Searching for the Total Size of the Embedded Software Engineering Market

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© 2011 VDC Research Webcast Embedded Software & Tools

Embedded Software & Tools Practice

Searching for the Total Size of the Embedded Software Engineering Market?FEBRUARY 2011

WEBCAST

Steve Balacco – Practice Director

Christopher Rommel – Senior Analyst

Jared Weiner – Analyst

You’re not alone – it’s the most sought after statistic and frequently asked question of VDC

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Recording Available

A full audio recording is available for download at:

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For complimentary insights and marketing data:

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

Today’s Speaker

Steve has more than ten years experience conducting market research studies and

managing

all of the market research programs for VDC’s Embedded Software and Tools practice. His

project-related experience is diverse and includes coverage of a number of embedded

software technologies for syndicated research including embedded operating systems,

software development tools, java, databases, and Linux, Windows Embedded, market

statistics, and test automation tools. Steve holds a BSBA from Eastern Nazarene College.

Stephen BalaccoPractice Director, Embedded Software & Tools Practice

http://blog.vdcresearch.com/embedded_hw/




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Proliferation of Embedded Computing Presenting Opportunity to Solution Suppliers

> 10 Billion processors ship annuallyo 98% Embedded

Multi-billion dollar market for embedded software and tools

Amount of software content defining system functionality and end product value continues to increaseo Continuing shift to software as a critical element of the device / system engineering process

o Software development costs are greater than 50% of total development costs

o Engineers performing tasks outside of their primary discipline

o Development projects under pressure – > 40% behind schedule

In 2010, >10 Billion connected embedded devices

So what is the opportunity?o Where do I focus my strategy?

o How big is the total market for embedded software engineering?

o What regions and industries are growing the fastest?

o Are my products aligned with types of investments being made by engineering organizations for commercial software solutions?

o What’s the population for the number of embedded engineers and how are they segmented by industry?



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VDC’s Embedded Systems Market Statistics Model

The Model – o A tool and methodology for estimating and

forecasting key metrics in the embedded systems market.

o Output offers a detailed view of specific data for certain segments of interest across geographies, industries and engineer types.

Key metrics describing the growth and health of the embedded industryo Number and types of embedded

software engineers

o Number of embedded project starts

o Commercial products spend

o R&D labor spend

Why should these metrics be important to you?o Identifies the potential for development seats

o Number of project starts reveals opportunities

o Commercial product spend indicates what type of product investments are being made and inform in formulating product strategies.

o R&D labor spend – the hidden opportunity for commercial software solution providers.

Key Inputs to Model

$B

Commercial ProductsSpend

Number of Engineers

Timeon-Task

R&DSpend



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So How Many Embedded Engineers Are There?

2009 2010 -

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Worldwide Number of Embedded En-gineers

Project Managers

Software Engineers

Hardware Engineers

System Architects

Algorithm Engineers/ Func-tional Experts

QA/Test/Verification/ Val-idation Engineers(N

umbe

r &

Typ

e o

f E

mbe

dded

Eng

inee

rs)

TMESE Embedded Engineer Estimateso 2009 ~ 820k

o 2010 ~ 880k

o YoY growth > 7%

Software & QA / Test Engineers Grew the Fastest

Industry Viewo Automotive, industrial automation,

mil / aero, and telecom / datacom have the largest population of engineers

o Regardless of industry, software engineers represent the largest population

Key Driverso Increasingly complex project

requirements, shrinking time-to-market windows

o Anticipated software growth out pacing growth in human engineering resources

• Average embedded project has > one million lines of software code

>7%



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Total Market for Embedded Software Engineering

2009 2010 -

50,000

Total Market for Embedded Software Engineering

Total Market for Com-mercial Products

Total Market for Software Engineering - Labor

(Mill

ions

of

Dol

lars

)

TMESE Embedded Market Size Estimateso > $40B market in 2009 growing to

nearly $50B in 2010

o Software engineering labor spend represents > 90% for both years

Industry Viewo Automotive, consumer electronics,

and mobile phones growing fastest

o Regardless of industry, labor spend dwarfs spend on commercial products

Key Driverso Continued reacceleration of R&D spending;

organic embedded device market growth

o Demand for higher levels of connectivity capabilities

o Infiltration of consumer feature sets (UIs, etc.) into new device classes

o Growing demand for COTS SW / tools

o Increasing percentage of total development cost attributable to SW

>11%



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Ope

ratin

g

Syst

ems

Modeling Tools3 rd Party

Runtime

Software

Alg

orith

m

Eng

inee

rs

Sys

tem

Eng

inee

rs

IC/SoC Engineers

Board

Engineers

Softw

are Engineers

Spend on Commercial Embedded

Software Solutions

Spend on Embedded Software Engineering Labor

Test

Engineers

Development Tools

Testing Tools

Conclusions

Continued Growth Forecastedo Proliferation of embedded devices / systems

o Improving macroeconomic conditions

Key Growth Driverso Rapid growth of the mobile device market

o Growing complexity and increased software content

o More complex system / hardware components / architectures

o Implementation of more sophisticated engineering methods

o Utilization of more advanced tools, SW

Spending on engineering labor represents a large piece of the opportunity for software suppliers – Hidden Opportunity

If your looking for an embedded market TAM or what VDC calls our TMESE – trends – or opportunities – give us a call



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For complimentary insights and marketing data:


Thank You for Attending this VDC Webcast

Cyril Bernard – Account Director

[email protected] | 508.653.9000 x142

Stephen Balacco – Practice Director


Christopher Rommel– Senior Analyst


Jared Weiner – Analyst


For more information please contact:


mailto:[email protected]







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