Innovation, Emerging Markets to drive Embedded Systems R&D sourcing: NASSCOM - Zinnov Study

National Association of Software and Services Companies in collaboration with Zinnov Management Consulting, a leading globalization advisory firm, today released the NASSCOM – Zinnov study on “Embedded Systems Opportunity: Powering Indian IT up the Value Chain”. The report gives a detailed analysis of the current embedded systems market landscape, emerging technology trends & opportunities, and new markets-verticals that are likely to shape the future of the industry. It is a first of its kind report that analyses embedded systems across verticals – Automation, Energy & Power, Healthcare, Transportation, Aerospace & Defense, automotive, Telecom and Consumer electronics.

Commenting on the launch of the study, Mr. Som Mittal, President NASSCOM said- “Embedded Systems Development centers in India have evolved from cost-leveraged testing facilities to value-adding design hubs. India now has an established base for R&D and can leapfrog both for international and domestic consumption. Showcasing opportunities in untapped and existing verticals will help the industry create alliances, partnerships and new product offerings. The launch of this report is recognition of India’s enhanced focus in the global embedded systems technology services market.”

Talking about the study, Mr. Pari Natarajan, CEO, Zinnov Management Consulting said “With the launch of the Embedded Systems Opportunity report in collaboration with NASSCOM, we hope to bring out a holistic perspective on the changing industry dynamics and emerging trends in this segment. The study is a result of our global thought leadership, real world survey of leading industry practitioners as well as research and interviews with various facilitators of the industry. The Embedded Systems market in India has the potential to triple in size to about USD 14.4 Billion in 2015 from USD 4.95 Billion in 2009. And needless to say, there is a paradigm shift required in the mindsets and business models to tap this opportunity”.

As per the study, the total addressable embedded system R&D global opportunity is expected to reach USD 89 billion by 2015. This is characterized by mega trends like

• Embedded systems component is increasing across a wide range of devices – key to even industries such as Automotive and Aviation. On an average, electronics constitute 35% of an average car’s cost
• Standards-based connectivity, open source platforms, inter-operability and hardware standardization, adoption of green technologies are creating yet untapped opportunities
• Emerging markets are likely to grow at double the pace, as OEMs are also shifting from traditional product sale centric business models to service oriented business models.
• The focus on end-to-end product development by OEMs is also driving the growth and opportunity

Highlighting the India potential, the study states that over the past few years embedded systems development centers in India have focused on value addition, apart from the cost and talent leverage that India provides. Currently, India’s revenue from embedded systems development is almost USD 5 billion, employing about 110,000 professionals. US and Europe have been the key markets. The industry continues to look at new areas of interest where there is high propensity to innovate and achieve non linear growth

While India is well positioned to capitalize on the addressable opportunity in the embedded space; there are some areas of concern like the absence of a mature electronic prototyping and electronic manufacturing ecosystem, restrictive hardware import laws, inadequate infrastructure for testing and certifications, and lack of industry specific talent which need to be addressed for India to successfully tap into this growing market.

About NASSCOM

NASSCOM® is the premier trade body and the chamber of commerce of the IT-BPO industries in India. NASSCOM is a global trade body with more than 1200 members, which include both Indian and multinational companies that have a presence in India. NASSCOM's member and associate member companies are broadly in the business of software development, software services, software products, consulting services, BPO services, e-commerce & web services, engineering services off-shoring and animation and gaming. NASSCOM’s membership base constitutes over 95% of the industry revenues in India and employs over 2.24 million professionals.

About Zinnov Management Consulting

Founded in 2002, Zinnov – meaning Zeal in Innovation – is a leading management consulting company providing advisory services in the area of Global Sourcing, Emerging Markets Expansion and Human Capital Optimization to Fortune 1000 and reputed SMB companies. Zinnov works collectively with clients to tackle prevailing organizational challenges by analyzing the changing dynamics, improving performance, and building institutional capability. The services delivered to its clients through advanced reasoning and analytical techniques, provides solutions that help in integrating organizational vision, business definition and processes.