VDC Research: Embedded Microprocessor, Board & Systems Market Blog

Hardware OEMs Need Not Fear Software Abstraction

Networking has never experienced innovation that would so dramatically benefit the work of software engineers and developers worldwide, until recently. Software Defined Networking (SDN) and Network Function Virtualization (NFV) are at the center stage of a technological revolution. However, how will these relatively new technologies impact traditional embedded hardware markets? Though SDN and NFV present substantial benefits to networking infrastructures, VDC Research believes SDN/NFV technologies will have only a marginal impact on embedded hardware markets through 2018.

Mobile network carriers and internet service providers now have an answer to further optimizing and improving upon their legacy infrastructures; a blessing disguised as a virtual and mobile network capable of supporting virtual devices disconnected from physical design. SDN and NFV are extremely similar in that both optimize hardware resources via software implementations. More specifically, SDN enables users to program network layers separating the data plane from the control plane. NFV enables agile distribution of networking resources when and where they are needed. With this elevated level of programmability, users can more easily optimize network resources. Service and network providers now have the ability to increase network agility, service quality and  time-to-market, and guarantee a more dynamic, service-driven virtual network.

Because NFV is more focused on the distribution of networking resources for when and where they are needed, the technology’s principal supporters are telecom service providers such as AT&T, BT Group, Deutsche Telekom, Orange, Telecom Italia, Telefóno, and Verizon. On the other hand, SDN focuses more on enterprise networking and the associated embedded hardware. Software solution providers such as Big Switch Networks, Cisco, Dell, HP, IBM, Juniper, and VMware all offer SDN controllers.

Growth in cloud-based solutions have led more and more companies to rely on SDN and NFV as major components to their technological infrastructure. Through abstracting network hardware with either NFV or SDN, companies are able to take advantage of changing dynamics in the market or application requirements – as opposed to being exposed by them. For example, IT administrators in the past would have to rely on costly ASICs to control network traffic flow. With SDNs, the administrator can manage data traffic in a very effective manner using legacy or other hardware.

NFV is a very straightforward and carrier-driven technology that continues to be increasingly popular in telecom applications. However, the deployment of SDN is not as straightforward. The main issue with SDN is how new the technology is. We recognize that SDN and its relative infancy are problematic for those lobbying to IT budget holders. IT operations are the backbone of many critical business operations, though, and it is important that suppliers reinforce the operational and fiscal advantages of SDN technology.

Not only are SDN and NFV still in their infant stage, but early adopters will be potentially more vulnerable to higher deployment costs, lack of availability of trained people, and insufficient support in open source software (which will become more important as open source software continues expanding in embedded applications and technologies like SDN/NFV). However, SDN and NFV have the potential to greatly increase the effectiveness and manageability of networking functions when fully developed. Despite the vast benefits enabled through SDN/NFV technologies, they will only marginally impact the embedded hardware market through the next several years.

by Conor Peal, Research Associate

Real-time Analysis Accelerating Hadoop Market Opportunities

In the big data environment, Hadoop is the fast-growing open source batch processing system emerging as the popular choice for companies handling large volumes of multi-structured data. Hadoop excels with its distributed processing framework, and is primarily used for extracting, storing, and processing both structured and unstructured data. However, Hadoop’s downfall is its inability to produce real-time analysis. Typically, once Hadoop has processed the data, the data is then moved into SQL-based environments for real-time analysis. The major disadvantage of this system architecture is the increased costs when data is pushed to SQL-based engines. Hadoop offers full scalability, and if real-time analysis capabilities were integrated, it would become one of the most efficient and cost-effective solutions available to customers. As a result, real-time analysis capabilities in Hadoop represent an increasingly significant opportunity that few vendors currently offer.

If big data technology vendors are able to deliver a real-time query option within Hadoop, it would completely eliminate the need for data to be moved into SQL based environments. Last spring, Cloudera released the Impala query engine, which scales its open source massively parallel processing (MPP) solution across Hadoop, allowing customers to run SQL queries on data stored in Hadoop. This eliminates the need for multiple platforms or sets of data, as everything is done on the same Hadoop database. EMC followed with HAWQ, its SQL querying engine which scales its Greenplum MPP solution across Hadoop.  Twitter recently released Summingbird, which merges Hadoop and Storm, Twitter’s open source distributed real-time computation system, in one open source system. This hybrid system combines the best of both worlds – Hadoop processes the large volumes of data while Storm handles the real-time analytics.

The need for these solutions is becoming more apparent, and with the first few solutions already available, others are not far behind. One issue is that most of the current solutions are still slower than queries against relational databases. If a solution becomes available that can run Hadoop queries as quickly as queries against relational databases, the impact on the big data analytical landscape will be significant.

By Sarah Forman

Research Assistant, M2M & Embedded Technology

The 64-bit Processor Bandwagon

Shortly after Apple announced its iPhone 5s would feature a 64-bit processor, Samsung quickly followed that it was also developing a 64-bit processor for mobile devices. Other major companies have since announced their intentions to release 64-bit mobile processors in the near future too; reports rumor that Broadcom, NVIDIA, and Qualcomm could unveil their new processors as early as January at CES 2014. This led us to ask, how much real value does a 64-bit processor currently bring to mobile products?

32-bit processors can only utilize a maximum 4GB of RAM. With access to 2⁶⁴ memory locations, 64-bit can process significantly more data. However, memory requirements in current mobile devices are far from reaching this 4 GB ceiling. For example, the iPhone 5s only features 1 GB of memory, in terms of RAM, and the Samsung Galaxy Note 3 is equipped with 3 GB. Clearly, memory is not a major concern in the development of mobile devices in comparison to other factors and would not drive the need for 64-bit processors in this arena.

Not only can the 64-bit architecture process larger quantities of data, but more memory locations increase data processing velocity. However, while hardware capabilities are improved, software is still a step behind. Lagging software is forcing processor OEMs to develop 64-bit processors with backwards compatibility for 32-bit software environments, as seen with Apple’s A7 chip and upcoming 64-bit processors based on the ARMv8 architecture. Yet, since 32-bit programming platforms are not optimized for 64-bit processors, devices cannot take full advantage of the amplified volume of memory locations and run with only marginal performance gains. Certain applications may even run slower since they are working in a sub-optimal 32-bit environment.

Currently, it seems most companies are developing 64-bit processors to remain competitive with Apple’s A7, despite a lack of drastic improvements to performance. Consumer perception and marketing drive current development so companies can have a 64-bit processor in their specifications. Yet in the longer run, the 32-bit to 64-bit shift could alter mobile devices’ role to the average consumer. Mobile devices may pose as an increasingly viable and competitive alternative to PCs, able to process data at comparable speeds. Such a transition is still years away, though, as even the transition from 16-bit to 32-bit for PCs took a around 10 years.

As companies rush to release their own 64-bit mobile processors, much investment in R&D is spent inefficiently on creating working products and not necessarily optimizing embedded hardware to its full potential. With branding as the driver for development, the current use of 64-bit processors in mobile devices remains more of a marketing gimmick than technological advancement and will likely remain so over the next couple years.

By Howard Wei

Research Assistant, M2M & Embedded Technology

Can Intel Manufacture Architectural Gains?

Recent announcements stemming from Intel’s annual analyst day have provided ample insight into the company’s embedded strategy to maintain and grow the x86 architecture. While Intel’s plans to quadruple tablet processor shipments next year would put a dent into ARM’s share in that arena, the company’s expanded custom foundry business offers significantly more long-term potential. Intel will be providing access to Intel Architecture that can be added to customers’ IP cores in system-on-chip devices. The company will also allow customers to select their level of engagement, from design and test services to purely manufacturing. Though many details on Intel’s refocused foundry business are scant, we believe it has the potential to be a prominent contributor to x86 growth over the next several years.

Intel’s expanded foundry services greatly support x86 in a number of ways:

• First, Intel retains the control to pick and choose exactly what they will fabricate. Intel isn’t going to cannibalize sales of their own processors through manufacturing SoCs for fabless competitors in the embedded markets that it plays in. The company can also equally regulate the integration of foreign IP. 
• Second, expanded customization services will help Intel’s new Quark SoCs in penetrating new and traditional embedded markets. Intel will surely discount customization services of its homegrown productsbecause of the higher margins captured from semiconductor design. Such pricing reductions are the premise for Intel’s planned expansion into tablet devices.
• Third, Intel’s foundry ecosystem is growing to accommodate increasing flexibility in development platforms. In addition to Intel EDA tools, customers will be able to leverage software development tools from Cadence, Synopsys, and Open-Silicon.

By expanding fabrication services, Intel stands to grow its architectural share at the expense of dedicated foundries. The expansion also enables Intel to become more proactive to market shifts. Though specific details on Intel’s new semi-customization services remain scarce, we believe the growing foundry business will help grow x86 in embedded markets over the long-term.

Winning Big With M2M – Pamplona Capital Management Increases its Stake

Yesterday, Mac-Grey was acquired by CSC ServiceWorks for a 41% premium over Monday’s share price. This is interesting to us because of the M2M element. The newly combined entity represents a perfect example of what can happen when things coin-operated or otherwise are connected to the cloud.

 Mac-Grey provides M2M enabled commercial laundry products and services. For example, if you owned an apartment building and wished to provide an on-premises laundry room, you might contract with Mac-Grey to provide that service. Mac-Grey would install and manage the washers and dryers and you, as the building owner, could collect a revenue stream without the hassle of owning and maintaining the machines yourself.

The M2M element comes in because Mac-Grey was extremely successful in embedding M2M connectivity into the laundry machines it owns, sells and/or supports. Because of M2M, users can see if machines are available at their facility and receive alerts via a mobile app when their laundry is done. Multiple payment options are now more practical and the business owner and users have the appropriate visibility on machine usage patterns. Service is automatically summoned at the first sign of trouble and Mac-Grey can efficiently assign its staff as needed.

Pamplona Capital is quietly building an M2M-enabled portfolio of companies. CSC ServiceWorks was formed in May, 2013 through the acquisition of CoinMach which was also providing laundry services and Air-Serv, which provides the tire-inflation and vacuum kiosks that you often see at convenience stores and gas stations. In June, the portfolio was increased by the acquisition of Sparkle, a Canadian laundry services firm. Now the portfolio, held by the Pamplona Capital Management, includes Mac-Grey. One would think that leveraging the Mac-Grey M2M expertise along with elements from all the other entities should create an even stronger M2M-enabled set of products and a streamlined service organization to support them.

I imagine that Pamplona's name has something to do with the running of bulls which would be a good thing in financial markets but dangerous otherwise. In this case, running with M2M is a pretty safe bet. 

For Microprocessor Vendors, The Enterprise Is Not the Future According to New Research from VDC Research

VDC is pleased to announce the publication of its annual outlook for the global market for embedded CPUs, MCUs and FPGAs.  This research is an invaluable strategic and tactical planning tool for chip, tool, and board vendors. 

Hightlights include:

• We expect ARM to continue to take CPU market share from Intel in the years to come, though Intel will succeed in defending its position in high-performance applications.

• Xilinx will cede FPGA market share to growing competitors Altera, Lattice Semiconductor, and Microsemi – who all stand to benefit from strong global demand for communications equipment, and OEMs’ continued migration away from ASICs.

• The MCU market will grow rapidly, with the automotive sector representing an increasingly large share of the market.

• Heterogeneous computing will drive big changes in the markets for all discrete processing technologies. As integrated architectures are used to consolidate functionality and boost processor efficiency, traditional vendors will need to deploy new business strategies to drive growth and margins.

• The importance of tools when selecting a chip will drive additional M&A activity, as large chip vendors swallow smaller tool providers.  Potentially attractive acquisition targets include DDC-I, IAR, or Lauterbach.

• The market for these embedded processing technologies (CPUs, MCUs and FPGAs combined) will grow to over $US 40 billion by 2017, at a compound annual growth rate of 6.9% overall.

To learn more download the executive brief now or see our recent press release here.

Embedded Processor Revenues (2012-2017)

Keep Calm and Carry On, Discrete DSPs

Processor technologies are undeniably moving towards consolidated, integrated architectures to take advantage of multiple processor types in tandem while saving on size and power consumption. While such heterogeneous ICs are changing the way chipsets are developed, licensed (core IP), and manufactured, not all applications need or necessarily want them. High-performance remains the chief metric by which end users select embedded processors, particularly for those using digital signal processors (DSPs). As a result, intensifying application requirements will preserve the market for discrete DSPs in a world increasingly prevalent with holistic system on chips (SoCs).

Signal processing requirements are escalating in a variety of industries. The continued expansion of 4G wireless technology throughout Europe, as well as increased 3G adoption in emerging Asia-pacific countries such as India, will fuel growth for high-performance DSPs in base stations and other access layer equipment. The greater demand to provide sufficient cellular quality of service and coverage is amplified by the tremendous growth in connected devices produced by the Internet of Things.

Though upgrading and deploying new backhaul networks will be the leading application for modern and next-gen DSPs, high-performance signal processing will still be crucial in other industries, such as consumer electronics and industrial automation. For example, the new Apple iPhone 5s includes a secondary coprocessor, the M7, embedded with DSP technology specifically designed to easily manage and migrate sensory workloads from the main processor – simultaneously increasing device performance and saving energy. Similarly in the industrial automation space, the growth in peripherals on the shop floor such as cameras and sensors for machine vision applications will necessitate the parallel processing performance of high-end DSPs.

Though several discrete processor markets continue to combat SoCs for design wins (including DSPs), the proliferation of heterogeneous processors has allowed traditional DSP suppliers to form new revenue streams through IP licensing, much like what is already done for CPU and GPU cores. Furthermore, new and growing application requirements will still require pure, optimized DSPs for the foreseeable future. For these reasons, we believe discrete DSP manufacturers can keep calm and carry on.

Calling all Embedded Board & Module Suppliers – Stand up and be Heard!

The winds of change are blowing through the embedded computer board and module market. As 2014 approaches, recent market consolidations and reorganizations will solidify. 2013 will go down as one of the most important years for suppliers to make their voices heard by VDC. Why is this so important? In 2014 and beyond there will be significant shifts in demand for embedded board and module products as seen by these results from VDC's 2013 survey.

Many OEM engineers will be designing their new products and, for the first time they will be using embedded modules as opposed to other product alternatives. At the same time, existing module users will be looking to migrate to the latest x86, ARM and/or FPGA processors and module types. These OEM engineers will value an authoritative 3^rd party source to better allow them to determine which product types are strongly supported and, which product types not gain the necessary market traction.  On a similar note, these OEM engineers and other entities with interest in the embedded market are looking to VDC to determine which suppliers are becoming the most resilient, innovative, and successful in the markets they serve. VDC provides this industry-wide guidance by taking a 360 degree view of the market but, even so, the supplier inputs we receive are, among the most valuable.

At present, VDC has been in contact with over 90 suppliers we believe are significant to the market and after many initial discussions have provided our top-level estimates for their company. We are following these e-mails and calls with our 2013 survey that has detailed estimates. If you have NOT received these e-mails, calls and survey and, you believe your company should be represented, please contact us immediately. If you have received this survey it MUST be received by Friday October 4 to ensure any corrections or fresh guidance are included in the VDC models that drive our reports.

 

Intel’s Sub-Atom Quark is a Big Opportunity

Intel finally announced earlier this week its answer for branching into true low-power embedded applications – the Quark SoC. Quark is Intel's first product for low-cost, small form-factor embedded markets, which often prioritize power consumption and footprint over performance. Though Intel faces tough competition in the embedded space from a variety of players, the growing opportunity generated by the pervasive Internet of Things will be large enough for Intel to carve additional share outside traditional PC and enterprise-computing markets.

Quark is Intel's first synthesizable CPU core, allowing others to incorporate third-party silicon IP into the SoCs Intel will manufacture. Technical details are scarce, but what we do know is the demonstration chip presented at IDF 2013 is x86 compatible, measures 1/5th the size and 1/10th the power consumption of the Atom processor, and contains a single-core, single-thread 32-bit architecture.

The market opportunity for Quark is great. Connectivity is creeping into ever-more devices and applications, including the new SoC’s initial targets such as industrial automation, medical, and wearable devices. Though prospective customers can integrate various WiFi/cellular radios to enable connectivity, software remains the chief barrier to successful implementation. Intel hopes to mitigate development efforts through incorporating a software stack that includes security, manageability, and connectivity features. No word yet on supported standards.

However, IP-licensor ARM and processor suppliers such as Freescale and Qualcomm already have a firm foothold in several embedded markets. The ARM architecture has flourished in low-power designs, and now intends to challenge Intel in high-density server and high-performance computing markets. Quark is poised to compete with ARM’s Cortex-M series processors, the most used ARM architecture cited by over half of respondents from our 2013 Embedded Hardware End User Survey. The rich ARM ecosystem offers vast resources and integration support that no single company can completely encapsulate.

While there is no off-the-rack market for Quark, OEMs and other embedded processor end users will greatly value the advanced production process and additional features. The limiting factor of Intel’s success will be price. The company isn’t accustomed to selling lower-cost units beyond its Atom line – which are still too costly for many high-volume embedded applications beyond tablets and handsets. Nevertheless, we believe Intel’s strong brand and ample resources will allow Quark to penetrate several new embedded market segments once production begins later this year.

3D Printing Will Impact Embedded Computing? VDC’s View of the Future

Technologies are evolving quickly in 3D printing and new nano-materials. Will these new technologies impact the market for embedded computing products? We believe the answer is, yes, but, not immediately. The 3D printing process is too slow for the production volumes needed for many if not most products that contain embedded computing. The first embedded market impact of new 3D and nano technologies will be on the engineering processes that create products not the products themselves.

Is the concept of printing electronic circuits new? Not in the slightest. When I first began my engineering career in the late 70s, the company I worked for produced laser trim systems. These systems were used by customers to measure and perfectly adjust the resistors on ceramic modules that had been printed using a silk screen printing process.

Exhibit 1: Screen Printed Thick Film Ceramic Module

After process steps for printing the circuit traces and resistive components, the laser system would then be used to make continual measurements as laser pulses cut into the resistive material. This would increase the resistance until it met the target value. Prior to laser technology, this same task would have used a sand blast method. In either case, the modules would be completed by adding semiconductor dies and encapsulating the module.

Printed circuit boards (PCBs) are not really printed as much as they are plated and etched. Because of the density and complex circuits multiple layers are usually required. PCBs like the 70’s era ceramic modules require significant manpower and expense to design and layout the circuits and then create the necessary screens and photo masks needed to produce the product. Even with all the automated tools that engineers can utilize, this PCB development process can take a significant amount of time. If the first articles produced are found to have problems, a re-spin adds more time-to-market delay. It is worth noting that the equipment needed to create PCBs and embedded modules are expensive and therefore most companies rely on contract manufacturing specialists to produce them.

The same pictured module could be produced using a 3D printer either on top of ceramic or, perhaps, using another material as a substrate. The base might even be flexible, allowing the finished product to be more adaptable. By precisely controlling the amount of resistive material, a trimming process could possibly be eliminated. Even capacitors could, (in theory), be printed.

Most importantly, a small engineering team could be testing a prototype of a new embedded computer product within hours of developing it. Production of the verified design would still be completed by the aforementioned contract manufacturers, but the time-to-market would be more compressed and there would far less uncertainty about having to make engineering corrections. At a minimum, the ability to rapidly produce prototypes and proof-of-concept products can level the playing field for smaller less capitalized embedded computer suppliers.

In the distant future, as 3D printing capabilities and speed increase along with the development of nano materials that can be used as “ink”, embedded hardware may take on an entire new meaning. Consider an automotive part like a bumper that was manufactured with all of the electronics needed for a collision avoidance system completely embedded in the bumper’s material. As the bumper is printed, the circuit traces and components could be printed or picked and placed. Is this printing/embedded process feasible today? No, but like previous disruptive technologies its time will come.

What should embedded suppliers do now? As 3D and material technologies start to mature and stabilize, suppliers should begin to use 3D printing to produce prototypes of embedded sub-modules. This exercise should be conducted in parallel with traditional processes to test if and when time to market compression exists. When the new technologies are proven, suppliers can confidently develop new products because they will know that the engineering prototypes they produce will be reliable proxies for their completed products.