How does passive RFID work and when it makes sense to use it? Passive RFID has a cost-efficient use for tracking certain types of assets—but not in certain dynamic environments such as data centers. In this 101-style, RFID educational guide, find out if passive RFID is really economical for your needs and what happens when you choose the wrong technology to do the job.

Researching ways to improve asset tracking, inventory management, or automation for your data center is NO easy task.

While radio frequency identification (RFID) is useful for identifying and securing items with linear movement, which type should you use: active or passive RFID? The wrong choice can cost a data center time and money, so how do you determine what’s best?

Making the most of RFID asset tracking involves more than just tagging assets. It also takes knowledge from experts—and your own research—and a carefully crafted plan. If executed properly, RFID can increase your productivity while cutting losses.

You’ll always know where your inventory is and what condition it’s in, which makes maintenance simple. Why waste money repairing and replacing equipment that you could simply protect with the right solution?

Essentially, while passive RFID has a reputation as the cheaper alternative, it can actually backfire for organizations that are considering passive for dynamic environments or use cases that involve critical assets that move in non-linear or highly predictable ways. By contrast, active RFID offers several advantages that are earning it more users in data center asset tracking.

How Passive RFID Works

passive rfid technology being held by a man

To see whether passive RFID fits a use case, it’s important to first understand how the technology works. Passive sensors reflect radio waves to identify hardware. The tags themselves do not have a power source. Instead, they rely on a tag reader that beams energy to the sensor, then processes the response.

The lack of onboard power is what makes this technique “passive.” By contrast, active RFID employs tags containing their own battery to emit an ongoing signal. This difference matters since the active battery enable many valuable functions that passive RFID lacks, like real-time automatic reports.

When Does Using Passive RFID Make Sense?

Using passive RFID makes sense in a few specific cases, such as for tracking building keys, paper documents, cars in parking lots, or clothing. These items can all be scanned near a reader and do not need their own power sources or elaborate data sets. Essentially, as long as you can get assets close to the tag readers, you can use a passive system.

Unfortunately, many situations do not lend themselves to passive tags. For example, how do you use a passive system to track items in large, unpredictable areas like data centers? More complex situations like these call for active RFID.

To determine which type of RFID solution you should use, start by assessing what success outcomes you want to achieve from the technology. Do you have some of the same use cases that we’ve been able to help data center customers achieve?

  • Demonstrate the ability to accurately locate assets anywhere in the data center on demand.
  • Demonstrate the ability to be alerted in real-time when assets are in unexpected locations.
  • Demonstrate the ability to view real-time reports for assets that are on and off the network.
  • Successfully trigger an alert in a simulated environment based on the conditions set.
  • Successfully review the deployment method for multiple configurations and installation ease of use.

Almost all of our customers tried but were unable to achieve the above outcomes using passive RFID. However, all were able to achieve these outcomes and many others (e.g. asset lifecycle tracking, environmental monitoring, and power monitoring) with RF Code’s active RFID solutions. Keep this in mind as you read on.

Passive RFID: Low Cost…Or is It?

As mentioned, people often default to passive RFID tracking because they think it costs less. However, in many cases, this proves to be a false economy.

Less Upfront Cost, But...

While there is less upfront cost, passive methods come with their own indirect costs and inefficiencies that can hurt your bottom line—especially when it comes to data centers and IT infrastructure.

Misaligning your tracking method with your needs can cost you greatly. For example, when it comes to the total cost, active RFID can actually cost your data operations half as much as a passive solution! That’s why it’s critical that you know what you want to accomplish before deciding on a solution. Then you can estimate the relative costs of each system and make the more economical choice.

Benefits Left on the Table

Aside from not always offering the lowest cost, passive RFID also suffers from other disadvantages. Passive tags typically are void of a power source requiring a separate device to read a bar code limiting real-time data collection and automation. Passive tags also provide point-in-time accuracy meaning that the accuracy of the data is limited to when the item gets scanned. If that item is moved seconds after the scan, the data is useless.

These limitations render the technology useless for environments where assets are moved and stored in different areas throughout an asset's lifecycle. Some areas also legislate against the radio wave frequency it uses—once again rendering passive tracking useless if misapplied.

The Dangers of Choosing the Wrong RFID Technology

passive RFID

Any asset tracking system has its pros and cons. The appropriate RFID solution can make a huge contribution to your company—but the wrong choice risks damaging your operations and your bottom line. An established integrator can assist you in avoiding problems.

Did you know? An active RFID solution can automate processes, track asset location in real-time, eliminate redundant asset purchases, and reduce human error.

As an example of using the right tool, IBM deployed RF Code's systems globally to save their business $42 million! Here’s what they did.

IBM first field tested passive RFID and active RFID to determine which solution would work best for their use cases. They used an enterprise asset management solution containing several components—active RFID asset tracking and environmental sensors, readers, and asset management software like RF Code’s CenterScape—that all work in tandem to provide IBM's data center operators with 99+% asset data accuracy.

Once the field test was completed, the IBM team recognized that a passive RFID solution—despite its initial cost savings—could not deliver the outcomes and long-term savings it desired.

Active RFID proved the smart choice for IBM since it:

  • reduced the cost of manual asset tracking efforts
  • reduced write-offs and misplaced assets, which were previously thought lost
  • lowered reconciliation-related costs
  • nearly eliminated their current inventory process
  • is on track to helping save IBM a total of $42 million over the next five years

Had IBM chosen a less efficient passive system, they wouldn’t have saved nearly as much time and money. In fact, IBM acknowledged a passive solution would have likely cost its data center more than RF Code's active asset management solution.

Active RFID offers large read ranges and in-depth information. You can easily track and assess environmental and asset conditions even with thousands of sensors operational. From start to finish, you get real-time granular data at the rack and server level. This automated, detailed lens is why in more and more data centers, active RFID has turned out to be the right solution.

Adopt What Makes the Most Sense for Your Business

The wide range of costs and benefits for each type of RFID system makes it important to select what works for your specific needs. Analyzing these factors beforehand will ensure an easier and more cost-effective implementation in the long run.

Asset tracking can prevent expensive losses and damage—and the right asset tracking solution will also cost less and deliver more valuable data. RF Code’s RFID experts can help clarify the different options and help you find the best asset-tracking solution for your data center.

If you are researching passive and active RFID solutions for your data center or returnable assets, you can schedule a free RFID use case assessment with one of our solution specialists. We can help advise which solution makes the most sense for your particular needs. Schedule a demo today to learn more.