Embedded Business

Embedded Economics is extremely important for all OEM businesses. Ultimately the choices made in embedded designs determine the profitability of the enterprise. For this reason, this section of our web site focuses on making money in embedded systems in addition to paying attention to technology.

The key ideas behind making money in SOC embedded products relates to the following issues:

  • Bill of Materials Costs and Negotiation
  • Time to Market
  • Development Costs and Risks
  • Optimal Embedded Systems Software Archtectures
  • Lean Product Development
  • People and Training
  • Product Protection
  • Manufacturing and Testing Costs

Each of these areas will be considered in turn as part of the section on Embedded Economics.  The focus will be on OEM businesses and explaining exactly how all these costs affect the bottom line.

Before you go on though, consider the following major issue in the embedded system business - lack of business knowledge by technical decision makers. In our opinion, this is the single largest problem in OEM organizations where technically sophisticated products are built. By the time that the technical decision maker decides what is best, and can get it implemented within the product development process, even if they have great business sense, often the product is suboptimal.

The reasons for these suboptimal decisions are:

  • lack of time or mind share
  • poor software development estimation
  • lack of inclusive estimates for software  (testing, documentation, mainteance, feature costs)
  • minimal software expertise at the systems level
  • limited understanding of software engineering economics
  • cumbersome business processes

and these limitations are largely driven by the fact that the managers have come from the hardware side of the business because the SOC solutions are very much hardware products as well

All of this makes it more difficult to get a great product to market on time and under budget. The notes here are intended to help managers and developers improve their Embedded Economics smarts and improve profitability.