Thursday, March 22, 2007

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.

Click here for the full article.