Manufacturers Shipped Over 4 Billion Embedded Systems/Devices in 2006

Recently published research by Venture Development Corporation (VDC) concludes that over 4 billion embedded systems/devices were shipped worldwide in 2006. According to VDC’s 2007 Embedded Systems Market Statistics report, significant growth in the number of embedded shipments is expected to continue over the coming years.

Furthermore, VDC estimates that embedded systems using no formal operating system (with no software on the device that is considered to be an operating system by the project team) or in-house developed operating systems as their primary operating system represented the majority of total embedded system shipments in 2006. Through 2009, VDC expects the number of embedded devices shipping with a commercial and/or open source operating system to grow at a faster rate than shipments of devices with an in-house/proprietary operating system or with no formal operating system.
The trend toward the use of formal third-party operating systems within today’s embedded systems projects is driving this transition. However, VDC believes that migrations in operating system selection will impact total embedded unit shipments less visibly in the shorter term, as the number of products shipping in any given year will always be heavily represented by designs from years past.

“Further complicating this analysis is the fact that embedded systems may contain one or more operating system environment and/or processor (either multiple processors or multi-cores on a single chip), offering additional opportunities for obtaining royalties on run-time environments,” says Matt Volckmann, Senior Analyst/Program Manager with VDC’s Embedded Software Practice. “The growing complexity per embedded system/device (in terms of hardware and software requirements) will therefore also impact the opportunity per unit shipped going forward for embedded system solution providers.”

In addition to providing key data on the annual shipments of embedded systems/devices, VDC’s 2007 Embedded Systems Market Statistics report also specifically addresses many other important developments and trends within the embedded systems market, and offers core statistics on the number of embedded developers and embedded development project starts. The report also includes convenient one-page summaries of end-user survey data by vertical, region, and primary processor architecture as a valuable reference source for companies interested in better understanding the embedded landscape by particular communities of interest.

Feature-Rich, Low-Cost Software Modeling Solutions Driving Adoption, Creating Pricing Pressure

Recently published research by Venture Development Corporation (VDC) indicates that the availability of low-cost and free modeling tools is contributing to the growing use of standards-based modeling tools. Just as software programming evolved from the use of machine code level to more formal languages, software modeling tools allow developers to further abstract design and more easily address issues central to program’s architecture while insulated from the numerous details necessary to implement the system.

With the percentage of surveyed developers using tools typically priced below $1,000 having increased from 2006 to 2007, the growing functionality and penetration of free and low-cost modeling solutions have caused some market participants to reevaluate their strategies. According to Chris Rommel, Research Associate with VDC’s Embedded Software Practice, “The release of Aonix’s OpenAmeos into the open source community and Telelogic’s ‘Modeler,’ a free UML 2.1-based modeling tool announced in January 2007, respond to these challenges with the hope that adopting developers would eventually seek additional functionality and/or purchase other solutions from their larger tool sets.”

According to Rommel, “While this rise in functionality and affordability certainly permits a greater number of developers to experiment with UML, the level of additional functionality required by new adopters will ultimately fuel any subsequent upgrades to more sophisticated and higher-priced tools.” Furthermore, the proposed acquisition of Telelogic by IBM may cause some developers to reevaluate their current modeling solution that could further accelerate the adoption of low-cost tools.

Within the Volume V: Embedded Software and System Modeling Tools report, VDC explores these and other critical issues and offers several strategies for commercial software modeling tools suppliers to effectively compete in the embedded market.

IBM/Telelogic – Acquisition Update

What Happened?

The European Union’s Competition Commissioner, Neelie Kroes, announced that the initial investigation of the IBM/Telelogic deal has been completed and that the merger “could have adverse effects on competition” within the market for software modeling tools. As a result the EU has begun a second phase of investigation on October 3, 2007 to further examine the merger’s possible implications on the market.

This second phase of the review process gives the Competition Commission 90 working days to complete its examination, meaning clearance of the merger might not occur until February 20, 2008. In addition, if the Commission deems it necessary, a decision can be delayed an additional 35 working days, potentially pushing their judgment back until at least April 9, 2008!

In response to this announcement, IBM’s wholly-owned Swedish subsidiary, Watchtower AB, extended the acceptance period in regards to its cash tender offer to Telelogic share holders for the second time since originally declaring their intent to acquire Telelogic. Originally extended to October 9, the acceptance period’s deadline has now been set for 17:00 CET (11:00 EST) on December 7, 2007.

VDC’s View

VDC wonders if Watchtower’s date, well before that set by the EU, may help IBM to encourage a decision by the EU within the 2007 calendar year. Based on VDC’s market research, Telelogic’s 2006 acquisition of I-Logix has left IBM and Telelogic as the leading vendors of software modeling tools in the embedded market. While the merger completed and passed the antitrust review process in the United States, VDC believes that the EU Competition Commission’s decision may rest on IBM’s ultimate plans for the two companies’ competing offerings and the fate of Telelogic’s 1,100+ worldwide employees, 41% of whom are based in the EU.

To read additional articles on the IBM/Telelogic acquisition click here or here

Embedded Systems Manufacturer Indicate Future Commitment to the Linux Operating System

Natick, Massachusetts – October 3, 2007 – Recently published research by Venture Development Corporation (VDC) indicates that a significant portion of embedded software and systems engineering teams continue to adopt Linux as their primary target operating system. Furthermore, the research also suggests that this migration may be lasting, as the majority of current Linux users surveyed plan to use Linux again as their primary operating system on future projects.

Linux remains an attractive operating system choice for a range of embedded development teams for a number of reasons, including: royalty free run-time costs, advanced networking capabilities and technical features, the large base of engineers familiar with the Linux operating system, as well as many other factors. These and other findings from VDC’s Linux in the Embedded Systems Market report continue to suggest that Linux will remain one of the leading operating system choices into the future.

Linux has proven itself to be well suited for a wide range of applications across various industries, and continues to gain market share, despite not being particularly well matched for certain embedded applications types,” according to Matt Volckmann, Senior Analyst/Program Manager with VDC’s Embedded Software Practice. “Changes in the way that systems are designed will also allow Linux to continue to penetrate into segments of the market where the lack of capability was previously perceived as a barrier.”

A more complex question is how opportunities for commercial solution suppliers will progress given the promise of more widespread Linux adoption in the embedded market. Currently, a majority of Linux projects do not obtain their Linux distributions from commercial suppliers. However, innovation within embedded Linux to date has relied heavily on support from commercial suppliers like MontaVista and others to make Linux a more viable operating system option within the embedded market. “At the root of most of the challenges faced by commercial suppliers is the question of how to bring significant additional value to an operating system that is freely available, continually improving, increasingly supported by embedded system/component suppliers, and in demand from companies interested in decreasing their overall development costs and/or bill of materials,” says Volckmann.

While Linux has found its way into a number of embedded industries, one of the key opportunities for Linux over the next several years will be in the mobile phone market, where Linux is quickly becoming a leading application operating system, and manufacturers and telecom operators are rallying to drive more comprehensive, industry-specific Linux-based standards. VDC’s Linux in the Embedded Systems Market report, released in September 2007, explores these and other critical issues within the embedded Linux market.

For access to the full article, click here.

Embedded Systems Bulletin – September 2007

VDC attended the 2007 Embedded Systems Conference in Boston last week. This bulletin presents a summary of the event.

Embedded Systems Conference – Boston 2007

The ESC Boston event certainly seemed to draw a crowd of interested engineers, as exhibitors we spoke with generally expressed a level of satisfaction with show-floor booth traffic; however, some expressed dissatisfaction with the later opening of exhibit floor hours on Wednesday at 2PM rather than earlier in the day. This year’s TechMash 2007 combined the Embedded Systems Conference, Software Development Best Practices, and RFID World, in an effort to expand the level of attendee participation and collaboration amongst these technology areas. CMP officials confirmed preliminary figures suggested an increase in attendance of about 14% from last year’s ESC show.

THE “EMBEDDIES” GO TO:

Best of Show

National Instruments – LabVIEW 8.5 – Officially announced in August 2007 at the NI Week event, NI’s new version of its LabVIEW product offering provides a number of new additions and further extends the company expanding capabilities in the embedded systems development space. LabVIEW 8.5 includes graphical user interfaces for parallel dataflow modeling, a statechart design module, as well as a number of other advancements. VDC believes that the company’s flexible set of system development solutions, which also include LabVIEW Real-Time and a new trace toolkit, will continue to draw interest from embedded development teams looking to rapidly build, optimize, and debug designs based on increasingly complex multi-core hardware environments. For more information, visit www.ni.com.

Best Giveaway

GrammaTech offered exhibit attendees the opportunity to do some manual bug fixing without the help of an automated solution. At their booth, the company displayed a board of source code and any engineers able to identify a bug in the code won a free t-shirt. VDC gives points to the company for developing a product-related challenge that also doubled as a fun giveaway.

WALKING THE FLOOR

Continuing to expand their toolset to address the application layer, Mentor Graphics announced a new Multimedia Feature Pack for their Application-Ready Platform, which includes the Inflexion and the Platform UI graphical user interface product for the Nucleus operating system. The Multimedia Feature Pack implements the new OpenMAX industry standard API, which has wide industry support on a range of silicon platforms and operating systems.

Microsoft featured a subset of new technologies that will be included in the next release of the Windows Embedded CE product (6.0 R2) as well as showcased Windows Embedded Partners in the booth including PHYTEC, Adeno, ICOP Technology, Avnet, and Cogent Computer Systems. In addition, Microsoft Windows Embedded General Manager, Kevin Dallas, delivered a keynote address at the conference outlining Microsoft’s Windows Embedded vision for powering smart, connected, service-oriented devices.

LynuxWorks featured announcements that continue stress the company theme of open standards as key to the selection of LynxOS by Raytheon Integrated Defense Systems for the Ship Self-Defense System (SSDS) across a number of U.S. Navy ships and a working relationship with TTTech Computertechnik AG in offering a combination of products including LynxOS and TTTech’s TTP (Time Triggered Protocol) for flight safety-critical avionics systems.

Green Hills Software made several announcements at the show, including: velOSity support for Renesas SH726x and Super H RISC microcontrollers, INTEGRITY PC support for Intel’s vPro processor technology, enhancements to the company’s Platform for Secure Wireless Devices, and a yet-to-be-named RTOS that is ThreadX compatible. As usual, the Green Hills booth continued to draw substantial crowds throughout the event.

Quadros Systems continues to build on the RTXC foundation with the announcement and availability of their graphical productivity design tool, VisualRTXC, for embedded applications based on the RTXC Quadros RTOS.

QNX Software Systems participated in the disruption zone and affirmed their recent announcement regarding the company’s decision to publish the Neutrino Source Code as part of an open development process. They also announced at the conference that source code for its symmetric multiprocessing (SMP) capabilities was also made available as part of the QNX Neutrino source code repository.

RadiSys featured two demonstrations in the Intel booth as Intel Innovation contest finalists with their integrated Intel Core Duo solutions and RadiSys COM Express (Procelerant CE945GN) and mini-ITX (Endura TP945GM) products in a Robotics and Medical applications. Both demonstrations featured RadiSys’s OS-9 RTOS and Linux running in separate partitions on top of VirtuaLogix’s VLX platform. In addition the company featured their Eclipse-based Microware OS-9 Multi-Core Development kit.

Express Logic announced the availability of its first host-based development tool TraceX with immediate support for use on Windows-based hosts and all target architectures supported by TreadX. The company also announced ThreadX and NetX support for Luminary Micro’s new Stellaris LM3S1000 and LM3S8000 series ARM Cortex M3-based microcontrollers with support for ARM/Keil’s RealView IDE from ARM as well as ThreadX support for Renesas SH-2A microcontrollers.

AdaCore featured several announcements at the conference, including: the GNAT stack, a static analysis tool for safety-critical applications; the GNAT Pro High-Integrity Edition for Servers; and the deployment of a mission-critical system for the U.S. Air Force T25 Simulator for the Electronic Combat Training (SECT) system using the GNAT Pro development environment.

Aonix announced a joint seminar series on “Trends in Critical Systems” that will run from October 16 through December 6 at various locations within the U.S. and include presentations from Wind River Systems, Objective Interface Systems, and Verocel in addition to Aonix. The company also announced PERC support for Freescale’s i.MX31 processor and MontaVista Mobilinux and ObjectAda RAVEN support for Wind River Systems VxWorks 653 environment for PowerPC.

Electing to take a “business-as-usual” approach ahead of the anticipated acquisition by IBM later this year, Telelogic continued to strongly promote its products at the show. The company highlighted its flexible Architecture Design and Integration Framework within the Rhapsody product line that allows for the integration of multiple design and application lifecycle packages including DOORS, Simulink, Statemate, SDL Suite, and other custom tools.

After releasing Enterprise Architect 7.0 in August of this year, Sparx Systems announced a number of enhancements with Build 817 of EA 7.0 that includes improvements in model load time, in the auditing SQL construction, and in the behavior of their reverse engineering option.

ARM featured recent announcements including the ARM Cortex-M1 Development Kit for the Altera Cyclone III FPGAs and the company’s investment in Embest Info & Tech as ARM’s first joint venture in China.

IAR Systems announced added support within IAR Embedded Workbench for Luminary Micro’s Stellaris microcontroller family based on the ARM Cortex-M3. The company also released an evaluation environment kit for the STM32 family of 32-bit MCUs.

Test automation technologies certainly continued to be a hot topic at the show. Static code analysis supplier GrammaTech announced the release of CodeSonar Enterprise. In addition to improved accuracy, faster execution, and support for additional embedded compilers, the new product allows distributed development teams to track and manage defects through a Web-based interface.

Also within the static analysis domain, a technical session hosted by Coverity drew substantial attention from engineers and industry participants alike. Meanwhile, Parasoft announced extended support for its C/C++ solution including the new static analysis capability in Parasoft C++test that offers developers the capability to identify runtime errors with running the application. LDRA and The MathWorks (formerly PolySpace) were also visible promoting the value of their popular test suites.

On the ESL front, both Virtutech and Carbon Design Systems were in attendance in an effort to reach out to the software engineering community. VDC has continued to see players in the virtual system prototyping space more directly target software and systems engineering teams in an effort to get to the key beneficiaries of their technologies.

In addition to showing off the newest version of LabVIEW just released last month (see above), National Instruments released a new RF vector signal generator product and celebrated the 10th anniversary of the PXI Alliance, of which NI is a sponsor member.

Advanced graphics/simulation hardware suppler and maker of iData HMI software, Quantum 3D, announced two new PCI Cards within the Sentiris 4110 series for advanced video capture and display. In speaking with VDC, the company also described some of the interesting partitioned HMI designs they had worked on based on collaboration with SYSGO AG’s partitioned Pike OS product.

AMD made a number of new announcements at the event, including the release of three Athlon 64 processors for low power embedded systems and the release of a triple-core product for the desktop market. The company also revealed a partnership with Freescale semiconductor to license its graphics technology, citing growing demand in the wireless market.

Datalight featured recent announcements regarding the company’s approved patent for their file system technology, Datalight Reliance, as well as the improved performance on Windows CE 6.0 when Datalight Reliance and FlashFX Pro are implemented together.

On the embedded database front, the Embedded Business Group (EBG) of Hitachi America was also in attendance, promoting new enhancements to their Entier Embedded RDBMS database solution. The release of Entier 2.2 includes improvements around multitasking, database content updating, and complex word searching.

McObject featured recent announcements for eXtremeDB support for the Open Database Connectivity (ODBC) application programming interface (API) and tested compatibility with MontaVista Software’s Linux Carrier Grade Edition 4.0.

Professional services provider Embedded Systems Design was showcasing some of their custom-built advanced embedded computing systems. As examples of their core competence in the embedded space, the company has assembled embedded systems based on Xilinx FPGAs for advanced networking and communication.

Within the collocated SD Best Practices show floor were a number of lifecycle management focused companies, including AccuRev, Change Vision, IBM, Telelogic, Seapine Software, and many others. VDC stopped by the TechExcel booth to check out the latest versions of their various ALM-oriented solutions that have been adopted by many leading embedded systems companies.

The “Disruption Zone” was again a featured part of the show. Software and hardware companies showcased included: Amphenol TCS, Handshake Solutions, Lattix, National Instruments, Nilar, and QNX Software.

Other vendors in attendance at ESC included American Arium, Atmel, Black Duck Software, CMX Systems, CodeSourcery, Intel, KLOCwork, Lantronix, MKS, NXP, Perforce, Lauterbach, Texas Instruments, Trolltech, IBM, Seapine Software, STMicro and many others.

ABOUT VDC

The Embedded Systems Industry Bulletin is published as part of VDC’s Embedded Software Strategic Market Intelligence Program. VDC has been providing embedded systems market intelligence for over 20 years. Published by Venture Development Corporation, Copyright 2007, all rights reserved.


Editors:

Steve Balacco
Matt Volckmann
Chris Rommel

Venture Development Corporation
One Apple Hill Drive
Natick, MA 01760-9904
T: 508.653.9000
F: 508.653.9836
E: info@vdc-corp.com
W: www.vdc-corp.com

VDC Launches a New Proposal - “The Embedded Software Developer: Project Requirements, Preferences, and Trends

Venture Development Corporation (VDC) has recently released a new proposal titled “The Embedded Software Developer: Project Requirements, Preferences, and Trends.” These statistics-driven data books are based on detailed Web survey responses from almost 800 embedded developers worldwide. This survey provides insight into specific embedded developer communities’ that will offer readers the most detail understanding about the dynamics of the embedded market available in any syndicated market intelligence program available.

We expect our research will address questions you might have, including:

• Where can I get a more detailed understanding of the differences between development teams based on their current development project target OS type (i.e. commercial, open source, in-house developed, no formal)? How can I target development teams to capture new business opportunities?
• Should I expand to new geographical regions or vertical markets? What are the software requirements, team size, and related spending plans by region? By vertical market?
• What do development teams that use specific types of software development tools (i.e., IDEs, software modeling, requirements management, source/change management, etc.) look like? What type of business relationship might I look to establish within the greater ecosystem?
• What types of architectures/processors are being used in current development projects? How well do my products and strategies line up with current and future project processor types? Where should I look to expand my support?

In an effort to offer greater flexibility and choice, VDC has packaged these reports in a way that leverages our extensive knowledge of the embedded developer community. The data books are defined, organized and packaged by specific developer communities of interest and market segments. Attached please find the proposal which details packaging, content and pricing.

Please feel free to contact either Matt Volckmann (508.653.9000 x143) or Stephen Balacco (508.653.9000 x124) to address any questions or interests you might have regarding the “The Embedded Software Developer: Project Requirements, Preferences, and Trends” proposal.

VDC’s Electronic Systems Level Tools Report Repackaged to Offer Flexibility and Choice

Venture Development Corporation (VDC) published a ground-breaking market research report in June 2007 on the Electronic System Level (ESL) Tools market. This research offers comprehensive coverage of the total ESL market and is available for purchase at $6,950.

In an effort to offer greater flexibility and choice for our clients, VDC has repackaged the report into individual segments (priced between $1,500 and $2,000) that can be separately ordered to better address specific interests and budget constraints. Attached please find a breakdown on the specifics of the individual segment repackaging and pricing.

Our primary research included input and analysis with leading market participants across the ESL, EDA, and embedded software markets in developing scope, definitions, segmentation, and study infrastructure.

VDC’s ESL market segment reports will address many of the questions you might have surrounding the ESL opportunity that include but are not limited to:

• How is the ESL market defined? Segmented?
• Who are the participants in the market?
• What does the competitive landscape look like?
• What types of technologies and system engineering methodologies are being used currently and expected to be adopted in the future?
• How might my company develop competitive strategies, differentiate solutions, and engineer products that better address the current and future requirements?
• What are the emerging markets and new opportunities for ESL tools?

Please feel free to contact either Matt Volckmann (508.653.9000 x143) or Stephen Balacco (508.653.9000 x124) to address any questions or interests you might have regarding this report and how individual modules might better address your unique requirements.

QNX Publishes Neutrino Source Code and Opens Development Process

What Happened?

QNX Software Systems today announced that it is opening access to the source code of its QNX Neutrino real-time operating system (OS) under a new hybrid software licensing arrangement. Effective immediately, QNX will make source code for its award-winning, microkernel-based OS available for download.

In addition to access to Neutrino source code, developers will be able to improve, modify, or extend that code for their own purposes or for the QNX community at large. Developers can then choose to offer back those changes to QNX Software Systems and the QNX development community or keep their modifications private and proprietary.

The first source release includes the code to the QNX Neutrino microkernel, the base C library, and a variety of board support packages (BSPs) for popular embedded and computing hardware.

VDC’s View – “The Dynamics of Open Source at Play”

Over the past several years, traditional embedded software suppliers have looked to assess the impact of the open-source movement on the embedded software market. The fears and criticisms leveled by the competition in years past have now turned into opportunities to embrace Linux and open source in various ways.

In some cases this has resulted in increasing adoption of Linux by traditional embedded software suppliers as a dual product strategy to enable the development of devices using multiple types of operating systems and support customers in a more flexible way that best fit their unique requirements.

In other cases suppliers have learned from and adapted to the perceived benefits of open source in business models, availability of source code and creating a sense of community through user conferences, online chat sessions, etc.

Clearly, companies like LynuxWorks, Wind River Systems, Enea, Microsoft, and now QNX as well as others look to remain flexible in their approach to business models, product offerings, and community development.

From VDC’s perspective, as suppliers continue to adapt and embrace the underlying key benefits of the open-source model, we expect increasing innovation around hybrid business models that look to blend the best of both worlds – open and commercial – through different approaches. This is exactly what QNX Software is looking to capitalize on with their announcement as they look to open source, yet set itself apart from a total open-source model. The dynamics of such innovation is a means to drive technical cooperation through a community at large and at the same time increase name recognition and pull through for their commercially licensed product solutions - which is good for their customers and also good for QNX software!

Green Hills Software Claims Legal Victory in µ-velOSity Arbritration Case

What Happened?

Green Hills Software announced that a ruling has been made in their favor in the arbitration case with Express Logic. According to their press release, Express Logic's claims seeking copyright protection of the ThreadX API and an injunction preventing continued sales of the µ-velOSity operating system have been denied by the arbitration panel.

VDC's View

While the reseller agreement between both parties remains in effect, the business relationship from VDC's perspective is on life-support. GHS will continue to offer and support ThreadX as well as their µ-velOSity OS to their customers and prospects. In the mean time, there is speculation about what comes next from Express Logic as they assess options on how to proceed. As Yogi Berra once said, "It ain't over till it's over."

See EETimes article on this related subject.

VDC Welcomes New Analyst to Embedded Software Practice

VDC is proud to announce that Christopher (“Chris”) Rommel has joined VDC as a Research Associate within the Embedded Software Practice.

At VDC, Chris will be responsible for conducting market research on multiple projects within VDC’s Strategic Market Intelligence Embedded Software Program where he will be working closely with Practice Director Stephen Balacco and Senior Analyst Matt Volckmann. “Chris brings an educational background in methods of analysis, forecasting, and market strategy that fits our profile perfectly,” said Stephen Balacco, Director, Embedded Software Practice at VDC.

"Since 2000, Steve's team has been providing our clients with exceptionally accurate and detailed market intelligence. Every year, our clients demand more of both – and timely coverage of topical issues that are often very difficult to forecast," stated Chris Rezendes, Executive Vice President. "Adding Chris Rommel will enable Steve Balacco, Matt Volckmann, and the rest of our embedded team to meet those growing requirements with speed, accuracy, and ever-more valuable market intelligence and advice."

Prior to joining VDC, Chris attended Brown University where he graduated in May 2007 with a B.A in Business Economics and a B.A. in Public and Private Sector Organization.

Chris is actively involved in working on the Software Development Tools report within VDC’s 2007 Embedded Software Service Year. VDC welcomes Chris aboard and he looks forward to meeting and talking with you.

To contact Chris at VDC:
Telephone: 508.653.9000 x: 123
E-mail: crommel@vdc-corp.com

IBM Rational to Acquire Telelogic

What Happened?

IBM has entered into a definitive agreement to acquire Telelogic at an offer price of 21 Swedish Kronor per share or approximately US $745 million, subject to regulatory reviews and other customary closing conditions. Telelogic AB is a public company headquartered in Malmo, Sweden. Upon completion of the acquisition (expected to close Q3 2007), Telelogic will be a business line within the IBM Rational Software unit.

Acquisition Analysis

Last year, Telelogic acquired embedded software modeling tool rival I-Logix and has since worked to integrate the company's Rhapsody product into Telelogic's existing suite of Application Lifecycle Management (ALM) products, including the popular DOORS requirements management solution. Post acquisition, the competitive landscape featured a growing Telelogic looking to challenge IBM in this segment as both a leading UML tool provider for embedded software development and in offering an integrated suite of ALM tools that could be competitive with IBM’s larger product offering.

Within the software modeling tools market, IBM’s acquisition of Telelogic will surely change the competitive landscape. The combined company will become the clear market leader in UML tools within the embedded space and VDC believes that there will be few challengers able to match IBM Rational/Telelogic in terms of revenue, breadth of product offering, global reach, and consulting services.

Perhaps more importantly, in addition to securing leadership in the embedded software modeling tools market, the acquisition also strengthens the positioning of the company's larger ALM offering across both the embedded and enterprise markets. IBM Rational/Telelogic will now have a broad set of complementary market solutions to offer to their diverse customer base and will likely look to leverage solutions and services from both companies across specific target markets that play to each solution's strength. The acquisition will provide greater opportunity to deliver integrated products to shared customers, especially within the military/aerospace, automotive/transportation, and telecom/datacom industries.

VDC’s View

While VDC sees remaining competition here, the acquisition will certainly result in a dominating position for IBM in the embedded software modeling tools market and in ALM. These reasons alone make the deal interesting, but VDC wonders what IBM's larger view of this move means to their business, and how this acquisition fits within their larger product and services strategy.

Prior to this acquisition (and based to some degree on vendors looking to capitalize on IBM’s shift away from the Rose product line toward System Designer), there was a prevalent market perception that IBM’s focus on and dominance within the embedded market had deteriorated. However, the acquisition signals a change in IBM’s tactics within the embedded device market. It will be interesting to see how IBM continues to support various Telelogic and IBM Rational products in cases where the technology is overlapping. In their announcement, the company was quick to point out that they do not intend to repeat some of the same mistakes that they made with the Rational product line, and this seems to show a renewed commitment to directly addressing the requirements of the embedded market.

The move also hints that the company may see larger opportunities for future growth. Driven by the development of complex systems, success or failure is increasingly dependent on software, as well as a more integrated approach to overall system specification, design, and test across various engineering disciplines. For this reason the acquisition raises a number of questions including:

• What impact will this have on IBM's strategy and vendor partner relationships across other segments of the embedded systems market? In the enterprise systems space? How will IBM look to bring the technologies within these two markets even closer together?

• With a leadership position in embedded ALM, what might be IBM’s next move on the embedded systems front? Is the company considering additional acquisitions of complementary technologies within the dynamic system design tools, EDA/ESL tools, and/or PLM tools markets?

VDC's guess is as good as anyone’s, but IBM’s pervasiveness across so many other aspects of system engineering (development tools, chips, professional services, etc.) and the fact that ALM impacts so many other areas of embedded systems engineering should make vendors across all spaces take note.

The Electronic System Level (ESL) Tools Market: Virtual System Prototyping/Simulation Tools Predicted to Grow Fastest

Recently published research by Venture Development Corporation found that virtual system prototyping/simulation tools were the fastest growing segment of the ESL tools market.
With the complexity of both hardware and software growing significantly, the challenge of designing and testing software earlier in the design process is becoming an increasingly significant factor, especially in cases where the hardware environment may be extremely complex and/or not yet available. In addition to the continued use of physical prototyping, VDC expects an increased use of virtual prototyping methods as a strategy for developing software more efficiently and validating software/hardware interaction earlier in the design process.

VDC defines virtual system prototyping/simulation tools as ESL tools that enable the creation, assembly, and simulation of hardware/system designs modeled at a high level of abstraction and offer simulation speeds fast enough to enable efficient software development. “In our view, these tools differ from instruction set simulators in the degree of speed, cycle accuracy, and system simulation coverage that they can provide,” says Matt Volckmann, Senior Analyst with VDC’s Embedded Software Practice. “Within the ESL market, these tools stand out as the segment most directly addressing issues related to complex hardware/software interaction, while also addressing the issue of the larger ‘system’ outside of an IC or SoC.”

In addition to allowing for earlier software development and fast execution of complex hardware architectures, virtual system prototyping/simulation tools also offer a number of other potential benefits to their users. According to Volckmann, “Virtual system prototyping/simulation tools offer portability and replicability benefits, that enable distributed teams to have access to identical versions of common virtual prototypes. These tools also promise greater visibility into complex systems, allowing developers to use advanced debugging methods and more comprehensively observe system function without the need for sophisticated probing techniques applied to physical hardware.”

While VDC predicts market growth over the next several years, this market is also not without its limitations. VDC believes that the time and resources required to build usable virtual prototypes of hardware as well as remaining questions about which engineering teams (either internally, within the supply chain, or a combination of both) should take ownership of designing and managing virtual hardware models remain key questions within the market.

For access to the full article, click here.

VDC Releases White Paper on ESL Market

VDC recently released a whitepaper on the ESL tools market. Click here to view the report.

VDC Releases ESL Tools Report

VDC has just released its first report on the topic of Electronic System Level (ESL) tools.

Information about the report is available here.

VDC Attends 2007 ESC in San Jose

VDC recently attended the 2007 Embedded Systems Conference in San Jose. This bulletin presents a summary of the event.

Venture Development Corporation Releases New Metrics Estimating the Total Size of the Embedded Software Development Market

Venture Development Corporation (VDC) recently released its report on the Total Market for Embedded Software Development (TMESD). While previously published reports have sized the opportunity for commercial embedded operating systems, tools, and other software; this new report also includes other costs associated with embedded software design and test and offers subscribers new data on the total size of the embedded development market.

VDC believes this information will allow vendors to gain additional insight into the total market opportunity, and the relationship among the costs associated with embedded software development. “In addition to understanding spending on commercial software and other products, spending on development labor is also an important piece of the picture,” says Stephen Balacco, Director of VDC’s Embedded Software Practice. “This development can be viewed as the size of the additional revenue opportunity for software vendors.

By offering tools that increase developer efficiency, improve time-to-market, and decrease labor related costs solution suppliers can potentially capture the value of the engineering effort that the software they provide replaces.” As labor is a significant portion of the TMESD, VDC sees differences in global labor rates and outsourcing as a key to understanding how TMESD will change over time. According to Balacco, “The value associated with software development is also significantly affected by the trend toward low-cost, off-shore development. Assuming that the employment of lower cost engineering labor is able to save overall project labor costs, the
increased use of outsourced development to lower-wage regions will serve to inhibit the growth of TMESD.”

VDC believes that embedded software vendors can gain a better understanding of their marketpotential by looking at development spend in at a broader level. In addition to sizing total expenditures on embedded software development, the TMESD report also investigates other key trends in key embedded software industries and estimates the size of the TMESD by region and vertical market.

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Linux Adoption in the Embedded Market Presents Challenges to Commercial Suppliers

Recently published research by Venture Development Corporation (VDC) indicates increasing adoption of Linux in embedded system development projects. However, suppliers of branded commercial embedded Linux solutions will continue to be challenged in differentiating their Linux solutions from what is publicly available and demonstrating real value in order to maintain a premium for their products and support.

According to Stephen Balacco, Director of VDC’s Embedded Software Practice, “While some OEMs have chosen to use a commercial Linux solution, more are using and/or expect to use a publicly available Linux solution in future project development. It is this trend that will continue to put pressure on commercial Linux suppliers to provide value above and beyond the growing sophistication of publicly available Linux solutions.”

Linux developers can make use of a wide range of publicly existing device drivers, design systems using the latest communication protocols, supplement existing platforms with technology leveraged from the enterprise Linux domain, and enjoy royalty-free production licensing. As internal development teams gain more Linux experience, the threat from OEMs migrating to a “roll-your-own” (RYO) open-source solution is expected to increase faster than adoption of commercial Linux solutions, especially among larger OEMs who can afford to fund the up-front engineering and maintenance and support of an internal Linux solution. Similarly, smaller OEMs with limited budgets look to open-source Linux as a more sophisticated RYO solution with support from the open source community.

From VDC’s perspective, commercial Linux suppliers will need to continue to focus on product development and integration challenges by moving up the value chain from just supplying a Linux OS distribution to offering increased efficiency to the development process by providing high-quality development tools, middleware, Linux platforms and application level solutions, and other resources that support Linux-based engineering. According to Balacco, “In this way, OEMs can focus on their core competencies, the competition, and profitability in bringing new products to market faster, within development budgets.”

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Wind River Acquires FSMLabs Technology

On February 20th Wind River announced that it would be acquiring the Intellectual Property of FSM Labs.

VDC views the acquisition as very complementary to Wind River System’s (WRS) strategy in offering their customers choice and flexibility in the way they look to work and the commercial solutions they look to acquire and integrate. For applications with real-time requirements, WRS will be able to offer their customers, once available, a choice in real-time solutions, either VxWorks- or RTLinux-based through a common Eclipse-based development environment, Workbench.

VDC expects that the move will create new market opportunities for WRS with device manufacturers that have real-time and Linux requirements with the company’s Linux Edition Platforms for Consumer Devices and Network Equipment, as well as within, aerospace and defense, industrial control, and automotive applications.

FSMLabs has continued to have success in supplying its customers with its patented real-time micro-kernel solution that runs Linux and BSD applications. For FSMLabs, sales of RTLinux solutions represent a significant portion of revenue in military/aerospace, simulation, robotics, telecom infrastructure, and other application segments. While the majority of its revenues have been in the Americas region, the company has seen additional growth in the Asia Pacific market.

Driven by the interest of embedded developers to use Linux in embedded systems, the question of whether and how Linux can be adapted to satisfy the requirements of real-time application demands continues to gain increased attention. Approaches include:

Use of Linux in Real-Time Applications – Because the Linux kernel lacks proven mechanisms for effectively and quickly preempting lower-priority threads and ensuring that high-priority processes are completed within a defined time period, the Linux operating system has not been readily adopted within hard real-time environments and systems that require guaranteed performance within strict time constraints. However, this has not stopped developers from looking for ways to use the Linux operating system as part of their real-time applications. A number of commercial vendors, standards bodies, and developers continue to investigate ways to improve Linux technology for use in real-time applications.

Using dual operating system architecture – Embedded systems may be configured to run multiple operating systems (one running Linux, the other a hard real-time OS) on different processors or within a partitioned environment on a single processor. Linux may be run using a “virtualization” approach or setup so that a real-time micro-kernel manages both real-time processes and a Linux environment. FSMLabs RTLinuxPro, VirtualLogix VLX, and the open source RTAI project, are example variants of the dual operating system approach.
The various strategies each have their benefits and drawbacks, and their use is highly dependent upon how “real time” an application’s requirements really are. Ultimately, the continued availability of cheaper, more powerful processors may allow Linux to continue to penetrate segments of the market where the lack of real-time capability was previously perceived as a barrier.

Real-time means predictable application or system control and can include a range from no real time to soft and hard real-time. Many embedded applications have some degree of real-time performance in order to meet requirements. While real-time requirements vary from application to application, VDC expects that real-time Linux solutions will offer additional market opportunities as the adoption of Linux increasingly spans vertical markets.

Telelogic Releases Free UML Tool

On January 2nd, Telelogic made an announcement of the availability of a free modeling environment based on the Object Management Group´s (OMG) UML 2.1 standard.

Telelogic’s release of the free Modeler product is a bold move, and VDC expects the announcement to have a significant impact on the UML tools market going forward. The new product will allow Telelogic the opportunity to promote the value of UML to non-users in new market segments as well as to better address developers currently employing UML for more basic functions and those considering a more gradual, low risk adoption of a model-based development approach. VDC believes that the release is an appropriate market response considering the current competitive dynamics in the embedded UML space.

While a segment of embedded projects require the use of sophisticated UML environments, in VDC’s view, many developers are still using UML tools for basic modeling and drawing capabilities. There is substantial demand for lower priced UML tools, and VDC believes a significant portion of development teams using UML tools have purchased lower cost solutions such as Microsoft Visio, Sparx Systems Enterprise Architect, Gentleware Poseidon, and others to model their applications. Many vendors of low cost UML tools have rapidly improved their solutions, and VDC expects these vendors to continue to offer more advanced capabilities over time.

Another significant factor is that the majority of embedded developers are not using any UML tools to develop their applications. The opportunity to design applications using Telelogic Modeler at no cost to the user should serve to promote the use of UML, ultimately helping more companies to realize the benefits of using a model-based development approach. By creating greater awareness and adoption of UML in new markets, the release has the potential to benefit not only Telelogic, but all vendors within the UML market.

Telelogic Modeler will certainly be attractive to a segment of the embedded UML market that currently demands less from its UML tools, and to those that have considered experimenting with the use of UML, but are not willing to take significant risk in doing so. The availability of a no-cost, low-risk tool from a leading vendor like Telelogic should have a positive impact on UML adoption. Telelogic Modeler will also give Telelogic the opportunity to build valuable relationships with new accounts that will be important as these companies’ UML tools requirements mature and they look to migrate to more advanced tools.