Recently published research by Venture Development Corporation (VDC) indicates that Original Equipment Manufacturers’ (OEMs’) previous development projects using no formal or in-house developed OSs are targets for migration to commercial OS platforms. According to Stephen Balacco, Director of VDC’s Embedded Software Practice, “New development projects represent an opportunity for commercial embedded OS suppliers to capture these OEMs as they look to address increasing functionality that incorporates more powerful silicon and requires evaluation of competing alternative commercial solutions, rather than continue to use in-house developed and or no formal OS environments.”
While this scenario offers opportunities to commercial suppliers, there is reason for commercial suppliers to be cautious based on survey respondents’ future expectations as development teams look to continue to evaluate their device software requirements and weigh options that include the migration to a Linux distribution. According to Balacco, “This trend could continue to put pressure on commercial OS suppliers’ and their business models as OEMs consider the growing sophistication of publicly available Linux solutions and leverage the perceived benefits in terms of source code availability, reduced costs, and community support as an alternative to continuing to use a commercial OS in future device development projects.”
From VDC’s perspective, the growing sophistication of embedded devices intensifies competition not only between commercial suppliers, but also in the internal research and development groups within OEMs, which many market players still view as their main competition. We expect increasing innovation around hybrid business models as a means to blend the best of both worlds – open source and proprietary – as suppliers continue to adapt and drive their technology innovation through a community at large, increase brand name recognition, and pull through other complementary commercial software product solutions.
Venture Development Corporation (VDC) is an independent technology market research and strategy consulting firm that specializes in a number of datacom/telecom, component, industrial, retail automation, RFID, AIDC, embedded, and defense markets. VDC has been operating since 1971, when graduates of the Harvard Business School and Massachusetts Institute of Technology founded the firm. Today, we employ a talented collection of analysts and consultants who offer a rare combination of expertise in the market research process; experience in technology product and program management; and formal training in engineering and marketing. VDC’s clients include thousands of the largest and fastest-growing technology suppliers in the world and the most successful investors participating in the markets we cover.