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Product category: Recruitment, Reports and Resources
News Release from: Venture Development Corp
Edited by the Electronicstalk Editorial Team on 08 September 2006

Tools vendors face growing competition

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Research confirms that the market for pure play unbundled software development tools continues to be influenced by the viability and penetration of open source tools.

Recently published research by Venture Development Corporation (VDC) confirms that the market for pure play unbundled software development tools continues to be influenced by the viability and penetration of open source tools, the migration to commercial operating systems, and the efforts from vendors in many adjacent markets to bring more comprehensive, integrated solutions to their customers VDC defines pure play unbundled (or stand-alone) software development tools as compilers, debuggers, graphical user interfaces, and other related tools sold separately from the operating system or other products

VDC continues to see the market impacted by the effort of all participants within the embedded systems market to deliver added value and provide customers with bundled development tools that are more tightly integrated with their own core offerings.

VDC's recently released study on the software development tools market (which includes other categories like semiconductor IP and debugging hardware interfaces) predicts moderate growth through 2008.

However, its research indicates that the segment specifically attributed to pure play unbundled software development tools is expected to grow at a combined annual rate of only 0.6% per year, due in large part to competitive pressures and the continued migration of leading operating system vendors to the bundled tools market.

"The market for embedded stand-alone software development tools continues to demonstrate significant transformation, as current market participants have adapted to customer demands, and complementary solution providers continue to offer alternatives to the use of stand-alone environments", according to Matt Volckmann, Senior Analyst within VDC's Embedded Software Practice.

VDC expects that only those vendors that are flexible enough to adapt to new market demands will ultimately survive these effects.

"Embedded software development tool suppliers will continue to be pushed by the market to provide complete solutions that span the embedded development lifecycle", says Volckmann.

"VDC anticipates that vendors without a distinctive value proposition or a clear strategy for migrating and integrating with other parts of the embedded device development process will find more limited opportunities going forward".

VDC has observed this trend for some time within the embedded development tools market.

In 2002, VDC wrote a piece entitled "Last one out turn off the lights" in reference to the number of stand-alone tools suppliers migrating to other market segments or being acquired by operating system, semiconductor and EDA vendors.

Today, the vendors that remain within the unbundled tools market face even greater competition from these and other areas of the embedded software landscape.

The advancement of open software is also playing a critical role in defining the changing dynamics of the market.

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