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Embedded Systems Integration Services: Emerging Technologies & Critical Trends

Embedded system integration seivices function as a value-add and develop products into usable solutions

Embedded system integration services help bring together disparate hardware and software into a concise package and reduce the time-to-market and total cost of ownership.

These services generally align with the following categories:

  • Professional Services: These services include consulting, selling support, field application engineering, etc. This would include pre-procurement services that help define a project's ultimate direction. This category would include consulting services, technical support, product support, and maintenance revenue.
  • Embedded Platform Integration Services: These services include hardware integration and custom design/manufacture.
  • Managed Services: These services include systems development, deployment, and management. Implementation services would also fall within this category.

Market Estimates & Forecasts

Long term growth is expected around embedded seivices due to the larger profit margins

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  • The services market is growing with a 5.7% CAGR over the 2011-2016 forecast period.
  • The services market is seeing constrained growth in 2012 due to macroeconomic conditions. However, as conditions in the European debt markets stabilize, and the US debt and budgets legislation are resolved after the election, service should exceed 1O.lBillion in 2016.
  • Over the long term, VDC predicts that embedded hardware companies will focus greater resources on services, since this is where better profit margins are available.
  • As much of communications infrastructure is installed in widespread field locations, there will be an increased demand for managed! maintenance services as these help to reduce service costs and downtime.
  • Smart grid and other energy related projects will drive service revenues as countries have to update their older infrastructure to meet the growing demand from customers.
  • BRIC countries are driving growth for infrastructure projects where in India, they recently had huge power outages and Brazil as it prepares to be host to the next summer Olympics.
  • Transportation infrastructure also requires advanced services from embedded suppliers as mission critical applications such as railway signaling have to be highly reliable and that often requires specific product knowledge.

Strategic Issues, Drivers & Trends

An embedded system customer has options for consulting, system selection and solution implementation

From a technical standpoint, cloud computing and virtualization are among the technologies that are driving the need for OEM and embedded services. As a result, OEM5 will increasingly look for suppliers with technical expertise that extends beyond the embedded hardware. Therefore, VDC believes that gaining this expertise internally or through partnerships or acquisitions is imperative.

Note: This is one of over fifty critical takeaways, actionable observations and recommendations included in the report.

About the Team

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Chris Rommel, Vice President.

David Laing, Senior Analyst.

J. Eric Gulliksen, Senior Analyst.

Jonathan Hastings, Analyst.

Table of Contents

Critical Takeaways

  • Page 4: Critical Takeaways On Services Provided to the Embedded/OEM Market
  • Page 5: Critical Takeaways On Services for Transportation, Logistics & Retail Automation
  • Page 6: Critical Takeaways On Managed Services

Implications for Vendors

  • Page 8: VDC offers the following observations and recommendations
  • Page 9: VDC offers the following observations and recommendations
  • Page 10: VDC offers the following observations and recommendations
  • Page 11: VDC offers the following observations and recommendations
  • Page 12: VDC offers the following observations and recommendations
  • Page 13: VDC offers the following observations and recommendations

Scope & Methodology

  • Page 15: Scope
  • Page 16: Methodology

Market Definition & Segmentation

  • Page 18: Segmentation of VDCs CPU Research
  • Page 19: A variety of services characterize the embedded services markets
  • Page 20: In addition to market segmentation, VDC also offers the following embedded hardware glossary of terms
  • Page 21: Definitions for embedded hardware services
  • Page 22: Definitions for Regional Segmentation
  • Page 23: VDC also offers the following embedded vertical market definitions

Market Overview

  • Page 25: Embedded system integration services function as a value-add and develop products into usable solutions
  • Page 26: Different services are typicaNy utilized at a given stage of a products lifecyce, though when a given service is utilized will vary from project to project; Below is a sample services utilization scheme

Strategic Issues, Drivers & Trends

  • Page 28: An embedded system customer has options for consulting, system selection and solution implementation
  • Page 29: System integration service suppliers have many competitive dynamics and relationships to consider
  • Page 30: There are many strategic issues drivers and trends for embedded system suppliers to consider

Market Estimates & Forecasts

  • Page 32: Long term growth is expected around embedded services due to the larger profit margins
  • Page 33: Asia Pacific will grow as macroeconomics slightly hinder EMEA and US markets
  • Page 34: Mobile infrastructure is driving communications and networking; Legacy hardware upgrade is driving IAC
  • Page 35: Demand for managed services will rise as OEMs, suppliers and their customers look to improve uptime and lower costs

Service Provider Relations

  • Page 37: Price is no longer seen by suppliers as being the most valued factor for selecting services
  • Page 38: Communications customers are most willing to pay for integration services

Competitive Analysis & Position

  • Page 40: A range of companies offer OEM I embedded systems related services
  • Page 41: IBM is the leading service provider of consulting services
  • Page 42: IBM is the leading integration services provider currently
  • Page 43: IBM is the leading service provider of implementation services
  • Page 44: A number of companies are expanding their presence in embedded I OEM managed services

Vendor Profiles

  • Page 46: Advantech
  • Page 47: Dell
  • Page 48: Emerson Network Power Embedded Computing
  • Page 49: Hewlett Packard (HP)
  • Page 50: IEI Technology Corporation
  • Page 51: IBM
  • Page 52: Kontron
  • Page 53: Northrop Grumman
  • Page 54: Radisys

LIST OF EXHIBITS

Track 4 Exhibits

  • Exhibit 1: Global Embedded Systems Services Revenue Forecast, 2011-2016
  • Exhibit 2: Americas Embedded Systems Services Revenue Forecast, 2011-2016
  • Exhibit 3: EMEA Embedded Systems Services Revenue Forecast, 2011-2016
  • Exhibit 4: APAC Embedded Systems Services Revenue Forecast, 2011-2016
  • Exhibit 5: Global Embedded Services Revenue Forecast Vertical Market Segmentation 2011 -2013, 2016
  • Exhibit 6: Americas Embedded Services Revenue Forecast Vertical Market Segmentation 2011 -2013, 2016
  • Exhibit 7: EMEA Embedded Services Revenue Forecast Vertical Market Segmentation 2011 -2013, 2016
  • Exhibit 8: APAC Embedded Services Revenue Forecast Vertical Market Segmentation 2011 -2013, 2016
  • Exhibit 9: Service Provider Relations
  • Exhibit 10: Total Services Market Share Estimates
  • Exhibit 11: Consulting Services Market Share Estimates
  • Exhibit 12: Integration Services Market Share Estimates
  • Exhibit 13: Implementation Services Market Share Estimates
  • Exhibit 14: Technical Support! Product Support! Maintenance Services Market Share Estimates
  • Exhibit 15: Managed Services Market Share Estimates
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