15 posts categorized "Third-Party Outsourcing"


Outsourcing in the Embedded Market

OEMs turn to third-party engineering services for a variety of reasons.

A recently published industry brief by VDC Research examines OEMs’ use of third-party outsourcing for various embedded software engineering services including its benefits, drivers, inhibitors, and competitive landscape. The industry brief also includes various statistics around the use of outsourcing within embedded engineering development projects.

Engineering Tasks Most Frequently Outsourced to External Companies

(Ranked by Percent of Respondents)

Not outsourcing any engineering tasks


Software application/middleware development/test


Board level engineering test


Firmware development/test


Mechanical engineering


System integration/test/verification


Outsourcing in embedded software development is driven by OEMs seeking decreased costs and/or improved product quality and by vendors supplying the market with complex, customized combinations of services. Today’s embedded products have become increasingly sophisticated and software development comprises a growing proportion of the product development lifecycle, leading many OEMs to turn to outsourcing to leverage the experience and efficiencies of third-party providers.

Outsourcing vendors that compete in the embedded software space are located throughout the world and include large multi-national companies as well as smaller, boutique firms that focus on specific geographies and/or vertical markets. These vendors seek to differentiate themselves by leveraging alliances, partnerships, acquisitions, and/or experience. They also look to emphasize the talent and global reach of their engineering work force as well as the completeness and flexibility of their service offerings and pricing models.

VDC examines outsourcing in greater depth in the recently published Third-Party Outsourcing of Embedded Software Development Services – An Industry Brief. The brief also includes profiles of several competing vendors as well as an examination of how OEMs should approach the outsourcing decision and what vendors should consider when positioning their service offerings. To view a complimentary executive brief highlighting additional findings from the report, click here.


2010 Embedded Software & Tools Market Update & Outlook - Webcast Available

We want to thank everyone who attended our webcast, "Embedded Software and Tools Market Update & Outlook."  We hope you found the content both useful & interesting.  

In case you missed the live webcast, here is a link to its recording and slides.  Please note that registration is required to view the recording .

Please be sure contact us directly if we can help answer any questions you may have on the presentation or our thoughts on the 2010 embedded software and tools market in general.


2010 Embedded Software & Tools Market Update & Outlook - Webcast Today!

It is not too late to register for today's webcast!

During this complimentary webcast, we will discuss the challenges facing embedded device and systems manufacturers and their embedded solutions providers and offer our thoughts on how they will have to adjust given the current economic climate. Specifically, the webcast will address the following key questions: 

  • How have economic conditions affected embedded software solution suppliers?
  • What does the competitive landscape look like?
  • How will supplier consolidation affect the market?
  • How are multi-core requirements impacting embedded software development?
  • What types of tasks are being outsourced by OEMs and what are the opportunities for embedded software solution suppliers and partners?


Tuesday, December 8, 2009 1:00 pm
Eastern Standard Time (GMT-05:00)

Click here to register


2009 Embedded Engineering Survey Data ~ Available Now!

With the increasing complexity of embedded software and hardware designs, the 2009 end-user data books provide insight into the behavior, opinions, and demographics of embedded engineers, the degree to which embedded system engineering tasks are converging, and key system engineering trends likely to impact embedded systems manufacturers and solution providers over the short and long term.

This end-user data is based on detailed Web survey responses collected in the late May 2009 to mid September 2009 time-frame from over 780 embedded systems engineers worldwide and offer an understanding about the dynamics of the embedded market as they relate to current and future product development trends. This detailed end-user data provides access to VDC’s extensive knowledge of the embedded developer community and is intended to provide insight into specific embedded developer communities’ current development and future project trends based on the individual report topics.

The Embedded System Engineering Survey Data is available in reports offering segmentations by:

  • Operating Systems
  • Development Tools
  • Vertical Market
  • Region
  • Processor Architecture
  • Engineer Type

What’s new? different? the same?

  • Although these reports are organized into six volumes similarly to previous offerings, this year’s reports also include PowerPoint presentations, highlight key findings and offering some analysis around the results and broader market trends.
  • We continue to ask many of the same questions as previous years for year-over-year comparison.
  • For a full the Full List of Exhibits from the 2009 and 2008 Survey Data reports, click here and here.

Who should be interested?

Software (ESW, ESL, and EDA) and hardware (silicon and board) solution providers (whether currently engaged in the embedded market or not) should find this information of interest, as these reports provide valuable insight into the types of current and future requirements and methodologies that companies are using to engineer embedded systems.


This information can be used to assist companies in differentiating solutions, developing competitive strategies, and engineering products that better meet current and future customer requirements. In addition, the data can also be used to support key marketing and sales efforts.

Systems manufacturers and semiconductor suppliers will also find value in this data in developing an understanding of key system engineering trends that will impact their business in the short and long term, gaining a perspective on the embedded software and hardware market, and an understanding of the vendor options available to them.

What information are we collecting in 2010?


VDC will be launching an update to this Survey in the Q1/Q2 time-frame of 2010 as part of our 2010 Embedded Software Market Intelligence Service.


With the 2010 Service currently under founding sponsorship, early subscribers can provide input into what additional questions are asked of the embedded engineering community. 


We are also interested in your general feedback and suggestions, so please reply with comments!

For further information about VDC’s Embedded Software Market Intelligence Service contact:

Steve Balacco, Director, 508.653.9000 ext. 124, sbalacco@vdcresearch.com

Chris Rommel, Analyst, 508.653.9000 ext. 123, crommel@vdcresearch.com

Cyril Bernard, Senior Account Executive, 508.653.9000 ext. 142, cbernard@vdcresearch.com


Visit our website.


Do you know who wrote the software in your blender?

Outsourcing increasing the need for test automation

Nearly 50% of our respondents to our 2009 Embedded System Engineering survey reported the outsourcing of one or more engineering tasks to external companies for current projects.  This rate is a substantial increase over our 2008 survey results in which less than 40% of respondents cited engineering work being outsourced.   

Outsourcing test2   
Note percentages

Moreover, software application/middleware development/test – arguably the most important discipline for end product differentiation – was cited by our survey respondents as the most frequently outsourced engineering task, underscoring the importance of establishing and/or enhancing software testing practices going forward.

Well before the early signs of an economic downtown began tightening R&D budgets, leading embedded system manufacturers had begun embracing outsourcing in greater numbers and frequency as a means to tap into cheaper labor markets, reduce operational expenses, and improve organizational agility.

The sophistication and complexity of embedded software requirements have also continued to rise at the same time as these other cost and time-to-market demands already strain project teams’ available bandwidth and productivity.

The ability to effectively manage software component quality can only become more important going forward as a greater portion of engineering work is outsourced to third parties.  We expect that this continued growth in outsourcing will similarly augment growth in the commercial automated test and verification tool market as OEMs look to mitigate some of the risks associated with work performed by engineers unfamiliar with legacy code bases and dispersed across multiple geographies and time zones.