Monday, June 26, 2006

What Is The Physical World Web?

What happens when objects in the physical world are connected?

I got a lot of emails about my Physical World Web 2.0 post and I thought it would be a good idea to show how one industry is using the Internet of Things to solve just one of it's billion dollar problems.

There are endless multi-billion dollar problems (which create opportunities) that can be resolved using RFID. There are at least two revenue models from this.
The first is the cost to solve the problem initially, and then the recurring revenues generated from these solutions.

See the enormous opportunity?

Keep this in mind, here is a simple solution that solves a $7b problem, but will create some exciting revenue opportunities too.

"Liquor shrinkage amounts to a $7 billion problem each year in the United States.

Treasure Island (TI), a Las Vegas hotel and casino, has installed a system utilizing RFID to track the amount and type of liquor its bartenders pour.

The Beverage Tracker consists of RFID-enabled liquor spouts, an RFID interrogator (reader) and software".

Try to imagine these liquor spouts as being Internet connected PCs, and creating their own network.

How it works:

"The spouts, which TI employees attach to every liquor bottle, contain a battery-powered 418 MHz RFID tag and a measuring device. Whenever a bartender pours a drink, the tipping of the bottle turns on both the tag and the measuring device, allowing the spout to measure the volume of liquor poured (in ounces) before the employee tips the bottle back up.

The tag then transmits that information to the interrogator's antenna, attached to the ceiling above the bar.

The spout's tag has a maximum read range of up to 100 feet from the antenna.

It transmits not only the unique identification number of its microchip, but also the brand and size of liquor bottle to which it is attached, as well as the amount of liquor poured. All of this data is transmitted in real time to the receiver linked to the bar's existing computer network via a wireless Internet connection. The time of the pour is recorded by the time the data reaches the computer network, about one second after the liquor was poured".

This is your barcode.

The current liquor spout used today on most liquor bottles determines the amount of liquid to be issued per pour is informative, but to what degree.

This is your barcode on steroids.

This RFID spout not only measures the amount of liquid but provides through "push" technology, various information (what, when, where,) that will allow the retailer to make his business more efficient and offer other revenue opportunities.

Treasure Island, and all retailers will know number of drinks, when (time of day), where (what bar/restaurant, casino game), what (specific brand) and who (what bartender).


Anonymous said...

I'll drink to that!

Anonymous said...


I'm not sure where you're going with this whole RFID thing. Seems to me that most of the obvious uses of RFID are pretty strictly on the business side, not on the consumer side -- I don't know how easy it would ever be to read the most common RFID chips at any appreciable distance with a mobile phone, for example -- don't you have to get really close to them, unless you have a really powerful reader? How much more convenient is that than to read a bar code?

And how about privacy issues that RFID chips raise? And how could a consumer use a RFID chip for his own purposes, as opposed to printing out a personalized bar code?