IoT & Embedded Technology Blog

The Cloud: OPPORTUNITIES AND THREATS FOR EICS SUPPLIERS

The computing world is undergoing another transformation, one that may well change the way many of us live and work with information. This transformation is the rapidly evolving migration to cloud-based applications and services.

As most of you are probably aware, the “cloud” refers to cyberspace, specifically the Internet. Cloud computing finally comprises the realization of Sun Microsystems’ long-term motto, “the network is the computer.” Applications and files can “live” in the cloud, and be accessed by users as needed through such devices as thin clients. Indeed, today, smart phones and tablets, which make extensive use of the cloud, are becoming ubiquitous in consumer space.

A majority of consumers don’t require a high-powered computing system, such as a conventional PC. This group uses computers for little more than email, web browsing, social networking and casual gaming; smart phones and tablets are ideal for this, are far more portable than their PC or laptop predecessors, and often are also less expensive. Because of this there is a great deal of speculation as to whether or not the traditional PC industry can survive in its present form.

It is very clear that smart phones and tablets, with their associated reliance on the cloud, are rapidly penetrating and eroding the traditional personal computing market. PCs and laptops, on the other hand, continue to advance in computing power and storage capability, and may become “overkill” for much home and small office/home office use. This may well have the effect of reducing sales volumes, forcing contraction and consolidation of The PC industry. This, in turn, may lead to an escalation of prices for these devices as volumes fall.

How is this likely to impact embedded space? In recent years, many applications for embedded integrated computer systems (EICSs) have been ported from passive backplane systems to consumer grade desktop PCs because the latter are lower cost. Should PC prices rise, transforming these devices into niche or “boutique” market items, equipment OEMs currently utilizing these may be forced into finding another approach. Those embedded applications which can be effectively migrated to the cloud will do so; these will primarily comprise non-critical applications. The communications vertical is likely to see an increase in demand for passive backplane EICSs as cloud computing becomes more prevalent. Many military applications are not likely to be ported to the “public” cloud for security reasons and because of their mission-critical nature. Some Industrial Automation and Medical applications will also remain with the current approach because of the highly specific nature of their hardware. For example, a CNC machine will often have computing elements distributed throughout it to control specific axis movement, tool selection and feeds and speeds. As another example, an ultrasound machine is basically an imaging computer with a display and sensor attached; it may be more efficient to perform the imaging computations locally. Other applications, however, will move to the cloud, as will a majority of applications in most other verticals.

Thus this evolution to the cloud is a double-edged sword for suppliers of EICSs. There will be opportunities associated with this migration, as the use of consumer grade PCs for embedded applications declines due to a reduction in their cost advantage, and as the need for additional communications infrastructure appears. On the other hand, those EICS applications which are migrated to the cloud will result in a reduction in demand. In this way the cloud is a threat to these suppliers.

In conclusion, it is evident that the cloud will have a profound impact on large segments of the embedded space. It may be that many EICS vendors can only hope to break even, and will only be able to accomplish this through re-targeting their product offerings and marketing efforts to focus on non-migrated applications.


ADDRESS


TWITTER FEED