"RFID Weblog: Help us put the market in perspective. Where are we in the life cycle of RFID investing and development?

Nolan: It's still mid-to-early for RFID. There is a tremendous amount of customer action but not a lot of budget devoted exclusively to RFID technology or applications build on top of the data streams.

The Wal-Mart experience is still early insofar as production systems are concerned, and outside of retail and CPG you can't find vertical opportunities that have critical mass. DoD and DLA (DoD logistics) have spent a lot but I think this is a difficult market for startups to pursue. I wish I could tell you when it reaches peak, but I think over the next 18 months we're going to develop a lot of experience in the market that will be necessary to get to the next level, so maybe next year we'll see activity start to spike up again.

Surprisingly, valuations of RFID companies have held up pretty well through the "trough of disillusionment" of the Gartner Hype Cycle, but I also think that is a function of there being a small group of investors that have specialized in this area (not exclusively but as a core area) and see the progress that is being made. There was an overinflated set of expectations attached to RFID a year ago, but the hype was not without substance so fast forward to today and we see large companies actually doing productive things with the technology and remaining committed to it. "