Archive for February, 2003

The Long Winter

Saturday, February 15th, 2003 Michael Barr

The current state of the embedded systems industry reminds me of a song and a movie, one with a positive connotation the other negative.

Despite the current pullback, all the long term trends point toward steep growth for the embedded industry (and technology in general). The simple fact is that more than 99% of the processors manufactured each year are deployed in embedded and real-time applications. And the numbers of processors coming off production lines is projected to double easily by 2010.

Looking ahead a few years, all I can see is a world with many more embedded devices, automated control systems, and other nifty gadgets of the sort we create. How many products won’t have at least one CPU inside by 2010? So many processors, so little time! And far too few hardware designers and embedded programmers, at least here in the U.S., to bring all of them to market. Ahh, “The Future’s So Bright”… Particularly for those with our sort of specialized skills, as well as for companies offering tools and components that make the work more efficient.

So why is the current downturn hitting the embedded industry so hard? For example, why are many more embedded developers out of work now than at any previous time? And what’s happened to the previously rapidly expanding markets for ICs, development tools, and real-time operating systems?

I believe we’ve been hit by a double whammy: the combination of a normal economic downturn and a retrenchment from overinvestment in technology. Hence, we’ve got buried twice as deeply as we should have.

At the end of the last decade, embedded systems growth got a bit ahead of itself, primarily in two areas: telecom and Internet. On the telecom side, too many competitors were each spending too much money in a race for wireless and Internet customers. Each believed they would see a huge ROI if only they could build their own infrastructure bigger and faster, so they kept spending; few foresaw that the total capacity being put into place would result in a huge oversupply, which it now has.

Simultaneously, the growth of Internet users, uses, and sites suggested huge opportunities for new ventures. Some of these focused on developing new “Internet appliances”; many more on connecting previously-unconnected systems via TCP/IP. A fair number of these ventures were, unfortunately, spectacular failures, and the term Internet appliance has even come to somewhat represent that collective failure (though “connectivity” clearly lives on).

Both the economy and past overinvestment will eventually correct themselves. Meanwhile, though, it’s February. And somewhat like Bill Murray’s character in the 1993 film “Groundhog Day,” I’m wondering if this year’s predictions of renewed economic growth in 2003 are any more likely to come true than those made last Groundhog Day.

It may still be some time before we can dig ourselves out from the current economic weakness, but it’s hard to argue against betting on the long-term future of embedded systems. Whether it’s in the automotive, consumer electronics, medical, military, aerospace, or telecom sector, the growth in processor inclusion is bound to return; hopefully with a vengeance. Meanwhile, you’ll excuse me while I look for my shades.