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An Analysis of the Embedded Software Industry: How it is Fulfilling the Demand for Connectivity and New Services?

Embedded software November 16, 2021

An Analysis of the Embedded Software Industry: How it is Fulfilling the Demand for Connectivity and New Services?
Kishor Venkatesh R

Content Developer

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Embedded Software Services: USD 20 Bn Deals Ready!

  • Advancements in the IoT, Artificial Intelligence (AI), and machine learning (MI) are anticipated to increase the growth of embedded software.
  • Increasing R&D initiatives by Automotive OEMs toward ADAS and self-driving cars are expected to spur the industry growth.
  • Large-scale and complex industries have adopted embedded systems to improve productivity and manufacture intelligent products.
  • Service providers can capture opportunities in Fleet Management, Performance Monitoring, Mobile Computing, Smart Wearables, and Personalised Customer Experience.

Download the full report to identify and micro-target USD 20 Bn worth of deals in Embedded Software and explore emerging trends, challenges, and focus areas for 2023.

Surging demand for smart devices is positively impacting the embedded software markets.

  • It is majorly used to develop ICs and microcontrollers and provides end-users with supplementary entertainment and communication features.
  • Its implementation in various real-time applications will propel demand, including the development of real-time operating systems (RTOS) for hybrid and electric vehicles. It will render safety to end-users by providing information to evade accidents while driving.
  • Its ability to identify critical and idle processes can help the energy and uility sector to allocate power accordingly. They are also improving operational efficiency and enabling dynamic pricing.
  • While telecom industry will increase networking capabilities, large and complex industries will use this software to improve productivity, manufacture intelligent products, and cut production costs.
  • Additionally, the healthcare sector is portraying moderate growth that can be attributed to the rising need for portable medical devices.

Furthermore, embedded software can accomplish complex tasks allotted to control systems and those placed on mechatronics products.

Although uncertain delivery times and security issues may challenge growth in the industry, the advent of energy-efficient systems accompanied by an escalating number of M&As may offer growth opportunities over the forecast period.

Trends Enhancing the Global Embedded Software Industry

The embedded software market is slated to reach a valuation of USD 21.5 Bn by 2027. The rapid adoption of IIoT to optimize and automate industrial operations will boost growth.

We must note that major companies are striking deals to develop advanced IoT solutions for industrial applications. In 2021, Orange partnered with STMicroelectronics, LACROIX, and Sierra Wireless to create an IoT continuum and accelerate IoT deployment across several industry verticals in Europe.

Trends expediting the global embedded software industry include:

Support the development of electric/autonomous vehicles and the medical equipment market

The rising demand for autonomous vehicles and electric vehicles will expand the industry in the coming years. The rise of connected cars has encouraged automotive companies to strengthen their expertise in embedded software design. It enables them to provide connectivity throughout every touchpoint, allowing the expansion of their product offerings.

During the 2020 pandemic, the need for ventilators and other advanced medical equipment rapidly increased. The pandemic led to a significant surge in the adoption of embedded software components to develop modern medical equipment and boost the overall market outlook over the forecast spell.

A focus on preemptive scheduling in modern operating systems

The embedded software market demand from the RTOS segment will exhibit a high growth rate until 2027 as it can support preemptive scheduling. While simplifying the software development, this software can schedule tasks effectively based on priority and ensure multitasking to facilitate prompt response to various events.

Meanwhile, a General-purpose operating system (GPOS) will hold a considerable market share over the forecast spell, attributable to the growing number of market participants that offer GPOS-integrated software.

Escalating deployment of special-purpose hardware

Based on function, the standalone system segment is anticipated to register remarkable revenue by 2027, which can be credited to strong demand for special-purpose hardware like field-programmable gate arrays (FPGAs) and MCUs (microcontroller units).

The mobile system segment accounted for over 15% of the embedded software market share in 2020. It is projected to exhibit a CAGR of 8% until 2027 due to the adoption of mobile devices across industries and enterprises, to remotely and effectively handle operations.

The consumer electronics segment held a market share of over 20% in 2020 and is poised to depict an 8% CAGR through 2027, given the rising consumption of electronic devices. These include smartphones, laptops, smart TVs, and smartwatches based on Android, Linux, and other OS.

The evolution of AI/IoT and the industry’s growth in emerging countries will bolster further segmental expansion.

A focus on industrial automation and digitalization

The European embedded software industry is expected to record a CAGR of 6% until 2027, considering the transition to Industry 4.0 to support digital transformation and automation. The rise in software applications will boost the delivery of efficient, improved, and competitive products in the region.

Also, North America is emerging as a lucrative revenue pocket for the market until 2027, owing to the escalating number of startups that provide multiple software solutions while deploying special-purpose hardware equipment.

Key embedded software industry players include Microsoft, IBM, Intel, HCL Technologies, Texas, Toshiba, National Instruments, Qualcomm, and Renesas. They are using M&As and launching innovative products to expand their geographical footprint and product offerings.

Case in point, in June 2021, Renasus Electronics Corporation extended support to Microsoft Azure RTOS embedded development suite to customers using its 32-bit MCU families to boost secure embedded IoT development.

In essence, increasing embedded software deployment in automotive and electronic devices to control and access data and the significant role of RTOS in embedded systems will amplify the need for embedded software architecture in the foreseeable future.

Draup conducted a comprehensive analysis of the Indian embedded software industry market. Our report details the market overview, investments, and key players in the market, along with key initiatives and trends.

Draup for Sales leverages data from its custom machine learning models to extract actionable insights about key players in any industry that the sales teams can use to organize their pitch accordingly.

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