VDC Research: Embedded Microprocessor, Board & Systems Market Blog

IoT Market Complexity Demands Buyer Personas

The complexity of the market for IoT products and services creates enormous challenges for the IoT solution marketer. An unlimited set of applications, a complex ecosystem of partners and channels, a wide range of decision makers and influencers, and a continuously changing competitive set can leave the marketer forever chasing his tail. Critical decisions about the content, placement, and timing of marketing messages become extraordinarily difficult in the face of these complex and dynamic conditions. 

Observing these challenges, VDC undertook a disciplined search for tools and methods that could help IoT marketers think and act more strategically, and achieve better results. Given how critical content marketing is in the IoT space, we focused on identifying tools and methods that would improve digital marketing effectiveness, defined as improving lead generation in terms of both lead quantity and lead quality. The tool we identified as being the most valuable – when deployed correctly – was the buyer persona.

Download our new whitepaper on the benefit of buyer personas for IoT marketers to learn more about they can help your company supercharge its marketing, sales, product development, and customer service.

 

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.

M2M Gateways: The Savior or Nemesis of IoT Security?

The indisputable rise of connectivity prompted by the Internet of Things across industries will spur strong demand for gateway devices to bridge potentially thousands of sensors, machines, or other products per device to the internet or cloud for years to come. Consequently, the gateway has access to a trove of potentially sensitive and valuable data. An M2M/intelligent gateway is therefore a major security asset or liability, dependent on OEMs’ efforts to prevent current and emerging threats from afflicting host networks, or the device itself. Embedded security will be vital to the success of current and future M2M gateway solutions.

M2M Gateway: A compact, flexible class of hardware platform enabling communication between end devices in the field (e.g. actuators, sensors, etc.) and the cloud/internet, with the added functionality and/or flexibility (e.g. multi-standard support) and/or ruggedness of an embedded industrial computer. M2M gateways reside on the edge (i.e. defined boundary) of wired and wireless networks.

Nearly all OEMs we interviewed in support of our upcoming M2M and Intelligent Gateways Market Analysis Report cited data security as a major point of concern. In fact, preliminary findings from our 2014 Annual Embedded Engineer Survey echo this issue; Security Issues are cited as being the most challenging aspect of introducing embedded cloud services through M2M gateways.

Gateway OEMs are implementing a number of technologies and standards within their products to ensure end-to-end data security for end users. For example, Eurotech’s ReliaGATE gateways come standard with support for encryption protocols like 3DES, AES, IPsec, and SSH. ILS Technology’s M2M Asset Gateway platform enables role-based security controls that allow users to segregate asset access in addition to the resources within each asset. Sufficiently addressing the vast array of security threats will require a multi-pronged approach by OEMs on various levels of the gateway solution stack – not only digitally but physically as well in some deployments.

As the IoT continues to spread, so too will the rise in the number of different types of attacks and malicious software. OEMs of M2M gateways will need to ensure proper security of their devices pre- and post-deployment. Over-the-air updates are a fundamental requirement of today’s M2M gateways to ensure protection throughout the lifetime of the device. Embedded security requirements are greater in some vertical applications than others, but all must meet basic protocols to merely ensure network uptime – if nothing else. Security is a major concern for the IoT, and OEMs will be held accountable for breaches and other intrusions on their devices.

To find out more about our M2M & Intelligent Gateways and other Embedded Hardware research, click here.

To view VDC's Security & the Internet of Things research, click here.

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)

OEMs Shift Their Use of Professional Services to a Gain Competitive Edge

In 2013, VDC is seeing dynamic shifts in strategy for many OEMs as they respond to market pressures and position their organizations for future opportunities. As the economy improves, the calculus behind the professional services decision may change but most OEMs still prefer to outsource non-core functions. Although the OEM may be losing some product margin to pay for the services consumed, it is a small price to pay compared to the expense and risk of bringing processes back in house. Even so, we see that 10% of OEMs will be considering re-joining the 20% of their peers that do not utilize any professional services (Exhibit 1).

Exhibit 1: 2013 OEM cited current and future use of professional services

In these cases where the reduction in professional service use is being considered by the OEMs, there could be multiple forces and strategies at work. Sometimes it can be as simple as the OEM’s belief that if they want to do something right, they have to do it themselves. It also can be the result that recapturing the lost margins is worth the organizational costs and risks given the improving unit volumes. Although improving margins through insourcing may be part of the strategy, the largest gains are obtained when an OEM can better differentiate their product and therefore charge a premium price for it. Therefore, it is likely that OEMs with proprietary processes and technologies that provide differentiation feel they need to insource to protect their intellectual property.

Despite the advantages that insourcing may have, a growing majority of OEMs see outsourcing as the best way for reducing development costs while still being able to take advantage of new technologies. A prime example might be the new 4^th generation of i7 processors being rolled out by Intel. If an OEM was going to directly embed them, they would need to gain expertise and knowledge of the new Z87 Express chipset. It also might be difficult for an OEM to even obtain those components because they are likely to be in tight supply and the Intel alliance partners would be in a position to have better access. For similar reasons, an OEM would be better off looking to an embedded supplier for an AMD G-Series SoC based hardware product. In that case, the OEM could be focusing their internal resources on activities to develop an HMI application that fully utilized the embedded graphics capability. Doing so could make their product sparkle in ways a competitor might find difficult to duplicate let alone surpass.

At the Design West – Embedded Systems Conference 2013 – Part 2

In this blog we will continue to provide a few more highlights from the suppliers we spoke to at the 2013 DESIGN WEST / Embedded Systems Conference that was held last week in San Jose.

Small Form Factor Motherboards: At the VersaLogic booth we were shown several of their new small form factor motherboards, including the EBX format Copperhead that is powered by an Intel i7 processor and can support up to 3 independent displays. We also saw their COM Express Mini format Falcon and EPIC format Iguana that are powered by Intel Atom processors. The Iguana boards have a Mini PCIe card socket that allows an OEM to round out its configuration with a wide array of connectivity, storage, and other options. All of the Versalogic products we saw at the show were designed for extremely high reliability in operating temperatures that extend from -40C to +85C, and many of them can be ordered in Class 3 assembly versions for mission critical applications.

Computers-on-Modules (COMs): At the congatec booth we saw the variety of COM product lines they offer including Qseven, COM Express, ETX, and XTX. If customers require high power COMs in passive cooling configurations, congatec has patented spring loaded heatspreader thermal interfaces that pull heat away from chipset components and transfer it to the edge of the module. Depending on the OEM application, many of the congatec Qseven products can be ordered with x86 processors from AMD and Intel or ARM processors from Freescale.

Development Platforms: At the ST Micro booth we visited with Ayla Networks who were demonstrating their proof-of-concept secure M2M cloud connectivity solutions with the STM32 F3 evaluation platforms representing connectivity targets. We expect to hear more from Ayla in the future, and you will likely be reading about them in our blog. At the Texas Instruments booth we were shown the new BeagleBoard Black open-source development platform. This impressive unit sells for only $45, and has a 1 GHz ARM A8 processor, 512MB of DDR3 RAM memory, and an on-board HDMI. The BeagleBoard can be expanded for multiple applications by using BeagleBone “capes”. There were multiple applications highlighted, including a remotely controlled electro-mechanical spider that had been fabricated using 3D printed parts.

Ultra Low Power MCUs: We noted that ST Micro had won an EE Times / EDN ACE Award for its Fully-Depleted Silicon-on-Insulator (FD-SOI) technology that allows devices to run using 20 – 50% less power. On a similar note, Renesas was demonstrating the power sipping ability of its RX111 group of MCUs that can wake up in 4.8us from a sleep mode, where it only consumes 350nA. In addition, the RX111 has 6 safety functions to verify/ensure that the device and supporting circuitry are working properly.

Industrial SATA III SSD: The VDC team met with Innodisc and learned about their new SATA III line of Flash Storage Products targeted at embedded applications in the industrial market.  These Innodisc products use arrays of lower-cost Multi-Layer Cell (MLC) memory chips to duplicate Single-Layer Cell performance and reliability at a significantly lower price point.

Embedded Certainty: At the XMOS booth we learned about their series of MCUs that were designed to remove uncertainty from critical applications. This means that programs can be developed where the signal timing is completely predictable. Roughly stated, the XMOS MCU have removed I/O layers and other elements that create signal latency or processing variables that can affect timing. There are many applications such as digital audio and collision avoidance that can benefit from MCUs with predictable timing.

Embedded Motherboards: As the VDC EHW team is currently in the midst of our supply-side coverage of the embedded motherboard market, we were particularly interested in seeing the two new SuperMicro X9DR products. Both of these units were extremely powerful and can be used in applications that require power-efficient processing of high volumes of data. SuperMicro also sells its products into the traditional IT space and, as such, has some system options that can be attractive to OEMs supporting mission critical applications. These include built in Uninterruptible Power Supply and automatic flash memory backup of system RAM and CPU processes in the event of a power outage.

Stay tuned for part 3 where we will wrap up our observations from the 2013 Design West show. 

M2M can Authenticate Actionable Intelligence for Hospitality Industry

During a recent conversation at VDC, the topic turned to a problem often seen by users of travel and restaurant advisor sites. It is often difficult to determine legitimate user ratings from those that were created by employees or competitors of the venue in question. We believe that Google, Apple, or another industry participant could mitigate this problem by using an M2M architecture solution. Here is how it would work:

 

The persons who would want to be authenticated reviewers of hospitality venues would register at a cloud-based site. The mobile devices they carry would be linked to their profile. The reviewers would have to opt-in to allow GPS and Wi-Fi location based tracking and logging.

If the reviewer wishes to submit a rating for a venue they log into the cloud-based application. The cloud based application verifies that the location data from the reviewer’s mobile device matches the pattern of a legitimate customer. If the verification passes, the rating and commentary are accepted. The identity of the reviewer could be obscured if needed but, if their reviews were found to be questionable, they could be disqualified in the future.  It’s not foolproof, but it’s better than what many of these rating sites have today.

A Big Week for Telecom in M2M - 2 Key Announcements

This week there were several interesting developments related to M2M and cloud services. The first was the announcement of an agreement between IBM and AT&T that effectively provides a comprehensive connectivity and cloud services package. Why is this deal significant? The primary answer is security. If there is one main barrier to M2M adoption, it is the concept of moving sensitive data through the internet. The other related barrier is about exposing a machine or thing to outside access through that same path.  One example of security loopholes would be a “man in the middle” access and this is highlighted in the recent US House Intelligence Committee report looking at the entry of Huawei and ZTE into the US market. That report examined the risk that data passing through the Huawei or ZTE equipment could be remotely disrupted by and/or hi-jacked to a 3^rd party which, in this case, would be the Chinese military.

 In a recent VDC survey on the embedded cloud that examined the use of edge computing to support M2M connectivity, we found that security was cited as challenge to implementation by 25 – 30% of respondents. This was significant when we considered that, in addition to the typical edge processing roles of communication, data aggregation and pre-processing, 49% of IT and End-Users surveyed would include firewall/Virtual Private Networking functions in those units. In other words, you can never have too much security.

M2M connectivity often involves cloud based resources and after the connection from the machine to the edge of the network is solved, you then have to make the connection to the cloud. The IBM & AT&T collaboration will give potential customers a secure private connection to the IBM cloud services. The customers will get an integrated solution without having to deal with two completely separate organizations to complete the implementation. This is of huge value to the M2M market because many of the machines/things being connected are mobile and this places extra layers of wireless connectivity in order to complete the M2M solution.

Speaking of mobile equipment connectivity, this brings us to a second notable announcement from this week. On Tuesday, we saw that Digi International had announced collaboration with Deutsche Telecom to enhance their M2M solution portfolio. As part of this agreement, Digi will be the first to integrate DT industrial grade SIM cards into their connectivity products. This removes many layers of complexity in a mobile M2M project as the complete solutions can likely be installed directly out of the box and automatically connect to the Digi cloud services using the DT cellular network.

So, in summary, we see two very similar partnership announcements that are changing the M2M ecosystem in ways that will accelerate the pace of m2M connectivity. This is precisely one the theme of the VDC FastForward: Insights for Leaders report on Securing Your Place in the Evolving Internet of Things Ecosystem that is due to publish shortly. In 4Q of this year, the Embedded Hardware practice will also be covering the OEM perspective of M2M and the Internet of Things through our Voice of the Customer service.

Media Processing: Unseen but Powerful

As I watched yesterday’s SuperBowl, I was painfully aware of each moment of the Patriots’ loss to New York. One thing of which I was blissfully unaware at the time was how much media processing was going on to bring me the crystal clear image on the massive HDTV in front of me. Media processing is what enables on-field action captured by NBC network’s cameras to be then consumed on a high-def television, or ultrabook, or smart phone, or tablet, etc. 

With the surge in connected devices, and in particular connect devices that can view video, the need for media processing is expected to increase dramatically over the coming years.  Not only that, but users are increasingly generating video traffic using handheld devices like smart phones. As the consumption and creation of video ramps up the flow of digital video traffic, the processors performing media processing have expanded from the traditional DSPs to include CPUs, GPUs, SoCs, etc. 

VDC will explore media processing in its upcoming embedded processor market research.  In May 2012, VDC will publish its Track 2, Volume 2: DSPs, GPUs, & Media Processors will take a deep dive into this technology-rich and fast-growing market. We will be reaching out to the leading vendors in each of these markets to learn their perspectives. If you wish to participate in our embedded processor research, please contact me:

Jonathan Hastings, Analyst, Embedded Group, Email: [email protected]

Channels of Distribution Expand as Computers-on-Modules Market Grows

Our Embedded Hardware and Systems research team recently published critical global findings of the rapidly expanding Computers-on-Modules (COMs) market.  Based on our analysis, COMs dollar volume shipments over the 2009 - 2014 forecast period are projected to grow at a rate faster than nearly all embedded hardware technologies which VDC analyzes.  In fact, based on extensive supply-side and demand-side primary research, we are forecasting the total global COMs market size will reach just over $910 million by 2014, and display a compound annual growth rate (CAGR) exceeding 23%.  

Among the clear drivers of COM shipment growth are (1) the system expansion and application-specific customization capabilities of the technology, and (2) the relatively low power consumption and small form-factor dimensions the technology possesses.

Another influential factor is time-to-market advantages OEMs, SIs, and independent hardware designers gain, as this audience continues to seek significant reduction in development time of embedded systems in industrial and commercial applications when utilizing COMs.                                    

From the channels of distribution perspective, our research suggests the marketing and sales of COMS will begin to fragment somewhat, as suppliers look to add more third-party distributors, VARs, and other resellers in an effort to capitalize on the expanding COMs market. 

In summary, VDC believes as the complexity of embedded hardware design and implementation accelerates, an ever increasing number of vendors - third-party distributors, and VARs, etc. - will continue migrating into the embedded space, with COMs and COMs-based solutions.  In fact, many large distributors have already begun offering development kits online, as well as offering other support services, that will help enable a more rapid solution development cycle.

Let us know your thoughts about global COMs market opportunities and how the channel will impact pricing, availability, and hardware and software integration.