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Budgetary & Strategic Shifts - Creating Opportunities for Merchant Embedded COTS Systems in Mil/Aero

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VDC believes that the ecosystem for all of Mil/Aero and particularly merchant COTS is unique as compared to other markets in that relationships can be very complicated with respect to customers and competitors. In many cases, the customer can be a competitor to a COTS systems supplier by the result of the make versus buy decision. During this QuickCast, VDC's David Laing discusses Embedded COTS.

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Budgetary & Strategic Shifts - Creating Opportunities for Merchant Embedded COTS Systems in Mil/Aero

  1. 1. Embedded Hardware & Systems Practice QuickCast Budgetary & Strategic Shifts – Creating June 2012 Opportunities for Merchant Embedded COTS Systems in Mil/Aero By: David Laing – Senior Analyst/Program Manager © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  2. 2. Recording Available A full audio recording is available for download at: http://vdcresearch.com/market_research/embedded_hardware/freeresearch.aspx © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  3. 3. About Us Market Intelligence for Technology Vendors & Investors  Direct-Contact Primary Market Research  Deeply Segmented Data  Expert Insights  Validated Results Custom Consulting Services for Your Most Critical Business Decisions  Research-Based Consulting  Transparent Tools & Methodology o Highly Customized Survey Guides & Output Templates o Sophisticated Market Estimate & Forecast Models o Detailed, Flexible Stakeholder Maps & Profiles o Industry Development Scenarios o Market Opportunity Fit Screening, Rating & Ranking © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  4. 4. Our Core Coverage Areas AutoID Embedded Hardware & Systems Embedded Software & Tools Mobile & Wireless © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  5. 5. Ways to Work With UsOur market research is the basis for the many other ways that VDC can help you to grow your business. Our clients rely on us toprovide actionable insights that support their most important strategic initiatives including: corporate developmentprojects, opportunity assessments and lead generation programs. © 2012 VDC Research QuickCast Embedded Hardware & Systems vdcresearch.com
  6. 6. Today’s Speaker David A. B. Laing Senior Analyst/Program Manager, Embedded Hardware & Systems David has joined VDC’s Embedded Hardware Practice after serving for the last two years as a Senior Analyst / Program Manager in the firm’s Industrial Automation and Controls research practice. David is now responsible for supporting VDC’s market research and custom consulting initiatives relative to emerging global opportunities, regional growth strategies, and market intelligence for embedded hardware, systems components, technologies, services, and related applications across multiple vertical markets. Prior to joining VDC Research, David accumulated over 30 years of Semiconductor industry experience working at Teradyne Inc. and its worldwide customers. David held multiple positions in support, engineering, IT and management including project and support product management. David earned an MBA degree (Summa cum Laude) from the F. W. Olin Graduate School of Business at Babson College and BS in Electronic Systems Engineering Technology from Wentworth Institute.For complimentary insights and marketing data: http://blog.vdcresearch.com/embedded_hw/ © 2012 VDC Research QuickCast Embedded Hardware & Systems vdcresearch.com
  7. 7. The Mil/Aero COTS Ecosystem Roles – Merchant SystemsThe market for “Merchant” Embedded COTS systems has many layers of participation with some customers’“Captive” COTS systems competing with merchant systems suppliers as part of the build versus buy equation Prime Contractors / HW Suppliers Lead Systems Embedded Integrators COTS Board Suppliers SW Suppliers Dist/Sales Channels Defense Mil, Aero, D efense, Subcontractors Service Equipment Branch OEMs End Users Processor Suppliers Independent Embedded COTS Systems Systems Suppliers Integrators Distributors, VAR s and other Other Suppliers Channels © 2012 VDC Research QuickCast Embedded Hardware & Systems vdcresearch.com
  8. 8. The Mil/Aero COTS Market – Merchant Systems have Growth Opportunity Total Global Market, COTS Systems, Global Mil/Aero Merchant Merchant & Captive COTS Market Revenue (US Dollars in Millions) (US Dollars in Millions) $2,000 $40,000 $1,905.7 $1,780.0 $1,674.5 $1,584.0 $1,500 $1,435.6 $1,906 $1,780 $1,675 $35,000 $1,325.1 $1,584 $1,436 $1,325 $34,054 $1,000 $33,871 Merchant $33,673 $33,422 Captive $33,124 $32,764 $30,000 $500 $25,000 $0 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  9. 9. Platform Shifts as Military Strategies Change – Creating COTS Opportunities Littoral Combat Ship (LCS) USS Gerald R. Ford Unit Cost $8B - $9B Unit Cost $600M - $700M High Speed Vessel (HSV) Ticonderoga Class Aegis Cruiser Unit Cost ~ $1B Unit Cost ~ $200M © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  10. 10. Platform Shifts as Military Strategies Change – Creating COTS Opportunities RQ-170 F-22 Raptor Unit Cost ~$6M Predator Program Cost $2.4B Unit Cost ~$4M Program Cost ~$66B Boeing – “Phantom Eye” Unit Cost ~ $150M Program Cost Funded by Boeing Unit Cost - TBD © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  11. 11. Platform Shifts as Military Strategies Change – Creating COTS Opportunities M1 Abrams Stryker ~$8.5M Humvee $1.5M  $3M $70K  $220K © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  12. 12. Summary The US Military budget will be under increasing pressure but there will be balancing political forces at work. Expenditures for big ticket items will be reduced and delayed. The merchant COTS market will still grow at a ~ 7.6% CAGR with some architectures being as high as 20%. SWaP initiatives, refurbishments and upgrades will offset COTS revenue lost to cancellations and delays. © 2012 VDC Research QuickCast Embedded Hardware & Systemsvdcresearch.com
  13. 13. Thank You for Attending this VDC QuickCastFor more information please contact: Mike Collette – VP, Sales & Enterprise Accounts info@vdcresearch.com | 508.653.9000 x112 Chris Rommel – Vice President, Embedded Hardware & Software David Laing – Senior Analyst/Program Manager, Embedded Hardware & Systems J. Eric Gulliksen – Senior Analyst, Embedded Hardware & Systems Jonathan Hastings – Analyst, Embedded Hardware & SystemsFor complimentary insights and marketing data: http://blog.vdcresearch.com/embedded_hw/ © 2012 VDC Research QuickCast Embedded Hardware & Systems vdcresearch.com

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