VDC Research: Embedded Microprocessor, Board & Systems Market Blog

IoT Forcing Embedded Boards and Systems Vendors to Adapt to Survive

Emerging embedded hardware requirements are stirring up competition for motherboards and integrated systems while driving demand for more IoT-related systems integration services.

The global markets for embedded boards and integrated computer systems will see growing competition over the next five years, according to a new report by VDC Research (click here to learn more). The embedded hardware space is vast, continually evolving, and extremely fragmented with larger organizations often supplying several different board and/or system form factors as well as potentially a variety of SKUs featuring different configurations thereof. Systems integration services, in turn, are benefiting from the growing complexity of modern (connected) embedded systems and are seeing greater use for IoT designs.

“Complacency now will seriously hamstring the long-term development and growth potential for all embedded hardware players,” says VDC analyst Daniel Mandell. “Ramping requirements for processing performance, footprint, and scalability are forcing embedded hardware suppliers to adapt and adopt to new product form factors such as MicroATX, VPX, and xITX. Some more mature hardware form factors like ATCA will continue to see slight growth through the next five years, though new organic revenue generating opportunities for incumbent suppliers will be scarce and increasingly challenged by alternative architectures.”

For small-form-factor embedded systems, computer-on-modules (COMs) have emerged as a convenient solution for enabling cost-effective hardware flexibility. While a variety of COM standards have fragmented the market, some form factors such as COM Express and Qseven are expected to see strong market growth. Kontron is the longstanding frontrunner of the embedded COMs space, having pioneered the concept. Unlike COMs, the global market for PC/104 family modules is expected to remain relatively stagnant through the next five years as suppliers look to adopt newer and more heterogeneous form factors like EPIC.

The market share leaders for embedded integrated systems have focused their recent acquisitions and collaborations on facilitating software development and enabling broader industry application support. The potential acquisition of EMC Corporation by Dell could produce a new leader in the embedded integrated systems market. HP Enterprise has made some dramatic acquisitions in 2015 to expand its portfolio of LAN offerings and help its customers transition to hybrid cloud environments. To remain competitive with new and traditional market players, embedded systems suppliers must bolster their support and development offerings for more of the solution stack.

Online Resources: VDC's Embedded Boards, Integrated Systems, and Systems Integration Services Research Program - Learn About The Research Program

IoT Gateways Paving the Way for New Corporate Relationships

IoT gateways are not only connecting device and sensor networks, they are also accelerating the development of a broad variety of new corporate partnerships and collaborations between hardware suppliers and ISVs, OEMs, MNOs, solution/service providers, and others throughout the broader IoT ecosystem. The past several months have seen a flurry of activity among gateway technology providers of all sizes looking to augment their own portfolios with more functionality, integration support, industry-specific capabilities, and more. The gateway device class will continue to be a critical element of IoT solutions and enabling new channels of distribution for hardware, software, and service providers looking to enter the space.

One example of the newfound relationships being established between IoT gateway vendors and connectivity service providers includes Eurotech’s recent partnership with Arkessa in August 2015. The partnership helps facilitate the development of cellular IoT solutions by adding managed connectivity services to Eurotech’s gateways, hardware, and supporting software platforms using Arkessa’s global multi-network cellular and satellite services. Several other gateway hardware suppliers are taking a similar approach to expanding their regional market addressability through broader cellular network support – the most supported wireless connectivity technology among IoT and intelligent gateways being shipped today.

Arrow Electronics, a leading global distributor and provider of value-added services to electronic components and computer products, teamed up with NetComm Wireless, a global developer of M2M devices and gateway systems, in September 2015 to launch the first phase of its new Arrow Intelligent Services framework. The new framework, which represents a first venture for Arrow Electronics from its traditional product offerings and engineering services, looks to simplify and expedite IoT deployments worldwide with edge-to-enterprise integration using standard web services and APIs. Arrow Intelligent Gateways, the first part of the new framework providing off-the-shelf management capabilities for a number of product categories, will help normalize configuration and management of NetComm Wireless’ devices.

The IoT is largely about connecting and integrating hardware with new software platforms and services. Establishing end-to-end IoT solutions will continue to require a variety of new corporate relationships. Gateways have become a fundamental part of the IoT solution stack and establishing connections with these vendors will be critical to the success of new connected products and offerings.

To learn more about VDC Research’s recently published report on the IoT & Intelligent Gateways Market, see our Executive Brief here.

Highlights from FTF2015: Seeding Companies with Technology to Create Secure IoT Devices

• Several new Freescale processors announced from secure MCUs to multicore SoCs
• FTF product showcases spanned automobiles, hospital beds, IoT gateways, and much more
• NXP integration ongoing; expected to wrap up end of year
• Merger adds embedded security capabilities, ID solutions, sensors

Freescale hosted another successful Freescale Technology Forum (FTF) last week in Austin, TX at the brand new JW Marriott and the company kept everyone buzzing with its new product announcements, updates on the NXP merger, and product showcases. In addition, we were treated with expansive and interactive keynotes by CEO Gregg Lowe who demonstrated a variety of ways in which Freescale is fostering an ecosystem dedicated to accelerating the development of next-generation systems as well as Apple co-founder, Steve Wozniak. 

The merger with NXP was an extremely hot topic with everyone clamoring for answers as to the implications of such a large acquisition for both sides. Back when the merger was first announced earlier this year, I found the unity to be synergistic  with little overlap. The area with the greatest overlap between the two companies, RF products, was resolved in May with the sale of NXP’s RF Power business to Chinese private equity firm JAC Capital. Both Freescale and NXP have teams of 30-40 personnel aggressively working towards the integration of the companies. It was apparent at the event, though, that much is still to be done in terms of planning for the alignment of specific product families and integrating solutions between the two organizations.

The motivation behind the acquisition of NXP is multifaceted. First, security is paramount to the development of IoT products and solutions. The addition of NXP’s security IP will amplify Freescale’s penetration of such connected applications and facilitate the development of more-comprehensive solutions. Not to be forgotten is that both companies have seen strong growth in terms of revenues and profit margin and investor requirements are pushing for consolidation within the maturing embedded processor landscape. The merger is expected to save the combined entity nearly $400M in OPEX and $100M in COGS. No plant closures are expected and the company is focused on making the transition at seamless as possible for customers (so no re-qualifying, no products being moved geographically, etc.).

Freescale took a unique approach to entering the Bluetooth Low Energy (BLE) realm (or Bluetooth Smart as they like to use) by also integrating an IEEE 802.15.4 radio (the foundation for ZigBee and Thread) on its newly announced Kinetis KW40Z wireless MCUs for a variety of IoT applications. In addition, Freescale’s royalty-free BLE host stack is planned to support the upcoming Bluetooth Smart Mesh networking protocol. The heterogeneous Kinetis KW40Z MCU (there will be SKUs with just Bluetooth or just 802.15.4 support as well) is ripe for adding further capability to many of the emerging HAN and IoT applications leveraging mesh networks including smart lighting, smart door locks, building automation, as well as asset or fitness monitoring.

Other embedded processor announcements included:

• S32K MCUs – A new automotive MCU line aimed to significantly simplify software development
• K8X MCU Family – Highly-secure ARM Cortex-M MCUs
• 16nm FinFET QuorIQ – Migration of Freescale’s multicore communications processors
• i.MX 6Dual SCM (single chip module) Family – First of its new SCM portfolio of small integrated systems; fits application processor, PMIC, flash memory, embedded sw/fw, and security on a board the size of a dime
• QorIQ LS1088A octal and LS1048A quad multicore processors based on ARM Cortex-A53 cores; lays the groundwork for the upcoming QorIQ LS2 processors with ARM Cortex-A72 cores
• i.MX 7 and i.MX 7Dual series processors featuring ARM Cortex-A7 and the ARM Cortex-M4 cores

Q&A with Freescale CEO Gregg Lowe and NXP CEO Richard Clemmer

My first ever rickshaw ride getting to the keynote

The Woz!

Tech Giants Come Together to Steer the IoT

The rising wave of embedded market opportunities is being carried by the Internet of Things. Technology leaders are quickly coming together to ensure their organizations (and hardware solutions) are compatible with new standards and third-party vendors. Open industry groups and alliances will be instrumental in accelerating the development, deployment, and support of end-to-end IoT products and solutions through the next several years - though this will not be the only approach.

The Open Interconnect Consortium (OIC) and AllSeen Alliance are examples of similar yet different IoT groups. While both of their Linux-based open source projects, IoTivity and AllJoyn respectively, promote interoperability across a wide variety of vertical markets and use cases, they differ in technical implementation, licensing policies, and overall progress. For instance, the OIC, with founders including Dell, Intel, and Wind River, calls for companies to “license the technology contributed to the group”. The consortium plans to publish a standard this year and has just released a preview of its IoTivity project. Meanwhile, the AllSeen Alliance recently (January 2015) modified its IP Policy so users must comply with a patent pledge, does not plan to publish an open standard, and is preparing to release the third version of its AllJoyn protocol.  With dozens of members joining every month, founding organizations such as Microsoft and Qualcomm, and an upcoming third project release, AllSeen is currently ahead of the OIC in terms of development and membership base. However, with a soon-to-be finalized standard and its newly formed liaison with the Industrial Internet Consortium (IIC), we expect the OIC to gain much more momentum this year. 

Another group gaining traction is Thread Group, founded by ARM, Nest, and Samsung, which has a similar goal as OIC and AllSeen, but focuses solely on connected home appliances. Unlike the OIC and AllSeen Alliance, which consistently promote the openness of their IoT projects, Thread Group is a closed ecosystem of various organizations. Thread’s lack of openness will ultimately hinder its membership growth and potential expansion into new verticals, but will allow for more central control of the roadmap and supporting protocols and technologies. Regardless, membership is currently growing and Thread plans on releasing a product certification program later this year.

The Industrial Internet Consortium, founded by AT&T, Cisco, GE, IBM, and Intel, runs on a different purpose and recently formed a liaison with OIC to exchange “its use cases and architectural requirements focused on industrial markets”  for OIC’s promise to meet the requirements in its specification and IoTivity. This liason will “help to accelerate the delivery of an industrial-grade IoT architectural framework.” With almost 150 members, the IIC identifies “the requirements for open interoperability standards and [defines] common architectures.” Within a year, the IIC has already released its first energy-focused testbed and will release its reference architecture in the coming months. IIC’s new releases and partnership with OIC is a solid formula for an increase in members and development support this year. Despite its partnership with OIC, which is extremely open, the IIC only allows its members to view any of its contents. 

Founded by more than 10 companies including Cisco and Atmel in 2008, the IPSO Alliance promotes IP as a solution by documenting its use in technologies defined at standards organizations like the Internet Engineering Task Force. IPSO is currently working on an IoT architecture guidelines across multiple vertical markets with an emphasis on facilitating the usage and sharing of IP. Despite IPSO’s age and recent publications, the group’s membership growth seems to have reached a plateau at 44 companies. It is hard to see any further development from this alliance despite its duration. IPSO publishes all contents on its website, however it also requires a membership to be able to view its technical guidelines and use cases.

Focused solely on building a “strong and sustainable market advantage” through solutions based on Intel architectures, the Intel IoT Solutions Alliance is driven by “creating hardware, software, firmware, tools, and systems integration”. The group was formerly named the Intel Intelligent Systems Alliance. Intel’s alliance is steadily pumping out new solutions with a total of more than 2,500 currently available from its 250+ members. The Intel IoT Solutions Alliance primarily competes with ARM’s mbed initiative and supporting architecture partners.

Hoping to bring together different industries, sectors, and companies in Europe, the Alliance for Internet of Things Innovation (AIOTI) was launched less than a month ago on March 24th, 2015. With support from the European Commission, the AIOTI is gaining members quickly even in its early stages.

As the IoT industry is booming, so is the number of IoT-driven alliances being formed and looking to steer the [embedded] market. While the growing number of IoT consortia, specifications, and projects will help improve various different connected solutions, all groups are driven to unify  organizations by creating universal technologies, standards, and frameworks. But with each tech giant partaking in different alliances and creating standards in the hopes that others will adapt to theirs, the IoT is running into early fragmentation with a clashing of alliances fighting for their technology to be the one used by all. As most groups are in their early stages, much of the IoT has yet to be defined (and controlled). 

by Jamie Yang, Research Associate

NXP and Freescale: A Genuine Marriage

NXP’s acquisition of Freescale to form a $40B company is much more than two organizations unifying under a common banner – it is the wedding of leading embedded technology suppliers with similar, yet different, market focus and goals. Both companies provide a rich mix of embedded processors, analog and mixed signal solutions, wireless ICs, and other hardware. While there is some overlap in the companies’ microcontroller, RF, and sensor products, the rest of Freescale and NXP’s offerings are hugely complimentary to each other with cross-selling opportunities in a variety of markets including automotive, consumer electronics, and industrial automation.

While the acquisition is not a revolutionary change in direction for NXP and its target verticals, the new combined company will feature a much broader software portfolio, new products, and much greater corporate size that will enable it to compete more effectively with other semiconductor juggernauts and align with growing user requirements for facilitating development of the software stack.

Freescale has carried strong corporate momentum over the last few years as a result of its aggressive push into the Internet of Things (IoT) and investments made facilitating software development for embedded engineers. Freescale supports a variety of software development tools and environments in addition to providing the free MQX real-time operating system (RTOS) and its commercial CodeWarrior OSEK RTOS. Freescale also provides a variety of software libraries, frameworks, protocol stacks, and more. NXP, on the other hand, has done very little to facilitate software development on its MCUs and other hardware products or to supply crucial components of the software stack – instead relying heavily on its software partners for support. Embedded software has been vital to Freescale’s embedded processor market share growth and differentiation.

The acquisition of Freescale propelled NXP to become the second-largest supplier of embedded MCUs in addition to now being a leading vendor of SoCs as well. The combined assets and offerings of Freescale and NXP will also enable the company to better compete with its rival in the embedded processors space, Renesas. While there are a lot of similarities between Freescale and NXP, the general disruption of a massive merger such as this will certainly challenge the steady revenue growth enjoyed by both companies during the past three years. Nonetheless, the combined company expects to be able to shed hundreds of millions of dollars each year as a result of expanded buying power and annual cost synergies.

One of the new vertical opportunities for NXP produced by the merger is in the communications and networking space for applications such as gateways, small cell base stations, SDN switches/routers, and network attached storage with the QuorIQ platforms and PowerQUICC communications processors. While the company could divest this particular business to maintain its focus on other industries, VDC believes NXP should maintain Freescale’s communications and networking processor lines to take advantage of the rampant growth expected in that space through 2018 (5-year revenue CAGR of 10.8%) caused by the growing strain on network operators and service providers due to pervasive mobile computing and the IoT.

The proposed merger (expected to close in 2H 2015) is hugely beneficial for both companies. For Freescale, the acquisition means being able to shed some of the lingering restrictions from its long-term corporate debt issues. For NXP, it’s an opportunity to become a much broader provider of embedded technology with higher margin products. The move also greatly bolsters its software support which is becoming increasingly important to embedded hardware value every year. It will be imperative that NXP continues to develop and build its investments in enabling software and tooling support to ensure a lasting, beneficial marriage of the company’s traditional and new businesses, products, and solutions.

VDC Research is attending Embedded World 2015!

Contact us ASAP to schedule a meeting

VDC will be making the trip across the Atlantic again this year to visit the largest embedded technology tradeshow of the year, Embedded World in Nuremberg, Germany. Last year, the conference boasted 26,700 visitors and 856 exhibiting companies!.

While we are at the conference, we welcome the opportunity to meet with attending vendors to learn more about their embedded solutions and any show-related (or other recent) announcements.

You can arrange a meeting time with VDC by contacting us directly.

For meetings contact:

André Girard, Senior Analyst, IoT & Embedded Technology, [email protected], 508.653.9000 x153; or
Steve Hoffenberg, Director, IoT & Embedded Technology, [email protected], 508.653.9000 x143.

Haven't decided if you're attending Embedded World yet?

Please check out the Embedded World website for more information on the conference program as well as information on all of the companies that will be exhibiting.

We look forward to seeing you at the show!

5G Will Redefine the (Embedded) Communications Space

The rampant growth of data traffic passing through communications and networking infrastructures across the world will force the development of new technologies and embedded design approaches. The spread of connectivity spurred by the Internet of Things (IoT) and the proliferation of mobile devices are helping drive embedded communications systems requirements for hardware, software, and security. Forming the next true generation of wireless systems (5G) will require embedded engineering teams to adapt to new, integrated design workflows and collaborate with a variety of ecosystem players.

Read more in our recently published report & accompanying infographic here: bit.ly/1B5BgKJ

Software Enablement is Critical to IoT & Embedded Processor Value

The value of an embedded processor is increasingly defined by its supporting software development tools and platforms, according to a recently published study by VDC Research. The most important selection criteria for embedded processors, according to VDC’s findings, is the availability of programming tools and software (see exhibit). The Internet of Things (IoT) will accelerate this trend as design teams wrestle with implementing often newfound low-power connectivity on systems that are generally more complex. Mitigating software development efforts is therefore an increasingly vital trait of embedded and IoT processor solutions.

Software development solutions are available from a variety of ecosystem players including processor vendors, core IP licensors, ISVs, and more. In fact, software enablement is a major component to the success of embedded processor market share leaders like Freescale, Intel, and Renesas. Freescale, for example, provides a variety of development tools tailored for its processor product families in addition to specific applications and functionality such as automotive and wireless connectivity. Software development capabilities are a major factor for third-party core architectures as well, as each has their own homegrown solutions supported by ecosystem partners. As a result, ARM, Imagination Technologies, and Intel have all made dramatic investments into their respective ecosystems for tooling, programming environments, OSs, middleware, and other software over the past several years.

Use and support of integrated development environments (IDEs) and more sophisticated software/systems engineering tools has grown in parallel with the increasing end-user requirements for more robust software stacks. Currently offered/supported by the majority of embedded processor vendors, IDEs help aggregate and centralize vendors’ development tools and other resources such as SDKs, application notes, sample programs, and more. "We expect it will become more critical for these vendors to extend the breadth of their offerings to incorporate other tools such as system configuration and automated testing tools," says VDC analyst Dan Mandell. "Embedded software requires the greatest distribution of development costs and resources for today’s projects and is a major opportunity for which processor vendors can add value/differentiation, attract new customers, and/or pursue new markets."

Embedded hardware suppliers have been forced to evolve from pushing devices to supporting comprehensive solutions. Beyond the core metrics of price and performance, software takes precedence among processor selection criteria. IDEs in particular have become a common battleground for swaying influence on purchasing decisions. Processor vendors will need to continue building their software expertise and support to encapsulate more end-user requirements and, ultimately, sell more hardware.

VDC’s recently published IoT & Embedded Processors market research report forecasts and analyzes the markets for commercially available CPUs, GPUs, MCUs, and SoCs and their role in powering future embedded systems. Click Here for more information about this study and our various other coverage areas.

Cheaper Sensors, Greater Connectivity, More Sensor Fusion

As embedded auxiliary technologies such as geo fences and gyroscopes gain more popularity, the need for sensor fusion across device classes has become increasingly important. This importance has led to several mergers and innovative technology strategies from the likes of Fairchild Semiconductor and Kionix that will become more noticeable in the coming months. We expect sensor fusion to continue gaining traction in mobile/wearable device form factors and translate to the greater embedded market over the next several years.

Sensor fusion is the process by which data from several different sensors is fused together to compute algorithms too complex and resource intensive for a single sensory system to execute on it is own. In other words, sensor fusion combines data from multiple sensor types to enable greater functionality in a given device.

The entire market for sensor fusion in embedded hardware is growing at an extremely fast rate. Rich Collins, Marketing Manager of Synopsis, believes that the growth in sensor fusion is due to the need for additional processing capability and software for embedded systems which have generally grown increasingly complex. Some of the most compelling solutions have come from companies such as Synopsis, with its DesignWare Sensor Subsystem, as the current desire in the embedded marketplace is for more integrated solutions. Another interesting innovation has been seen from Kionix with their MEMS sensors which are scalable across multiple operating systems and support third-party software. Kionix is becoming increasingly notable from their developments in exercise technology and 3D gaming.

As a result of the increasing desire for embedded sensory integration, several major players in the sensor fusion market have seen mergers and acquisitions in the past 12 months. For instance, in May 2014, Fairchild Semiconductor, a provider of high performance semiconductors, announced its acquisition of Xsens, a Dutch company known for its motion tracking software. In June 2014, Audience announced it was acquiring Sensor Platforms. The fusion of these companies is leading to creative new ways of writing the algorithms required for sensor fusion. The escalating activity within the sensor fusion market will also drive growth within the MEMS market, of which several of these players have close ties to.

Sensor fusion is already translating well from consumer devices to the embedded market as a result of increasing connectivity, decreasing prices for sensor devices, and the internet of things. The limitless applications for sensor fusion will have major implications for future embedded systems.

by Joe Botsch, Research Assistant

STMicroelectronics Wins VDC’s ‘Best of Show’ Award with New F7 MCUs at ARM TechCon 2014!

VDC Research congratulates STMicroelectronics for being selected as the winner of our embedded hardware ‘Best of Show’ award at ARM TechCon 2014!

STMicroelectronics announced the STM32 F7 line of microcontrollers based on the new ARM Cortex-M7 architecture last week, and it had a functioning unit at its booth running various benchmarks side-by-side with an STM32 processor based on the Cortex-M4. The company compared the processing time needed to process 3 different types of data in separate tests based on ray tracing, fractal imaging, and 3D-vectorial computation. The Cortex-M7 device delivered almost twice the performance and digital signal processing of its predecessor. The STM32 F7 MCU series operates at frequencies up to 200 MHz using the core’s 6-stage superscalar pipeline to produce up to 1000 CoreMarks.

 

The new 32-bit Cortex-M7 processor architecture fills the midpoint between ARM’s current Cortex-M4 and low-end Cortex-A IP. It is targeted towards high-end embedded and IoT applications such as motor control, industrial automation, image processing, connected car, smart home, wearables, and more. Other leading ARM partners for the Cortex-M7 processor include Atmel and Freescale.

Once more, congratulations to STMicroelectronics!

We have another blog available from our time at ARM TechCon 2014 and JavaOne highlighting notable embedded security demonstrations and solutions.

For more information on our recently published Embedded Processors report, which analyzes the market for commercially available CPUs, GPUs, MCUs, and SoCs and their role in powering future embedded systems, click here.