Over $25 Billion: VDC Research Releases New Metric Measuring the Total Size of the Embedded Software Engineering Market

VDC Research recently released a series of Embedded Systems Market Statistics reports providing a detailed, vertical-by-vertical analysis of key embedded industries. Within these reports, VDC provides estimates for the Total Market for Embedded Software Engineering (TMESE), which VDC believes represents more than $25 billion worldwide.

While spending on commercial software and tools for embedded software engineering represents a large portion of the TMESE, spending on engineering labor continues to represent a substantial piece of this market opportunity. VDC views this larger market size to be most representative of the total revenue opportunity for software vendors. Vendors who provide solutions able to increase developer efficiency, improve time-to-market, and reduce labor costs can potentially capture a greater portion of the value of the engineering effort that the software they provide replaces.

The TMESE “Iceberg”

The TMESE calculation stems from recent upgrades to VDC’s Embedded Systems Market Statistics Model. This model also provides key metrics regarding the global engineering population and embedded projects, with an emphasis on vertically-, regionally-, and task-specific analysis.

“Leaders within the embedded industry are looking for more segment-specific intelligence to inform their assessments of current market opportunities and better align their offerings with customer requirements,” says Matt Volckmann, Senior Analyst and Program Manager, VDC’s Embedded Software and Tools practice. “VDC’s latest Embedded Systems Market Statistics model provides our customers with a more detailed view into the embedded software market as well as improved access to data specific to certain segments of interest across geographies, industries, and engineer types. The model also puts VDC clients in a better position to address key questions about the larger systems engineering industry.”

VDC reviews these and other critical statistics by vertical within the recently released Track 3 Embedded Systems Market Statistics reports, Volumes 1 through 7, from VDC’s 2008 Embedded Software Market Intelligence Service.

Virtualization for Embedded Systems - Market Update

For enterprise IT applications, virtualization has emerged as a key strategy to control costs by consolidating servers, therefore reducing the related hardware, floor space, power consumption, and cooling. Over the last several years, the number of virtualization solutions specifically targeted at embedded applications has increased dramatically.

What?

VDC considers “virtualization for embedded systems” to be a condition whereby executable software technologies running on a target embedded system/device that enable other guest operating systems or software to execute while either fully or partially separated from direct exchanges with the underlying processor(s) or hardware.

The executable software technology can include:

• Hypervisor or virtual machine monitor (VMM) – Software running directly on the hardware that primarily functions as a host for one or more guest operating systems.
  
• Microkernel or real-time operating system – Software that can serve as a host for one or more guest operating systems but also serves as an operating system itself typically providing key features required by or desirable to the function of the target system (e.g., real-time performance, secure partitioning, and small footprint).

“Virtualization for embedded systems” should not be confused with another similar class of tools that allows embedded engineers to simulate the function of a range of processors and/or hardware systems (often under development and unavailable to a developer). VDC refers to these solutions as virtual system prototyping/simulation tools. Within the embedded tools market these solutions are also commonly referred to as:

• Virtual system prototyping;
• Virtual system simulation;
• Virtual platforms; and/or
• Virtualized software development.

Why?

The value proposition of virtualization in the Enterprise/IT space is well understood; however, the value proposition for embedded solutions extends beyond those driving growth within the IT market. Some of these drivers include:

• Migration and adoption of new hardware architectures, such as multi-core processors, as a result of processor obsolescence, semiconductor advances, etc.
  
• Ability to consolidate and make better use of hardware and application software
  
• Need to leverage/re-use legacy software code, especially in instances where significant investment has been spent on development, testing and/or certification by one or more regulatory bodies
  
• Continued importance of safety- and security-critical requirements
  Ability to enable a desired “user experience” while still ensuring determinism and/or security
  
• Desire to isolate GPL-licensed or other open source code from proprietary code

Who?

Some of the vendors currently offering or developing virtualization solutions for embedded systems include:

• Green Hills Software
• LynuxWorks
• Open Kernel Labs
• Real Time Systems GmbH
• SYSGO AG
• TenAsys
• VirtualLogix
• VMware (recently acquired TRANGO Virtual Processors)
• Wind River Systems

So What?

The diversity of embedded project requirements, software, and hardware, has created an opportunity for solutions that can ease the integration of applications, operating systems, and hardware platforms while also providing a vehicle to preserve legacy investments. We expect that an increasing number of embedded engineering teams will look toward virtualization as a development solution for their projects going forward.

Based on VDC’s 2008 Embedded Systems Engineering survey less than 5% of developers reported the use of virtualization in their current development project. Virtualization can certainly be employed to solve a variety of problems, but its value as a solution (and thus its adoption) will be measured against the potential for added cost, latency, resource consumption, and system complexity that comes with it.

Although developers’ expectations suggest that adoption is increasing, this growth is expected to remain moderate with use remaining below 10% for their next project. The intriguing questions going forward will be how this technology will be positioned and how it affects the greater embedded software and tool vendor competitive landscape.

• What more can suppliers of virtualization technology do to help engineers understand what this technology offers and how this technology can be employed to solve real problems?
  
• What will happen to the commercial viability of standalone virtualization vendors as larger companies with broader solution sets develop their own offerings?
  
• Will the presence of a virtualization solution within a company’s product suite affect a development team’s choice of an OS (regardless of current need for virtualization)?
  
• Will the evolution of advanced multiprocessing operating systems cannibalize any of the need or commercial market for virtualization solutions?
  
• Finally, how will the current economy affect the adoption of new technologies like virtualization or multi-core processors?

VDC examines virtualization in greater depth in the recently published Industry Brief 1: Virtualization for Embedded Systems. The brief also includes profiles of the competing vendors as well as an examination of current and future project use of virtualization for embedded systems development.

We are interested in your thoughts. Please feel free to post comments.

Mentor Graphics to Acquire ESL Products from Agility, Agility to Close

Yesterday, Mentor Graphics announced that it would be acquiring the
high level synthesis technologies of Agility (previously from Celoxica). The acquisiton, along with its existing Catapult C solutions, further strengthens Mentor's current leadership position within the ESL sysnthesis space. Mentor plans to also acquire key employees related to the product line.

Earlier in the week, Agility had indicated in an EE Times article that it would shortly be confirming the sale and that, as the company was unable to renegotiate its line of credit or find new financing, it would soon be ceasing its operations. Its MATLAB to C translation products (previously from Catalytic) will be sold at auction on January 28th.

Now Available: Embedded Systems Market Statistics

Embedded Software 2008 Market Intelligence Service
Track 3: Embedded Systems Market Statistics

VDC Research Group is pleased to announce the release of seven reports on embedded systems market statistics, as part its 2008 Embedded Software Market Intelligence Service. The statistics are based on detailed Web survey responses from hundreds of embedded developers and VDC’s proprietary embedded systems market statistics model. This model is a tool for estimating and forecasting the global population of embedded engineers, the global number of project starts, and the Total Market for Embedded Software Engineering (TMESE). Each volume focuses on one of the following key vertical markets:

Volume 1: Automotive/Transportation
Volume 2: Consumer Electronics
Volume 3: Industrial Automation
Volume 4: Medical Devices
Volume 5: Military/Aerospace
Volume 6: Mobile Phones
Volume 7: Telecom/Datacom

Research Highlights

Through a combination of modeled estimates and end-user data analysis, each Embedded Systems Market Statistics volume includes but is not limited to the following information:

• Demographics (Geographic region, primary role, type of product developed, and application type)
• Key Industry Trends (General market and system engineering trends)
• Project Statistics (Number of project starts worldwide, average per company, project length, time-to-market, cost of development, percent of cost attributed to software development)
• Labor Statistics (Number of embedded systems engineers working for embedded systems manufacturers, distribution by engineer type, average number of engineers working on current development projects, average age and years developing embedded systems, annual salary)
• Solution Statistics (Total spend on commercial embedded software solutions and percentage by product type, average umber of units shipped by company for 2007 and distribution by operating system type, average number of lines of code developed in-house, number of commercial/third-party lines of code, type of operating system used in current project, type of processor used in current design, use of key programming languages, as well as annual tools budget for software/system engineers)
• Total Market for Embedded Software Engineering (Total spend on commercial products and embedded systems manufacturers labor)

Report Scope

These reports provide key embedded system engineering statistics for seven key vertical markets. These reports rely on information from VDC’s proprietary embedded systems market statistics model. This model is based on information gathered through VDC’s primary and secondary research and includes detailed analysis of our 2008 Embedded Systems Engineering survey.

To access the full PDF version of this brochure as well as other information on these reports, click here

Code Base Growth, Safety-Critical Requirements Driving Static Analysis Market

Recently published research by VDC Research indicates that embedded software engineers using a static analysis tool are working on projects with significantly larger average numbers of in-house developed lines of software code than developers not using a static analysis tool. VDC considers static code analysis tools to include solutions ranging from Lint-based syntax parsers to standards’ compliance checkers to tools using more formal methods for verification.

With the overall embedded code base growing a rate near 10%, VDC expects that an increasing number of development teams may look toward static analysis tools as a means to ensure code quality and functionality.

“With this continued growth in code bases, the potential number of executable paths within the code is also increasing dramatically, often limiting the traditional dynamic testing tools’ ability to achieve acceptable code coverage, both with regards to the sheer number of tests needed to be executed as well as the amount of time needed to run them,” says Chris Rommel, Analyst with VDC’s Embedded Software Practice. "The ability of static analysis tools to allow individual engineers to test code without executing it, earlier in the development cycle, should present vendors with additional opportunities for growth, especially in economic times when excessive backend QA effort can easily eliminate any remaining,potential profit margins."

The difference between the average code bases of these user groups can also serve to benchmark the typical code base sizes needed for a project team/company to be considered a legitimate candidate for a commercial static analysis tool. However, application classes tending to have requirements that are more safety- or security-critical in nature embrace static analysis tools at higher rate, before code base size and complexity alone would normally drive development teams to consider additional testing methodologies.

For example, surveyed static analysis tool users currently working on a project for the military/aerospace industry (which also accounted for the highest percentage of the total embedded software static analysis tools spend in 2007) reported a median of 22,500 lines of in-house developed code as compared to 45,000 by the overall static analysis tool user population.

Although VDC believes that an increasing number of development teams will look toward static analysis tools as a software development best practice, the escalating importance of software quality will generate a growing demand for comprehensive testing solutions that can also provide tight integration with dynamic testing tools as well as with other complementary application lifecycle management tools.

VDC explores these and other critical issues within this market in the recently released report, Static Analysis Tools, Volume 4 from Track 2 of VDC’s 2008 Embedded Software Market Intelligence Service.

To Access the PDF version of this press release, click here

VDC Research Webinar Event

VDC recently announced the launch of our Embedded Software Market Intelligence Program: 2009 Service Year. As part of that announcement, we mentioned our upcoming Webinar presentation that provides an update on the market, including an analysis and outlook for 2009.

We hope you can join us for one of the two planned sessions. You can see more details and register at:

VDC Webinar Events - What’s Next: Embedded Software Market Update, Trends and 2009 Outlook December 2nd, 11:00 AM (U.S. Eastern) December 5th, 2:00 PM (U.S. Eastern). Following the presentation, we’ll also have a Q&A session so we can respond to your specific areas of interest.

Our speakers include Stephen Balacco, Director of our Embedded Software and Tools Practice, and Chris Rezendes, EVP Research Operations, and the following questions will be discussed:

• How is the current global economic downturn impacting near-term prospects for suppliers of embedded software platforms, development tools, and services?
• What are the dynamics of the global market for embedded software/system engineering labor? How is this market evolving?
• How is the growing focus/reliance on software in embedded systems impacting the need for software/system lifecycle management tools and practices?
• What is the impact of open source solutions/communities on the embedded systems market?

We look forward to seeing you at one of these sessions.

BSQUARE acquires TestQuest

What Happened?

Yesterday, BSQUARE announced the acquisition of automated test tool vendor TestQuest. BSQUARE noted that the acquisition was in line with a strategy of growing its product business to support existing customers. The acquistion will also provide added exposure to BSQUARE across various geographic regions (especially within the Asia Pacific region), access to new customers outside of the embedded system market, and strengthen their offerings for companies using multiple types of operating systems including Symbian, Linux, and others in addition to Windows Mobile.

BSQUARE reported that they had purchased the company for $2.2 million in cash and that TestQuest had generated approximately $4.8 million over a 12 month period ending September 30th 2008.

VDC’s View

While BSQUARE is likely to continue to focus significant efforts around its core Windows licensing and engineering services businesses within the embedded market, this acquisition is part of a larger effort to broaden its portfolio of complementary software product offferings. The company has released a number of new products over the last year or so, including products for UI development for flash, a 3G wireless development kit, and the Device Validation TestSuite, a QA testing tool for Windows CE on the TI OMAP3 Evaluation Module.

The acquisition should help BSQUARE to build on its capabilities around QA and test for mobile, especially devices using non-Windows-based operating systems prevalent within the mobile phone market such as Linux and Symbian. For a company with a solid footing in the Windows universe, additional products catering to the needs of other operating system platforms is a good strategy as well.

The move also speaks to the growing importance of test and verification within the mobile phone market given the continued growth in software content per phone (recent VDC findings suggest that the code base within the mobile phone market may be growing at a rate of approximately 14% per year) and compressed development cycles.

VMware Acquisition Targets Virtualization for Mobile Devices

What Happened?

Last week, VMware publicly revealed that it had acquired France-based embedded virtualization vendor Trango Virtual Processors in October. The acquisition of Trango’s solutions, which support virtualization on ARM and MIPS-based architectures, is intended to help broaden VMware’s target market beyond x86 platforms and specifically into the mobile phone space.

In positioning the Trango’s virtualization technology within the mobile phone space, VMware is emphasizing:

• The benefits to manufacturers of faster time-to-market and easier porting of more robust operating systems
• The ability of end users to manage multiple device profiles and more seamlessly make use of PC-based applications.

VMware plans to release the new VMware Mobile Virtualization Platform (MVP) based on this technology sometime in 2009 (late 2009 by some reports).

VDC’s View

This development is big news for virtualization solution providers playing in the embedded systems space. Vendors have long been looking to ride the coattails of VMware’s success story, attempting to draw strong parallels that would signal the inevitable arrival of virtualization within the embedded systems domain as well.

However, despite the fact that some of the value propositions of virtualization within the desktop and server computing market hold true for the embedded domain, there are also key differences that make an apples-to-apples comparison challenging. One of the most glaring of these is the diversity of hardware architectures that continue to be used across embedded projects -- embedded engineering is far from a homogeneous x86 world.

Despite the growing interest in virtualization technology over the last few years, VDC’s research points to the fact that the current use of virtualization across the larger embedded space remains low. That said, VDC has also seen higher reported rates of virtualization use specific to the mobile phone segment of the embedded market. VDC anticipates that future growth of virtualization within embedded system projects is most likely to be strongest in industries where hardware architectures are either similar to PC and server environments and/or becoming more uniform and platform specific. The standardization of system platforms in industries like the mobile phone market, point to growing opportunities for virtualization going forward.

Key embedded solution competitors bracing for strong adoption of virtualization within the mobile phone market such as VirtualLogix, Open Kernel Labs, Green Hills Software, and others, likely see VMware’s move as more validation that virtualization is destined to reach the mobile and embedded markets in earnest over the coming years. However, with a large, established vendor like VMware (and parent EMC) now looking to grow its business in the mobile phone space, it also may be a cause for concern for some vendors that had previously hoped to be the VMware of embedded - but now will have to compete more directly with the virtualization giant itself.

Embedded Systems Bulletin - October 2008

VDC attended the 2008 Embedded Systems Conference in Boston on October 28 and 29. This bulletin presents a summary of the event.

Embedded Systems Conference (ESC) – Boston 2008

In these times of economic uncertainty, the fifteenth installment of the East Coast’s Embedded System Conference exceeded our expectations. Although some prominent embedded vendors did not participate in the show and many exhibitors seemed to have scaled down booth size and staff, show floor attendance did not drop off as much we might have expected. In fact, attendance on Tuesday in particular seemed fairly comparable to last year in Boston. Discussions with exhibiting vendors also suggested that the number of quality leads generated by attendees seemed promising as well as consistent year-over-year.

THE “EMBEDDIES” GO TO:

Best of Show

GrammaTech’s CodeSonar 3.3 – Static analysis tool vendor GrammaTech announced that CodeSonar 3.3 is up to five times faster than previous versions. The company also announced that it has improved the reporting and charting abilities in addition to adding a richer API in order to enhance the user’s ability to customize tests and reports. We expect that these announcements should help GrammaTech, whose solutions have traditionally been used in the development of safety- or mission-critical applications, strengthen its value proposition to those markets outside of its traditional domain.

Honorable Mentions

BSQUARE’s 3G Dev Kit – BSQUARE launched a 3G wireless development kit for Texas Instrument’s OMAP35x to aid the integration and development of hardware and software, which should allow teams to focus more of their time and efforts above the cell core on the application level. BSQUARE also announced a Flash UI Extender that facilitates the use of Flash to build user interfaces for Windows CE 5 or Windows Mobile 6.

Green Hills Software’s Platform for Secure Wireless Devices – GHS has enhanced its Platform for Secure Wireless Devices with the latest 802.11A/B/G wireless drivers from Atheros Communications as wells as new Devicescape security supplicants. The company anticipates that these improvements – as well as the growing importance of security for mobile devices – will help fuel future design wins for the mobile phone space. GHS also announced that Saab is using INTEGRITY, MULTI and the Green Hills Probe for the development of its Skeldar Unmanned Aerial Vehicle (UAV).

Open Kernel Labs’ OKL4 3.0/Nano – Virtualization solution vendor Open Kernel Labs (OK Labs) announced version 3.0 of its OKL4 embedded hypervisor. With their solution primarily targeted at the mobile phone industry, the company has also released a configuration of OKL4 3.0, dubbed OKL4 Nano that is streamlined for use on low-end phones that lack the memory or processing power to run a full version of OKL4. Not only does this solution allow them to target the more rapidly expanding low-end mobile market, but it is also configured to ensure that applications developed to run on Nano will be completely compatible with the full version.

Best Giveaway

Microsoft Windows Embedded Computer – At the conference’s industry address, presented by Kevin Dallas, Microsoft provided the first 300 attendees with a VIA Artigo Pico-ITX kit (due to the lecture’s high turn out, Microsoft announced that they would ship additional systems if needed), loaded with 1 GB RAM, 120 GB Hard Drive, Visual Studio Pro 2005, as well as configured dual boot either Windows Embedded CE 6.0 R2 or a 1200day evaluation copy of Windows Embedded Standard. With these systems retailing for approximately $1,400, Microsoft continues to demonstrate its unrelenting drive to bolster its embedded presence.


Software Vendors Target Mobile Devices for Next-Generation Solutions


Mobile devices continue to generate a growing portion of consumers’ interaction with technology. The number of development solutions targeted at these sophisticated mobile devices has increased in conjunction with the versatility and level of functionality within these previously resource-constrained and dedicated devices. We expect that this class of devices – from low-end phones to PC-like smartphones –will increasingly drive the future of the embedded market, both from the level of functionality expected by consumers as well as the sheer volumes of device shipments.

WALKING THE FLOOR

AdaCore featured several announcements at the show, including the availability of GNAT Pro for SYSGO’s ElinOS embedded Linux operating system, support for Mentor Graphics’ NucleusOS, as wells as a strategic partnership with Praxis, the developer of the Ada-based SPARK language and related toolset.

Aonix announced a new release of its PERC Ultra virtual machine and toolset for the development of Java-based, symmetric multiprocessing systems. In addition, the company also announced that the PERC Ultra SMP tool will support Concurrent’s RedHawk Linux and NightStar debugging and analysis tools.

Software production management tool vendor Electric Cloud also attended the Conference and announced version 3.0 of its ElectricCommander tool. The highlighted improvements featured an Eclipse integration intended to aid agile development and promote best practices that could speed development.

Real-time Operating System (RTOS) vendor Express Logic announced that the availability of its ThreadX RTOS on a simulated Renasas SH-4A platform created with Virtutech’s Simics. We expect this integration, as well as the use of other virtual system prototyping/simulation solutions, should help engineering teams begin application development sooner, potentially speeding time-to-market.

IAR Systems also attended the conference and launched a version of its IAR Embedded Workbench IDE for Atmel’s AVR32 Version 3.10.

Klocwork announced that C# source code analysis capabilities have now been added to its Klocwork Insight static analysis tool.

After having launched TBvision at ESC West, LDRA released TBsecure, a plug-in for that checks compliance with the Carnegie Mellon Software Engineering Institute CERT C secure coding standard. In addition, the company also announced that its TBrun unit test tool will now be available as a stand-alone product.

Mentor Graphics announced the availability of a customizable reference platform for the design of multimedia applications called the Nucleus Platform Media Player. The solution includes the Nucleus operating system, a user interface engine, and a suite of development tools.

MicroChip announced the next generation of their MPLAB In-Circuit Debugger (ICD). The company states the MPLAB ICD3 can operate 15 times faster than its predecessor and will better enable rapid program development for its entire 8/16/32-bit microcontroller portfolio.

At the Conference’s keynote, Kevin Dallas, General Manager of Windows Embedded, discussed Microsoft’s plans to build “Quebec,” the next generation of Windows Embedded Standard (XP), on Windows 7.0 and include further enhancements for connected, service-oriented devices.

Microsoft also announced the SPARKs Will Fly contest. Based on the SPARK Your Imagination program announced at the Embedded Systems Conference in San Jose in April (which provides versions of Windows Embedded CE and Visual Studio with select hardware to hobbyists and academia at lower price points), this contest is aimed at promoting innovative device ideas for the “home of the future.”

The .NET Micro team at Microsoft presented some significant enhancements to their product including Wi-Fi integration, Universal Serial Bus support, Web Services for Devices as well as support for Analog Devices Blackfin processor family. The .NET Micro team also showcased a competition of their own, the Dare to Dream Different Challenge, which pits developers to design new devices using the .NET Micro Framework.

Also in attendance was Real-Time Innovations (RTI) who launched a safety-critical version of its Data Distribution Service. The Safety-Critical Edition supports both OMG’s DDS standard as well as the Real-Time Publish-Subscribe Protocol (RTPS), but with a library size of approximately 130KB.

Zeligsoft announced a new generation of its software communication architecture (SCA) model tool, Zeligsoft CX. In addition to its out-of-the-box specifications, CX is designed to enable further development of domain specific languages to fit new industry standards or project-specific requirements.

Other leading embedded systems vendors in attendance at ESC included American Arium, Altera, American Arium, Black Duck Software, Birdstep Technology, CMX Systems, Coverity, Datalight, Telelogic an IBM company, IntervalZero (Ardence, a Citrix company), Keil (ARM), Lauterbach, McObject, National Instruments, Parasoft, Perforce Software, Protecode, Quadros Systems, Segger Microcontroller, Texas Instruments, The MathWorks, and many others. The SD Best Practices show held on the 3rd Floor of the convention center included Accurev, IBM, the Object Management Group, Progress Software, Urbancode, and several other exhibitors as well.

Software Content and Interconnectivity Driving Demand for Software & System Modeling Tools

Recently published research by VDC Research Group indicates that the automotive industry will represent the largest vertical market, as a percentage of total market revenue, for software and system modeling tools by 2010. VDC defines the software and system modeling tool market to include both standard (UML, SysML, SDL, etc.) and proprietary (MATLAB, SCADE, LabVIEW, etc.) language-based modeling solutions intended to facilitate the process of developing embedded software and systems.


“The growing interconnectivity of sophisticated control and safety systems within automobiles has helped drive the need for and adoption of industry standards such as AUTOSAR and MISRA C,” says Chris Rommel, Analyst with VDC’s Embedded Software Practice. "The increasing adoption of these standards, combined with the automotive industry's already exploding level of software content, has fueled the continued revenue growth in this segment as well as that of the overall market for software and system modeling tools."

Moreover, VDC expects that embedded developers – not just limited to the automotive industry – will increasingly look for comprehensive software and system development solutions that can help them manage their adherence to each industry’s standards and best practices. VDC believes that those vendors whose solutions can address these and other challenges within multiple phases of the development process, either through direct functionality or tight integration with third-party solutions, will obtain significant opportunities for growth going forward.

VDC explores these and other critical issues within this market in the recently released report, Software and System Modeling Tools, Volume 3 from Track 2 of VDC’s 2008 Embedded Software Market Intelligence Service.

To Access the PDF version of this press release, click here

Planning to Fail?

Current Project Management and System Architecture Specification Activities Causing Delays in Software Engineering and System Integration

A recently released study from VDC Research reveals that failures in system architecture design and specification may, in many cases, be the underlying causes of failures in software engineering and system integration.

VDC’s survey of embedded engineers (based on a mix of various project types including hardware, software, and system designs) suggests that system integration, along with firmware and application development/test, are typically key areas of delay among late projects. Meanwhile, project management/planning and system architecture design and specification are most commonly cited as significant contributors to project delay.
A closer investigation of this data reveals that among those projects experiencing delays in firmware design, 48% reported system architecture design and specification as a cause of project delay, and among those projects experiencing delays in application/middleware engineering, 47% reported system architecture design and specification as a cause of project delay. With software engineers, hardware engineers, and system architects on average reporting that they spend approximately a quarter to a third of their time on firmware engineering tasks, these findings suggest that failures in system architecture design and specification could be having significant impact on time-to-market.

VDC believes that the growing sophistication of software requirements is likely to play an increasingly greater role in driving the advancement of the system-level engineering management and architectural decision-making practices. “The realization that efficient design and test of advanced hardware and systems can no longer be accomplished without common approaches and greater development visibility across the system engineering process is impacting the vendor community,” says Matt Volckmann, Program Manager with VDC Research’s Embedded Software Practice. “VDC expects market participants to place increasing focus and effort on enabling effective software development/test throughout the system engineering process as a result of the expanding importance of software across all types of
embedded system engineering disciplines.”

VDC explores these and other critical issues within the embedded systems market within the recently released report, Volume 2: Virtual System Prototyping/Simulation Tools for Software Development and Verification, from Track 2 of VDC’s 2008 Embedded Software Market Intelligence Service. In addition to an analysis of the supplier market opportunity, this report also includes in-depth analysis of findings from VDC’s 2008 Embedded System Engineering Survey providing key statistics on engineering demographics, trends, and project characteristics.

To Access the PDF version of this press release, click here.

Please take note that our formal company name has recently changed from Venture Development Corporation to VDC Research Group, Inc.

We believe that our new company name better reflects the types of products and services offered by VDC. It is also part of many other changes underway at VDC to serve our clients better.

Please make note or forward our new company name to any one in your organization that should be aware. Also, make note of our new corporate website address: www.vdcresearch.com.

Email addresses for VDC employees will continue to work when combined with the new vdcresearch.com domain. Communication to the old email addresses will be redirected until the end of the year.

Green Hills Software Achieves CMMI Maturity Level 3 Rating

What Happened?

In case you missed the announcement, on August 19, Green Hills Software announced that it had been appraised to the Capability Maturity Model Integration (CMMI) Maturity Level 3 rating.

CMMI is the follow on to the Capability Maturity Model or CMM from the Software Engineering Institute (SEI), Carnegie Mellon University.

Readers should also note that Wind River Systems announced in January 2007 that the company had achieved CMMI Level 3 rating for their professional services organization.

VDC’s View

These are the type of announcements that might fly below our radars. It’s not about a software or hardware product announcement, or an acquisition of a company. It’s speaks more to process improvement, in Green Hills case for CMMI-DEV for product and service development processes.

Why should this be important to readers? Well, consider that silicon based devices contain significant amounts of software, and by VDC’s analysis, it’s growing in importance. CMMI is an approach to provide companies with published best practices to process improvement.

Before joining VDC’s Embedded Software Practice as the Director, I worked for many years for a large defense contractor involved in C3I programs. I had the opportunity to be involved in a number of defense related programs as a prime, subcontractor, and as a member of industry. In some of these programs software design, development, and integration caused cost overruns, late deliverables, and quality issues.

As a result, government acquisition offices began to mandate CMM/CMMI as a requirement for prime contractors to participate in the opportunity. CMMI is certainly no guaranty on the success or failure of a contractor but another way to be able to measure and evaluate as part of an integrated acquisition decision to award. So, the timing could be right for companies like Wind River Systems and Green Hills Software that have a significant presence and investment in large, complex military/aerospace systems.

While there is no indication that prime contractors have passed down the requirement of CMMI to subcontractors in order to partner, it could make sense that this might happen in the future. Having a CMMI rating can be viewed as a discriminator for selection by defense prime contractors for product design in and professional services. If we believe that software is everywhere then it begs the bigger question of how long will it be before other industries such as automotive, industrial control and others look to their software partners to have a CMMI approved rating?

Embedded Engineers Expect Software Code Base to Continue to Grow at Nearly 10% per Year

Recently released data from Venture Development Corporation’s (VDC) Embedded/Real-time and Mobile Application Operating Systems study leads to the conclusion that the overall embedded software code base may be growing at a rate of approximately 9% per year.

Comparatively larger code size is not always an indicator of more complex system functionality, as smaller code bases often result from superior coding techniques and more efficient use of system resources. However, this data supports the idea that system complexity is driving the need for greater amounts of software content per project.

Because of their correlation with relatively larger overall code bases, VDC expects projects using commercial and open source operating systems to represent the bulk of total embedded software code base growth going forward. Furthermore, VDC’s findings suggest that engineers working on projects using commercial, open source, and in-house operating systems, as well as those using no formal operating system (running on their target system), all expect, on average, to employ significantly greater amounts of software code on their next embedded design. While data from VDC’s 2008 Embedded System Engineering Survey suggests slightly slower average rates of expected growth in the lines of code per project than in previous years, the average embedded system engineer anticipates an increase of over 20% in the total lines of software code on their next project.

“The average embedded system/device continues to require greater amounts of software to serve the requirements of both suppliers and end users. Among many other functions, today’s embedded systems demand more sophisticated system interfaces, incorporating increasingly complex graphical elements as well as advanced wired and wireless communication capabilities,” says Matt Volckmann, Program Manager with VDC’s Embedded Software Practice. “As a result of a greater overall focus on software as means to enable increased functionality, a large number of embedded systems manufacturers are currently dedicating more of their resources to software engineering tasks.”
Project teams developing, testing, and managing larger, more complex code bases may obtain their software from a number of third party and in-house sources, including:

• Code leveraged from previous designs
• Commercial software solutions
• Using open source solutions
• Code developed in-house using more efficient tools or larger engineering teams
• Code generation technologies

Commercial vendors report that customers evaluating embedded operating systems typically are seeking to satisfy a growing list of specific product requirements – and that vendors without adequate offerings in these areas are often not considered as part of a more thorough evaluation. Solutions supporting more complex system user interfaces and communication stacks such as USB connectivity, TCP/IP, and wireless communication protocols are currently in high demand within a majority of projects. Most vendors have therefore either built these solutions in-house to complement their offerings or satisfied these through partnerships in order to fill gaps within their offerings. These market factors are quickly turning operating system vendors into software stack platform providers.

VDC explores these and other critical issues within the recently released report, Volume 3: Embedded/Real-time and Mobile Application Operating Systems, from Track 1 of VDC’s 2008 Embedded Software Market Intelligence Service. This report includes in-depth analysis of findings from VDC’s 2008 Embedded System Engineering Survey segmented by operating system type.

To Access the PDF version of this press release, click here.

AVAILABLE NOW - VDC RELEASES EMBEDDED ENGINEERING SURVEY DATA FOR 2008

With the increasing complexity of embedded software and hardware designs, the 2008 end-user data books will provide insight into the behavior, opinions, and demographics of embedded engineers, the degree to which embedded system engineering tasks are converging, and key system engineering trends likely to impact embedded systems manufacturers and solution providers over the short and long term.

This end-user data is based on detailed Web survey responses collected in the February to April 2008 timeframe from almost eight hundred embedded systems engineers worldwide that will offer an understanding about the dynamics of the embedded market as they relate to current and future product development trends. This detailed end-user data provides access to VDC’s extensive knowledge of the embedded developer community and is intended to provide insight into specific embedded developer communities’ current development and future project trends based on the individual report topics.

VDC’s Embedded Software 2008 Market Intelligence Service includes Track 1: Operating Systems Used in Embedded Systems and Track 2: Software/System Modeling and Test Tools.
Both tracks include a volume and multiple modules of end-user data for the individual reports within the tracks that includes data for over 130 exhibits for:

· Linux Used in Embedded Systems
· Windows Used in Embedded Systems
· Embedded/Real-time and Mobile Application Operating Systems
· Multi-Core Components and Tools
· Virtual System Prototyping/Simulation Tools for Software Development & Verification
· Software and Systems Modeling Tools
· Static Analysis Tools

Subscribers to individual reports from either Track 1 or Track 2 receive end-user data specific to any report purchased at no additional cost. However, the end-user data is available for purchase separately for subscribers requiring the data only as well as unique data cuts of specific interest to solution providers.

Who should be interested?

Software (ESW, ESL, and EDA) and hardware (silicon and board) solution providers (whether currently engaged in the embedded market or not) should find this information of interest, as these reports provide valuable insight into the types of current and future requirements and methodologies that companies are using to engineer embedded systems. This information can be used to assist companies in differentiating their solutions, developing competitive strategies, engineering products that better meet current and future customer requirements, and/or supporting key marketing and sales claims.

Systems manufacturers and semiconductor suppliers will also find value in this data in developing an understanding of key system engineering trends that will impact their business in the short and long term, gaining a perspective on the embedded software and hardware market, and an understanding of the vendor options available to them.

For further about VDC’s Embedded Software 2008 Market Intelligence Service contact:

Cyril Bernard, Account Executive, 508.653.9000 ext. 142, cbernard@vdc-corp.com

Join the VDC mailing list to receive future updates at: http://www.vdc-corp.com/OptIn.asp

Cadence Withdraws Bid for Mentor

Today Cadence announced that is has withdrawn its proposal to acquire Mentor Graphics for $1.6 billion, citing a revised outlook given the present economic climate and Mentor's failure to engage in substantive discussions. At the same time, the company announced the authorization of a stock repurchase of $500 million subject to market conditions.

Mentor responded to the announcement, saying that Cadence's claims were inconsitent with Cadence's previous public statments and discussions with Mentor, that it believed Cadence was facing challenges in obtaining financing, and that the FTC's actions indicated that the proposed transaction would be protracted.

Multi-Core and Multiprocessing Support Remain Low Priorities in Selection of Embedded OS

Natick, Massachusetts – August 5, 2008 – Recently published research by Venture Development Corporation (VDC) indicates that many embedded developers still do not yet consider multiprocessing and multi-core architecture support a highly critical factor influencing their selection of embedded operating systems for current projects.

Moreover, these criteria remained of relatively low importance even to those developers who indicated that they were using a multi-core or multi-core and multiprocessor design for their current project.

While their preferences did indicate a discernable increase in the relative importance of support for multi-core architectures, their top-eight section criteria remained consistent with those of the overall population. Although VDC expects this selection dynamic to continue change going forward as more embedded projects incorporate multi-core processors, it is clear that factors such as the reliability, cost, and the availability of development tools will continue to drive purchasing decisions.

“While the percentage of developers incorporating multi-core processors is expected to increase going forward, it remains to be seen how this technology will ultimately affect the overall commercial market for embedded software,” says Chris Rommel, Analyst with VDC’s Embedded Software Practice. “Increased adoption of multi-core processors may not necessarily cause embedded device manufacturers’ software spend to increase more per year than it would have organically. This technology, however, may have the potential to affect the competitive landscape going forward and shift the relative distribution of market revenue if a clear disparity in multi-core or multiprocessing support emerges between the vendors that have traditionally led the embedded market.”

VDC explores these and other critical issues within the market for embedded multi-core software solutions in the recently released report, Multi-Core Components and Tools, Volume 4 from Track 1 of VDC’s 2008 Embedded Software Market Intelligence Service.

Microsoft’s Classic OSs a Major Driver of Revenue for Windows Embedded

Natick, Massachusetts – July 17, 2008 – Recently published research by Venture Development Corporation (VDC) indicates that embedded systems manufacturers and their suppliers are driving Windows Embedded revenue by incorporating Microsoft’s Classic OSs under embedded restricted licenses in device development.

While the scope of the research report covers Microsoft’s Embedded and Mobile segments, VDC estimates that greater than 40% of Windows Embedded revenue in 2007 was derived from Classic OS (Windows Embedded Enterprise) production licenses. The types of applications can range from retail automation, industrial automation, large complex medical devices, and others. VDC’s description of Microsoft’s Classic OSs includes full-up versions of Windows XP, Vista, 9x, DOS, and other operating systems under embedded restricted licenses.

Windows Embedded 2007 Platform Revenue Share
(Percent of Dollars)

“The main factors driving Microsoft’s success in this area is the development of PC-type devices that are not resource constrained, do not require any special hardware or software requirements and where third-party application software already exists” said Stephen Balacco, Director with VDC’s Embedded Software Practice. Real-time support if required can be achieved with real-time extensions from companies such as Ardence (RTX), TenAsys (INtime), and others. “In these cases, with low volume shipments a standard general purpose off-the-shelf operating system becomes an attractive fit both technically and financially for the embedded system manufacturer.”

VDC explores these and other critical issues within the market for Windows software solutions in the recently released report, Windows Embedded and Mobile Operating Systems, Volume 2 from Track 1 of VDC’s 2008 Embedded Software Market Intelligence Service.

ABOUT VDC

Venture Development Corporation (VDC) is a technology market research and strategy consulting firm that advises clients in a number of industrial, embedded, component, retail automation, RFID, AIDC, datacom/telecom, and defense markets. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for, and capitalize on current and emerging market opportunities. We strive to deliver exceptional value to our clients by leveraging the considerable technical, operational, educational and professional experience of our research and consulting staff. During our nearly four decades of ongoing operation, we have had the pleasure of serving most of the world’s leading technology companies, many high-profile start-ups, and numerous blue-chip early and later stage investors. Our products and services consist of research reports, annual research programs, and custom research and consulting services. Founded in 1971, the firm is located in the Boston area. Please visit our Web site at http://www.vdc-corp.com/ to learn more.

For further information about VDC’s Embedded Software Practice and the 2008 Embedded Software Market Intelligence Service, contact:

Stephen Balacco, Director, 508.653.9000 ext. 124, sbalacco@vdc-corp.com
Matt Volckmann, Senior Analyst/Program Manager, 508.653.9000 ext. 143, mattv@vdc-corp.com
Chris Rommel, Analyst, 508.653.9000 ext. 123, crommel@vdc-corp.com


For pricing/purchasing information, contact:

Cyril Bernard, Account Executive, 508.653.9000 ext. 142, cbernard@vdc-corp.com

Join the VDC mailing list to receive future updates at: http://www.vdc-corp.com/OptIn.asp

UPDATE: Nokia to Acquire Symbian Ltd. – Can you hear me now?

What Happened?

On June 24th, Nokia Corporation (NYSE: NOK) announced its intent to acquire the remaining shares of Symbian Limited, a company of which they currently own a 47.9% stake, for an estimated $410 million. In conjunction with the planned acquisition, Nokia, Sony Ericsson, Motorola, and NTT DOCOMO, among others, will be launching the Symbian Foundation, an open and non-profit organization that will develop a royalty-free, Open Source Symbian OS-based software platform. The acquisition is expected to close pending regulatory approval in the 4th Quarter 2008. The Symbian Foundation’s launch is expected in the first half of 2009 with a complete integrated open source mobile software platform anticipated to be available in the first half of 2010.

VDC’s View

VDC wondered throughout yesterday just what was going on in Redmond. The stakes have certainly been raised in the mobile operating system market based on Nokia’s announcement to acquire and then create an open source Symbian Foundation entity.

The open source threat from the LiMO Foundation, the Open Handset Alliance (OHA), and their business models has been dangling over the heads of commercial suppliers of mobile software platforms like Symbian and Microsoft. Real success has not been measured by any volume of phone shipments to date - but they’re coming.

Membership in these foundations (including the expected Symbian Foundation) and alliances have significant overlap as software suppliers, handset manufacturers, carriers, and others hedge their bets against who will become the dominant environment, if there ever becomes one. Now comes Nokia’s - not a member of either LiMO or OHA – announcement of open source, community collaboration, innovation, the creation of an ecosystem of strategic partners, and the call to developers worldwide to come onboard.

The timing is right for Nokia’s move before LiMO and the OHA make an impact and gain momentum in the market. Nokia’s return on investment of some $400 million can quickly be justified in most likely less than two years by not having to pay royalties per unit shipped to Symbian Ltd. The business model for the Symbian Foundation is reflective of LiMO and OHA – royalty free! According to Nokia, Symbian employees will become Nokia employees – but some 1,600 employees?

Nokia’s planned acquisition of Symbian stands to further amplify the pressure on commercial mobile software vendors to compete on price and provide an ecosystem of value-added technology above and beyond mobile operating systems and tools.

How will Microsoft respond? This is not clear, but they most likely have strategies in place to deal with LiMO and the OHA. And now comes the soon expected Symbian Foundation. Microsoft has a number of options – none from VDC’s perspective, which would collectively be called open source, including:

• Releasing the source code for the Windows Mobile kernel (similar to Windows CE) for OEMs and developers to inspect, create derivative works should they choose, and feed back changes, improvements, and innovation to Microsoft for inclusion in future releases.
• Continue to enlist the mind share from strategic partnerships and alliances throughout the ecosystem of mobile players and developers.
• Rather than simply respond by reducing royalty costs – which may ultimately be an option for Microsoft – look to:

• Create a value proposition to carriers around the use of Windows Mobile that data services can drive the ARPU to where the $10 to $14 royalty fee for a Windows Mobile device becomes minimized.
• Continue to emphasize with handset manufacturers the value proposition around reducing development costs and time-to-market through the use of the Windows Mobile platform.

Nokia to Acquire Symbian Ltd.

What Happened?

On June 24th, Nokia Corporation (NYSE: NOK) announced its intent to acquire the remaining shares of Symbian Limited, a company of which they currently own a 47.9% stake, for an estimated $410 million.

In conjunction with the planned acquisition, Nokia, Sony Ericsson, Motorola, and NTT DOCOMO, among others, will be launching the Symbian Foundation, an open and non-profit organization that will develop a royalty-free, Symbian OS-based software development platform. Pending the acquisition’s regulatory approval, the Symbian Foundation’s launch is expected in the first half of 2009 with a complete, integrated open source platform anticipated to be available in the first half of 2010.

VDC’s View

Nokia’s planned acquisition of Symbian stands to further amplify the pressure on commercial mobile software vendors to compete on price and provide an ecosystem of value-added technology above and beyond the traditional domains of mobile operating systems and tools.

Stay tuned as VDC looks to comment further on this news.