During this webcast, Chris Rommel, Senior Analyst for the Embedded Software and Tools practice, discussed key high-level findings from our research into the Software and System Lifecycle Management market. Specifically, he covered: the evolution of enterprise and embedded system development requirements; the transformation of the competitive landscape; engineers’ ratings of available Software and System Lifecycle Management Solutions; adoption of Agile methods in embedded systems design; and the impact of changes in embedded engineering preferences and trends.

1. VDC Research Webcast
Requirements Convergence:
Embedded & Enterprise
Lifecycle Management
Embedded Software & Tools Practice
Chris Rommel, Senior Analyst

2. 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/freeresearc
h.aspx#Webcast
1– 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

3. VDC Research
Complimentary insights and marketing data on
Embedded Software & Tools market available at:
www.vdcresearch.com
To receive the practice monthly bulletin and receive
other practice news please opt-in at:
www.vdcresearch.com/?signup=1
2– 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

4. 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

5. 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

6. 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

7. Market Definition & Segmentation
Scope of VDC’s software and system lifecycle management tools research
Geographic Regions
Semiconductor/Semiconductor IP
Industry
Others
Military/Aerospace
Segments
Automotive/Rail /Transportation
Industrial Automation/Energy/Power
Financial
Mobile phones
Medical Devices
Software & System Modeling Tools
Consumer Electronics
Telecom/Datacom
Automated Test & Verification Tools
Technologies
Requirements Management Tools
Source /Change /Configuration
Management Tools
6– 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

8. Embedded Market Context
Proliferation of embedded computing presenting opportunity to solution vendors
Development • > 10 Billion processors ship annually
Tools  98% Embedded
Spend on • Created multi-billion dollar market for
Commercial Embedded embedded software and tools
Software Solutions
• Total Market for Embedded Software
Engineering is already ~$40 billion
Spend on
Embedded Software • By 2015, >10 Billion connected embedded
Engineering Labor devices
7– 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

9. Embedded Market Context
Devices in transition
Circa 1995 Today
– 8/16 Bit Still Used
– 8/16 Bit
– 32/64 Bit Advanced Devices
Hardware Platform – Perhaps 32 Bit
– Multi-processor
– Single processor
o Multi-core emerging
Communications Capability – Limited – Networked/Smart
– Operating System
– Operating System – IDEs
Software Platform – Tools – Extensive Middleware
– Some Middleware – Second OS
– Multimedia
Lines of Code – Thousands – Millions
8– 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

10. The State of Embedded Engineering
Code bases growing and diversifying
Number of Lines of Software Code • The average embedded project now has
(Mean of Respondents) over one million lines of software code
2010  More and more of this growth is being
Commercial/ 3rd Party 205,008 generated from 3rd party code
Open Source/3rd Party 870,192  Year-over-year decrease in % in-house
code that is auto generated
In-house Developed 196,267
Sources of In-house Developed Code • Anticipated software growth out pacing
(Mean of Respondents)
growth in human engineering resources
2010 2009
Hand coded for current project 65.3% 65.8% • Gradual shift away from standalone
Auto generated 5.9% 7.8% products as a critical step to addressing
increasingly complex project requirements
Leveraged from other/previous in-house
28.9% 26.5%
projects
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

11. The State of Embedded Engineering
Software now accounts for majority of development costs
• Software development now generates over
50% of development costs Percentage of Total Development Cost
Related to Software Development
• The vast majority of these costs, however, for Current Project
remain aligned with OEM labor spend (Mean of Respondents)
• Today <40% of FTEs on embedded
projects are software engineers
Year Value
• With a number of OEMs having reduced
their internal development resources,
this labor spend represents a substantial
opportunity to market participants 2010 50.7%
2008 49.6%
2002 33.5%
10 – 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

12. Project Roles Blurring
Engineers forced to develop skill sets beyond primary discipline
Project Tasks in Which Respondents Percent of Time Spent on
are Personally Involved on Various Engineering Tasks
Primary Current Project (Mean of Respondents)
(Percent of Respondents)
Software application/middleware
development/test
19.9%
Software application/middleware
development/test
54.2%
Firmware development/test 15.5%
System architecture engineering 52.1%
Project management/planning 14.7%
Requirements management /specification 46.0%
Firmware development/test 42.8% System architect engineering 12.4%
Requirements
Project management/planning 42.4% 9.2%
management/specification
Algorithm engineering 35.2% System integration/test/verification 6.0%
System integration /test/verification 32.2%
Operating system development/test 5.5%
Prototype development 26.3%
Algorithm engineering 5.5%
Operating system development/test 23.9%
Board level engineering/test 4.7%
Board level engineering/test 21.8%
Prototype development 4.0%
Mechanical engineering 6.1%
IC/SoC design/verification 5.7% IC/Soc design/verification 1.8%
Other 4.7% Mechanical engineering 0.8%
0% 20% 40% 60% 0% 10% 20% 30%
Note: Percentages sum to over 100% due to multiple responses.
11 – 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

13. Embedded Market Fueling Enterprise Change
Device evolution amplifying engineering gaps
• Resource and expertise shortage • More demand being placed on back-end
enterprise systems
• Proliferation of embedded devices
• Increasing push on enterprise software
• Higher level of device software developers to conduct embedded
functionality software engineering
• Ubiquitous connectivity • Decreasing time-to-market windows
• Demand for RT analytics fueling • Escalating need for automation and
dynamic user experiences engineering synergies
12 – 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

14. Software & System Lifecycle Management Tools
Growing use of SSLM tools driving ecosystem evolution
Tool Usage for Current Projects
(Percent of Respondents)
Compilers 84.8% Source/change/ configuration
management tools 57.4%
Debuggers 77.3%
Bug/issue tracking tools 45.2%
Editors 76.8%
Project management/planning tools 42.6%
JTAG debuggers/In-circuit emulators 54.6%
Requirements management tools 17.4%
Build tools 50.3% Build/production/release management
tools 13.8%
Static analysis tools 19.8%
Collaboration/document sharing tools 13.5%
Virtual platforms or virtual
15.2%
prototyping/simulation tools
Software test management tools 13.2%
Instruction set simulators 12.6%
Software/system modeling tools (Standard- Peer code review tools 10.1%
11.6%
language-based) Software IP/licensing/
compliance/component management tools 6.8%
Dynamic software testing tools 10.1%
Build analysis tools 6.2%
Model-based software testing tools 9.8%
Software/system modeling tools Security management tools 3.1%
8.8%
(Proprietary-language-based)
Dynamic GUI/HMI design tools 8.2% Portfolio management tools 2.9%
None of the above 5.7% None of the above 15.3%
Don't know or not yet decided 1.8% Don't know or not yet decided 3.9%
0% 20% 40% 60% 80% 0% 20% 40% 60%
Note: Percentages sum to over 100% due to multiple responses.
13 – 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice

15. Research in the Works
New product offering available shortly
• 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

16. Q&A Session
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 Rommel
Senior Analyst, Embedded Software & Tools Practice
crommel@vdcresearch.com | 508.653.9000 x123
Steve Balacco
Director, Embedded Software & Tools Practice
sbalacco@vdcresearch.com | 508.653.9000 x124
Cyril Bernard
Senior Account Executive
cbernard@vdcresearch.com | 508.653.9000 x142
15 – 2010 VDC Research Group, Inc.
Embedded Sof tware & Tools Practice