PRINT THIS PAGE Putting intelligence into embedded systems
17/01/2006. Source:Wellington Partners.
The demands that are being placed on microprocessors are rising across all industries, says Wellington Partners. Which means that this hardware-dominated sector is increasingly having to rely on efficient, innovative software - an ideal field of activity for young technology vendors. Everybody knows Moore's Law, which holds that the number of transistors on a chip doubles around every 18 to 24 months - from 29,000 in 1978 to some 151,600,000 on the new Yonah processor from Intel. Yet hardly anybody is taking notice of the fact that programs for embedded microprocessors are growing at a similarly dynamic pace.
The complexity of the programs that control washing machines, enable your home stereo equipment and regulate ABS anti-lock brake systems is rising by a factor of ten every six to seven years. According to an overview from entertainment electronics corporate Philips, television sets needed only 1 kilobyte of code in the early 1980s; today, they have to have more than 2 megabytes of software in order to handle the complex processes involved in receiving and playing digital TV.
Empowering embedded systems
Across all industries, the increasing complexity of embedded computer systems, which do their work largely unseen, is necessitating a break with conventional value chains - and opening up a fastgrowing market for new entrants. Yet even in 2004, the volume of the embedded systems market had already totaled more than € 32 billion - over two thirds of which was attributable to internal and external software development. At the same time, embedded systems dominate the microelectronics market across all industries.
Nine out of ten microprocessors are being used in embedded systems today, while the much more highly visible server and PC markets account for only a small percentage.
In contrast to this PC environment, especially the software market for embedded systems is fragmented; there are still no standard cross-industry applications. Instead, the performance requirements force software engineers often enough to program a costly, custom-tailored solution for each specific application on the basis of older or close-to-hardware programming languages like C or Assembler.
Three factors are, however, sparking rising demand for standardized, reusable software modules across all industries: Time, cost and complexity.
1. Time, because stiff competition is necessitating ever-shorter product cycles on the part of all manufacturers of entertainment electronics, and thus an accelerated pace of innovation. High-end digital products have a typical development time of up to 24 months. Every quarter later that a product comes to market diminishes its market value by at least 15 percent - or probably more, since early in the product life cycle, the pricing and margins are much more attractive than farther down.
2. Cost, because embedded systems are being used in extremely price-sensitive mass markets. Software development now accounts for an estimated 80 percent of total cost; savings here afford considerably greater pricing latitude than optimizing the hardware, where outsourcing initiatives have already squeezed out most efficiency gains.
3. Complexity, because the interaction between the numerous embedded systems in an automobile, for example, is bringing with it entirely new challenges in managing this complexity, impacting system stability. According to a recent McKinsey study, 50 percent of all electronics errors in a car are now attributable to software problems.
Given these factors, it comes as no surprise that the market for commercial software for embedded systems, alone, is rising by about 19 percent per year. Standards have since been established at the operating system level in complex systems like handhelds or mobile handsets: Microsoft's Windows CE, like embedded Java, has found a new market here. Yet these operating systems are being shunned in the majority of embedded applications, as they require too much memory in even their smallest configurations. That represents an opportunity for embedded Linux, which is enjoying growing popularity among equipment manufacturers, for example.
Tremendous need for standardization
All this movement in itself causes a tremendous need for software development tools to manage the numerous combinations of system components, such as operating systems (Linux, Tron), programming languages (C, Assembler) and hardware platforms (LSI, Motorola, ARM). And it is precisely this gap that is being covered by French-based software provider NexWave, a Wellington portfolio company since the spring of 2005. NexWave proposes that the existing software be componentized down to the driver level - a relatively simple process with NexWave's products. By having these components run with a small-footprint runtime engine, the software systems can interact with one another without the need for recompiling the complete stack from source code every time a new component is developed. This enables the easy reuse of such components across companies, thus cutting time-to-market, cost and reducing complexity.
The true break-out opportunity for Nex- Wave will come when customers begin interchanging their components, thus affording an efficiency gain for the industry as a whole. This reusability could generate millions in savings per launched product at the operational level; savings and efficiency gains that have already convinced several major Japanese microelectronics manufacturers of the benefits offered by NexWave.
In a first step, CEO Joep van Beurden is focusing on the entertainment electronics industry with its high time and cost pressures: "The advantages of our systems are especially clear to see here: We are speeding up the pace and lowering the cost of software development in an industry in which consumers expect to see innovations every year, and time-to-market thus is especially critical." Enabling faster innovation in embedded systems is expected to open up further markets in the future, in a world where product innovation through computing power becomes more important every day.
Moreover, the embedded systems market in general is expected to gain significant traction in the coming decade, whether in the clothing market, the food industry or the retail trade. Across all industries, developers are working to integrate microprocessors into the products and processes we use in our daily lives. Under the buzzwords ambient intelligence or ubiquitous computing, a new generation of microprocessors or embedded systems is emerging; their software enables them to interpret what's wanted on the basis of people's behavior.
The spectrum of potential new applications ranges from clothing that responds to weather conditions to water bottles that issue reminders to drink liquids at regular intervals right through to spacing-sensitive cruise control systems that help reduce the risk of rear-end collisions. An IBM forecast shows just how pervasive devices will really become: By 2013, they estimate a billion people to be able to take advantage of a trillion electronically upgraded networked objects.
Wellington Partners
Wellington Partners invests in early-stage companies throughout Europe.
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