Embedded Software & Tools PracticeChris Rommel, Senior Analyst

VDC Research Webcast

Requirements Convergence:

Embedded & Enterprise

Lifecycle Management

Frequently Asked Questions

These slides are from a webcast presented on 9/29/2010.

A full audio recording is available at:

http://vdcresearch.com/market_research/embedded_software/freeresearch.aspx#Webcast

1 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

VDC Research

Complimentary insights and marketing data on

Embedded Software & Tools market available at:

www.vdcresearch.com

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other practice news please opt-in at:

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2 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Today’s Speaker

Chris Rommel, Senior Analyst

At VDC, Chris is responsible for market analyses and data collection on multiple projects and topics

within VDC’s Embedded Software Market Intelligence Program including developer trends and requirements, market sizes, and key technical requirements. Chris’s experience also includes competitive analyses, strategic marketing collateral development, and vertical market opportunity

assessments. Chris has authored numerous market research studies on Linux, multi-core components and tools, embedded/real-time and mobile application operating systems, software

development tools, software and system modeling tools, and test automation tools. Chris is a graduate of Brown University (BA, Business Economics; Public and Private Sector Organizations).

3 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Agenda

About VDC & Our Research

Market Definition & Segmentation

Embedded Market Context

State of Embedded Engineering

Project Roles Blurring

Embedded Market Fueling Enterprise Change

Software & System Lifecycle Management Tools

Research in the Works

Question & Answer

4 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

VDC Research, Embedded Software & Tools Practice

• VDC Research was founded in 1971.

Continuous, profitable operation since.

Staff of about 30 located in Boston, Chicago, Los Angeles.

Focus on a number of different technology areas including: Embedded Software & Tools, Embedded

Hardware & Systems, Mobile & Wireless, Industrial Automation, AutoID &Transaction Automation,

Power Management, a number of niche IT markets.

• Over 14 years covering the Embedded Software & Tools Market.

• Driven by extensive and constant primary research.

Supply-side – Operating system, software development tools, and multi -core components and

tools suppliers telephone interviews annually

Demand-side – OEMs and integrators web surveys and telephone interviews annually

• Syndicated & Custom engagements with clients in the Embedded Software & Tools Market.

• Practice Team Members

Steve Balacco, Director

Chris Rommel, Senior Analyst

Jared Weiner, Analyst

• Practice Blog – On Target: Embedded Systems

http://blog.vdcresearch.com/embedded_sw/

5 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Technologies

Industry

Segments

Geographic Regions

Software & System Modeling Tools

Automated Test & Verification Tools

Requirements Management Tools

Source /Change /Configuration

Management Tools

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Scope of VDC’s software and system lifecycle management tools research

Market Definition & Segmentation

6 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Embedded Market Context

• > 10 Billion processors ship annually

98% Embedded

• Created multi-billion dollar market for embedded software and tools

• Total Market for Embedded Software Engineering is already ~$40 billion

• By 2015, >10 Billion connected embedded

devices

Proliferation of embedded computing presenting opportunity to solution vendors

7 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Spend on

Commercial EmbeddedSoftware Solutions

Spend on

Embedded Software Engineering Labor

Development

Tools

Embedded Market ContextDevices in transition

Circa 1995 Today

Hardware Platform

– 8/16 Bit

– Perhaps 32 Bit

– Single processor

– 8/16 Bit Still Used

– 32/64 Bit Advanced Devices

– Multi-processor

o Multi-core emerging

Communications Capability – Limited – Networked/Smart

Software Platform

– Operating System

– Tools

– Some Middleware

– Operating System

– IDEs

– Extensive Middleware

– Second OS

– Multimedia

Lines of Code – Thousands – Millions

8 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

The State of Embedded Engineering

Number of Lines of Software Code(Mean of Respondents)

2010

Commercial/ 3rd Party 205,008

Open Source/3rd Party 870,192

In-house Developed 196,267

Sources of In-house Developed Code(Mean of Respondents)

2010 2009

Hand coded for current project 65.3% 65.8%

Auto generated 5.9% 7.8%

Leveraged from other/previous in-house

projects 28.9% 26.5%

Code bases growing and diversifying

• The average embedded project now has

over one million lines of software code

More and more of this growth is being

generated from 3rd party code

Year-over-year decrease in % in-house

code that is auto generated

• Anticipated software growth out pacing growth in human engineering resources

• Gradual shift away from standalone products as a critical step to addressing increasingly complex project requirements

Percent Increase (or Decrease) in the Total Lines

of Software Code for the Next Project(Average of Respondents)

Value

Mean 33.5%

Weighted (by number of lines of code) Annualized

(by project length) Mean 23.6%

Median 17.5%

9 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

The State of Embedded Engineering

• Software development now generates over 50% of development costs

• The vast majority of these costs, however, remain aligned with OEM labor spend

• Today <40% of FTEs on embedded projects are software engineers

• With a number of OEMs having reduced their internal development resources, this labor spend represents a substantial opportunity to market participants

Percentage of Total Development Cost

Related to Software Development for Current Project (Mean of Respondents)

Year Value

2010 50.7%

2008 49.6%

2002 33.5%

Software now accounts for majority of development costs

10 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Project Roles Blurring

4.7%

5.7%

6.1%

21.8%

23.9%

26.3%

32.2%

35.2%

42.4%

42.8%

46.0%

52.1%

54.2%

0% 20% 40% 60%

Other

IC/SoC design/verification

Mechanical engineering

Board level engineering/test

Operating system development/test

Prototype development

System integration /test/verification

Algorithm engineering

Project management/planning

Firmware development/test

Requirements management /specification

System architecture engineering

Software application/middleware

development/test

Project Tasks in Which Respondents are Personally Involved on

Primary Current Project(Percent of Respondents)

0.8%

1.8%

4.0%

4.7%

5.5%

5.5%

6.0%

9.2%

12.4%

14.7%

15.5%

19.9%

0% 10% 20% 30%

Mechanical engineering

IC/Soc design/verification

Prototype development

Board level engineering/test

Algorithm engineering

Operating system development/test

System integration/test/verification

Requirements

management/specification

System architect engineering

Project management/planning

Firmware development/test

Software application/middleware

development/test

Percent of Time Spent on Various Engineering Tasks

(Mean of Respondents)

Note: Percentages sum to over 100% due to multiple responses.

Engineers forced to develop skill sets beyond primary discipline

11 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Embedded Market Fueling Enterprise Change

• Resource and expertise shortage

• Proliferation of embedded devices

• Higher level of device software functionality

• Ubiquitous connectivity

• Demand for RT analytics fueling dynamic user experiences

• More demand being placed on back-end enterprise systems

• Increasing push on enterprise software developers to conduct embedded software engineering

• Decreasing time-to-market windows

• Escalating need for automation and engineering synergies

Device evolution amplifying engineering gaps

12 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Software & System Lifecycle Management Tools

1.8%

5.7%

8.2%

8.8%

9.8%

10.1%

11.6%

12.6%

15.2%

19.8%

50.3%

54.6%

76.8%

77.3%

84.8%

0% 20% 40% 60% 80%

Don't know or not yet decided

None of the above

Dynamic GUI/HMI design tools

Software/system modeling tools (Proprietary-language-based)

Model-based software testing tools

Dynamic software testing tools

Software/system modeling tools (Standard-language-based)

Instruction set simulators

Virtual platforms or virtual prototyping/simulation tools

Static analysis tools

Build tools

JTAG debuggers/In-circuit emulators

Editors

Debuggers

Compilers

3.9%

15.3%

2.9%

3.1%

6.2%

6.8%

10.1%

13.2%

13.5%

13.8%

17.4%

42.6%

45.2%

57.4%

0% 20% 40% 60%

Don't know or not yet decided

None of the above

Portfolio management tools

Security management tools

Build analysis tools

Software IP/licensing/ compliance/component management tools

Peer code review tools

Software test management tools

Collaboration/document sharing tools

Build/production/release management tools

Requirements management tools

Project management/planning tools

Bug/issue tracking tools

Source/change/ configuration management tools

Growing use of SSLM tools driving ecosystem evolution

Note: Percentages sum to over 100% due to multiple responses.

Tool Usage for Current Projects(Percent of Respondents)

13 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Research in the Works

• Software & System Lifecycle Management (SSLM) Tools

Multi-volume proposal

Cover both the Embedded and greater Enterprise IT market segments

Topics to include:

• Software and System Modeling Tools

• Automated Test and Verification Tools

• Requirements Management Tools

• Source /Change /Configuration management (SCCM) Tools

• Engineering Design Methodologies, Processes, and Standards

• To receive the practice monthly bulletin and receive other practice news

please opt-in at: www.vdcresearch.com/signup/

14 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

New product offering available shortly

Q&A Session

15 – 2010 VDC Research Group, Inc.

Embedded Sof tware & Tools Practice

Thank You for Attending this VDC Webinar

For more information about VDC Research coverage of the global markets

for the embedded software and software and systems lifecycle management

tools markets – please contact:

Chris RommelSenior Analyst, Embedded Software & Tools Practice

crommel@vdcresearch.com | 508.653.9000 x123

Steve BalaccoDirector, Embedded Software & Tools Practicesbalacco@vdcresearch.com| 508.653.9000 x124

Cyril BernardSenior Account Executivecbernard@vdcresearch.com | 508.653.9000 x142