vary with many traditional IT hardware vendors. As an example, Kontakt.io, Estimote, and Quuppa now support software solutions.
Beneficial features for enterprises looking to deploy RTLS include vertical-specific analytics, such as equipment usage metrics, footfall patterns or spaghetti diagrams, application integration, and device management to monitor tag activity and support system health.
All these solution features can be provided as services from forward-thinking RTLS IT vendors.
While monetization solutions vary greatly by vendor, they are primarily based on a per-tag subscription, allowing for consistent and scalable profits with larger, high-tag deployments.
According to the ABI assessment, some IT vendors are further diversifying. For example, Centrak acquired system integrator Infinite Leap to augment its service offerings.
Meanwhile, vendors of other hardware networks such as smart lighting provider Cooper Lighting -- and Wi-Fi network providers such as Cisco and Juniper Networks -- all offer RTLS platforms based on software integrations.
Outlook for Real-Time Location Systems Growth
On the impact of RTLS deployments gaining momentum, Qi says, "The move to more service models is because of the wider adoption in the RTLS industry. This will be advantageous to end users by removing many major barriers to adoption. RTLS vendors will benefit from consistent revenue and a much larger market."
That said, I believe RTLS vendor sales and marketing resources should be devoted to helping customers develop a compelling business case, while they prepare to plan, configure and build more scalable solution deployments.