VDC: Top 10 trends in embedded systems;
both software and hardware in 2011
Market researcher VDC Research Group has highlighted below
the key market and technology trends in embedded hardware
and systems market in year 2011. These trends are suggested
for Embedded electronics vendors to increase their business
revenue and profit, its kind of business tutorial.
The top 10 trends reported by VDC are:
1. COMs Gain Traction as Time-to-Market Accelerators for
OEMs : By combining COM express modules with off-the-shelf
COMs, suppliers are able to offer several different configurations
of CPU boards and leverage COMs’ interchangeable characteristics.
CPU vendors can thus offer a fairly wide range of boards
without incurring high design and inventory carrying costs.
2. PC/104 Module Family Under Pressure: Although VDC data
projects the PC/104 family will experience a single-digit
rebound from the low points of the recent recession, vendors
will have to commit resources to developing newer strategies
in order for this technology to remain viable. Otherwise,
the recovery of these architectures is likely to stall or
decline in 2011.
3. Asia Continues to Rise in the Development of Embedded
Technology: 2011 will see further strengthening of the Asian
embedded supplier community as supply chain synergies, R&D
capabilities and fabrication automation increases between
upstream and downstream ecosystem partners.
4. China’s Growth Will Power microcontroller MCU Market:
Continued economic growth in China will drive the country’s
automotive market and expand the need for MCU technology.
Despite reduction in government subsidies, VDC expects the
Chinese automotive market to expand substantially through
2015, driving adoption of MCU solutions.
In fact its not just MCU the whole range of semiconductor
device market will be powered by emerging economies like
China and India.
5. Suppliers Will Invest in Services Value Chain: While
embedded hardware margins show signs of stability in 2011,
it’s clear to VDC that leading embedded suppliers also
recognize the value their clients place on a range of services
capabilities. As a result, many leading suppliers will try
to differentiate by investing in critical aspects of the
services value chain, from consulting capabilities to enhanced
warranty and end-of-life policies.
6. FPGA and GPU Will Expand into a Number of Market Segments:
The medical, industrial automation and military segments
provide an attractive opportunity for FPGA devices. From
imaging equipment to diagnostic devices, there is a need
for adaptable health care, factory control and military
C4 solutions. The programmability, flexibility and reduced
non-recurring engineering (NRE) costs associated with FPGAs
will lend themselves to broader adoption in these markets.
7. Tier 2/Tier 3 OEMs and ISVs Will Become More Important:
Investment in solutions requiring embedded platforms continues
to rebound, however the market will still be driven by small-
to mid-sized projects. This is related to the slow return
of larger, blanket purchase orders let by Tier 1 accounts
and to the user community preferences for projects with
smaller footprints that fit within narrower application
definitions and require short, sharply defined systems integration
support. These projects are tailor-made for local, expert
ISVs and ISIs, as well as Tier 2/Tier 3 OEMs.
8. The Market Explores HaaS (Hardware as a Service) Bundles:
Broad market expansion and deep application penetration
of remote monitoring and control capabilities will advance
across a number of market segments, foretelling a broader
migration to managed services solution development and deployment
models in supervisory monitoring and control applications.
These embedded application clouds will require local points
of presence (POPs) or on-site infrastructure and hardware
rolled into service level agreements (SLAs) supporting the
software and service delivery portions of contracts.
9. Cross-Platform Processor Suppliers Learn to Play Nice:
From broader, bigger, more aggressive, public licensing
agreements to M&A, the market will force suppliers of
CPU, FPGA and GP GPU technologies to collaborate more in
2011. VDC Research’s surveys of hundreds of OEMS across
a number of embedded markets reveal significant growth in
OEM plans to develop solutions on hybrid platforms incorporating
two or more of these technologies.
10. Competition Will Intensify and Growth Will Accelerate:
Even if the market does not return to pre-recession levels,
growth will accelerate during 2011. VDC sees virtually every
vertical market growing more than 5%, and most technology
categories achieving the same 5% CAGR. However, profitability
results may not be so positive. Demand for stable technologies,
brutal price concessions and expanded services requirements
will provide opportunities for differentiation and revenues,
but not necessarily margin.
