RFID company Savi Technology seeking to move beyond hardware into more complex software, data analytics; shift reflects the need for technology companies to continually reinvent themselves as their products mature

Newly independent, Savi pursues commercial work

By Marjorie Censer, Saturday, August 17, 10:21 AM

After cutting its teeth manufacturing special tags to track military equipment, Alexandria-based Savi Technology is moving beyond hardware and embracing data analytics, particularly hoping to attract more commercial work. The shift reflects the need for technology companies to continually reinvent themselves as their products mature. In Savi’s case, the 24-year-old company was one of the pioneers in selling radio-frequency identification, or RFID, tags to the military, which has relied on them to help manage supplies around the world.Defense-contracting giant Lockheed Martin saw enough promise in Savi’s work that it snapped up the company in 2006, only to sell it last year to affiliates of the private-equity firm LaSalle Capital as the military continued to draw down operations overseas.

Since then, Savi has been moving far more aggressively into commercial work. In recent years, the company has diversified beyond traditional RFID technology, moving into other kinds of wireless tracking that rely on cellular and satellite networks.

Commercial work, said Bill Clark, Savi’s president and chief executive, is the company’s
fastest-growing business, though government still makes up about 85 percent of its revenue.

Leslie Hand, research director at IDC Retail Insights, said the timing is right as consumers and companies have become more comfortable and interested in tracking.

“You can buy trackers to attach to luggage, to attach to your car,” she said. It “is kind of [the] dawn of a new age in how we think of leveraging location-based technologies to improve the way we live.”

Last year, Savi formalized a deal with global testing company SGS that allows the company to use GPS and satellite technology to track freight movements. SGS has deployed the technology in Kenya, Ghana and Tanzania, Clark said.

With the tracking technology in place, the company can see if a truck leaves its route or its cargo is removed and then can act by calling the driver or alerting police.

Savi also is readying a much larger shift, moving into data analytics related to its tags. By bringing together all of the information its technology picks up, the company is hoping to make observations that could save the government and commercial businesses money, Clark said.

“We’re now looking at what you can discern, what insight you can get from this data,” he said.

The move is part of a broader initiative to package hardware, software and analysis together. “The world today wants a complete solution,” Clark said.

A decade ago, virtually every RFID project required customized planning, Hand said. “Now there’s more kind of out-of-the-box capabilities, so it becomes more accessible to more organizations,” she added.

Still, Savi may face challenges in moving into commercial work, said Raghu Das, chief executive of British market research firm IDTechEx, which has been tracking RFID technology for 14 years. The company had great success winning the military market, he said, but simply hasn’t put the same emphasis on commercial industries.

“They weren’t really actively pushing into other areas . . . but they’re now forced to,” he said. “It’s challenging to an extent that other people have been trying to break into these markets.”

In taking on that challenge, Savi officials said the company will benefit from its new independence. Since its founding in 1989, Savi, which was previously headquartered in Mountain View, Calif., has been owned by three defense contractors: Texas Instruments from 1995 to 1997, Raytheon from 1997 to 1999, and Bethesda-based Lockheed from 2006 to 2012.

“When you’re owned by a defense contractor — whether intentional or not — your focus is kind of solely on the Defense Department,” Clark said. Now, “we can go where the market wants us to go. We’re not predisposed to federal is first.”