India Inside

With software becoming an essential component of non-computing devices, the demand for embedded software development is growing at a fast clip. The bulk of this work is being outsourced to India and embedded OS players such as Microsoft and WindRiver are bullish about the domestic market's prospects, says Srikanth R P

	The domestic automotive sector is small but this is a segment with high growth potential Ajit Edlabadkar Country Manager, WindRiver Systems India

The presence of large R&D departments of MNC majors such as Texas Instruments, Intel, Motorola and Cadence coupled with India's increasing prominence as an offshore destination puts India in the right place at the right time for tapping the embedded opportunity. A Nasscom-McKinsey report estimated the worldwide opportunity for embedded software to be valued at $21 billion growing at a CAGR of 16 percent year on year. Currently, Nasscom estimates put the domestic market for embedded software and hardware at around $750 million. Looking at current growth rates, Nasscom estimates that there will be a $2.5 billion opportunity in embedded software and hardware by 2007. This means that apart from indirect references (royalties accruing from embedded work done for global products like cellular phones that are also marketed in India) that vendors such as Microsoft get when Indian ISVs (Independent Software vendors) do global projects, there is also a sizeable domestic opportunity.

Says Rivi Varghese, product manager, Developer Tools, Microsoft India, "Apart from the fact that over 60 percent of the top-tier software product vendors outsource their development work to India, it is also a big consumer market. So we essentially see India both as a software maker and a consumer. The growing Indian participation becomes apparent from the fact that 200 of our 2,000 global partners are based in India." India's prominence as an embedded player can also be gauged as Microsoft's current base of 200 Indian partners was only 40 last year.

Microsoft has identified several high growth areas where it's embedded OS, Windows CE and Windows XP Embedded can play the volume game in India. As the country promises huge volumes, Microsoft is actively involved in working with all the players who can influence a decision in the embedded space. From partners, developers, system integrators, OEMs and even the academic community—Microsoft is pulling out all the stops to make sure its OS is present in every device. The market is huge as an embedded OS can be used in industrial controllers, communication hubs, point of sale terminals and consumer products such as cameras, washing machines and interactive televisions.

The positioning of the embedded OS is clear. While Windows XP Embedded would be used for devices with a minimal user interface, Windows CE would be used for devices that require a rich user interface. Some high growth areas are the IP-based video surveillance market estimated to be a $25 million segment and the set top box market. If policies are passed which favour the set top box market, a market of 40 million homes opens up. Additionally, there are high growth areas such as mobile phones and point of sale terminals.

Says Sunil Sherlekar, head, Service Practice, Embedded Systems, TCS, “For embedded systems, we are concentrating on high growth areas such as telecom, semiconductors, consumer electronics, automotive and industrial automation.” In India, the hugely popular point of sale terminal TVS Sprint developed by TVS Electronics runs Windows XP Embedded. Another example is that of HCL Peripherals which has developed WINBee, a thin client using a combination of Windows CE and Windows XP Embedded.

Wind in the sails

	While 60 percent of the top-tier software product vendors outsource their development work to India, a large consumer market will ensure that there is a big chunk of domestic business Rivi Varghese Product Manager, Developer Tools, Microsoft India

Another major, WindRiver is also seeing huge growth for its real time operating system (RTOS), VxWorks. The company has introduced a flexible licensing model for ensuring that Indian players can afford the embedded OS and related development tools.

Says Ajit Edlabadkar, country manager, WindRiver Systems India, "Clearly, India and China are the biggest growth markets for us. In India, we are seeing an annual growth rate of 40-45 percent. To enable even startups to go on the embedded route, we offer a unique licensing model which is an annual subscription that eliminates huge upfront costs for the customer. This model also gives them the flexibility to move their licenses to a new project or architecture without any additional cost."

WindRiver is seeing growth in sectors such as telecom and the semiconductor industry. The importance of the Indian market can also be seen from the fact that 80 of WindRiver's 200 global partners are from India. Most ISVs develop embedded software for global majors who in turn sell their wares in the Indian market. While there are few ISVs developing applications for devices made specifically for the local market, there are examples which could spur the growth of indigenous devices. For example, Konkan Railways uses the VxWorks real time operating system for a unique anti-collision device to prevent accidents. Hyderabad-based Cygnus Microsystems has used the VxWorks real time operating system for developing networking equipment for the local market. The automotive sector is another major user of embedded software.

Says Ajit Edlabadkar of WindRiver, "The domestic automotive sector is small but this is a segment with good potential. We are talking to major players such as the Tata group for the usage of embedded Linux in car infotainment systems."

Penguin inside

Another big emerging trend is the preference of embedded Linux vis-à-vis proprietary systems. Agrees Ajay Chamania, vice president and head, Embedded Technology Solutions, Patni, "Open source frameworks such as embedded Linux are increasingly becoming popular across domains. Today intelligence is getting built into each and every device and hence the market for embedded software is exploding. While the global market is huge, even the domestic market is big and should be worth around $1 billion with a majority of revenues coming from the telecom space."

Adds V R Venkatesh, vice president, Embedded and Product Engineering group, Wipro Technologies, "We have seen a steady increase in the use of embedded Linux. Going forward, there will be further fragmentation in the embedded OS market with more distributions of embedded Linux in addition to traditional RTOS. With huge support from silicon vendors for embedded Linux, we are seeing even RTOS vendors getting into embedded Linux."

The trend of RTOS vendors getting into embedded Linux can be seen from the fact that WindRiver has entered into an alliance with Red Hat to jointly develop solutions on the Linux platform. For devices which require real time transactions, for example, telecom switches, WindRiver will position its real time OS, Vxworks while for consumer devices such as set top boxes, the company is offering Linux. With most device manufacturers looking at replacing their proprietary OS with standard OSs from companies such as Microsoft, WindRiver and Linux-based vendors, the demand for embedded OSs is bound to be grow as India has the twin advantages of a huge domestic market and a fast growing developer base.

srikanth@expresscomputeronline.com