Embedded market research report considers labor costs

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Mar. 23, 2007

Venture Development Corporation (VDC) has published a new market research report aimed at sizing total expenditures on embedded software development, including labor costs for software development and testing. The report also considers outsourcing and how globalization might limit market growth over time.

The report is entitled "Total market for embedded software development" (TMESD). It takes a broad market view that considers labor expenditures as part of the total opportunity for software vendors who are able to create products that reduce or replace labor.

Stephen Balacco, director of VDC's embedded software practice, explained, "Spending on development labor is an important piece of the picture. By offering tools that decrease labor-related costs, solution suppliers can potentially capture [the associated] value."

Also considered in the report are global labor rates and outsourcing, which are key to understanding how TMESD will change over time, according to VDC. Balacco stated, "Assuming that the employment of lower cost engineering labor is able to save overall project labor costs, the increased use of outsourced development to lower-wage regions will serve to inhibit the growth of TMESD."

Additionally, the TMESD report estimates embedded software market size by region and vertical market, and looks at "key trends in key embedded software industries," VDC said.

VDC last month released a report that forecast a $6 billion market for embedded hardware by 2010. And, in September it said companies offering "unbundled" software development tools will face market challenges.

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