Newspaper article The Christian Science Monitor

Embedded Software Remains Unheralded, but Growing HIDDEN HIGH-TECH

Newspaper article The Christian Science Monitor

Embedded Software Remains Unheralded, but Growing HIDDEN HIGH-TECH

Article excerpt

DAVID ST. CHARLES, president and chief executive officer of Integrated Systems Inc., sees promise - and corporate profit - in high-tech devices that are hidden from the eye.

Integrated Systems is a market leader in the little-known embedded software industry. The company, based in Santa Clara, Calif., has produced more than 40 consecutive quarters of earnings growth.

Embedded computing systems use special electronic devices that provide instructions for (or "embed") powerful, low-cost microprocessors used in thousands of products. These systems are found in toys, video games, cars, jets, and space satellites.

"The {embedded software} sector is definitely a growing market," says Wendy Rauch, president of Emerging Technologies Group, a Dix Hills, N.Y., market research/consulting firm. There may be as many as 50 key players in the embedded software sector, though many are quite small, Ms. Rauch says. Integrated Systems competitors include Wind River Systems in Alameda, Calif.; QNX Software Systems Ltd. in Kanata, Ontario; Microtec/Ready in Santa Clara, Calif.; and Microware Systems Corp. in Des Moines.

The embedded software sector has been largely ignored by the news media because "it is just highly technical," says Harvey Hindin, vice president of Emerging Technologies Group. "Most software companies do not make the {computer} chip" used to carry the software instructions, Mr. Hindin says. Chips come from companies such as Motorola Inc. in Schaumburg, Ill., and Santa Clara, Calif.-based Intel Corporation. The software is "ported," or made to work, on the chip to perform certain electronic functions. The software in the special electronic device (an EPROM) is like a road map for the chip. Competition within the embedded software industry is based on price, types of applications offered, and speed in getting new applications to market.

Companies are typically small, with annual revenues below $50 million. Worldwide revenues for Integrated Systems, for example, reached $42 million in its most recent fiscal year. Firms are highly specialized. "We link our software to Intel processors," says Robin Oakley, a spokesman for QNX Software Systems Ltd., a privately held firm with annual revenues just under $40 million, in Kanata, Ontario.

"One of our most important specializations is interactive television," says Steve Simpson, marketing director for Microware Systems Corporation in Des Moines. Microware, which is privately held, provides software for advanced set-top boxes and decoders for TV sets, among other things. …

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