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
Market Estimates & Forecasts
Long term growth is expected around embedded seivices due to the larger profit margins
- The services market is growing with a 5.7% CAGR over the 2011-2016
- 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
- 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
Note: This is one of over fifty critical takeaways, actionable
observations and recommendations included in the report.
About the Team
Chris Rommel, Vice President.
David Laing, Senior Analyst.
J. Eric Gulliksen, Senior Analyst.
Jonathan Hastings, Analyst.