Market for intelligent connected devices going from US$1.8 billion to US$4 billion by 2015
Embedded systems opening up new segments and enabling innovation
IT WOULD have been like a scene from a CSI: Kuala Lumpur episode, if they were to ever make such a series: A live fish-eyed view video of a conference room. Just click on a section and a quad-screen view of that area pops up on a window. Zoom in and read the serial number off the identify tag.
Picture this, no puns intended, on a street. A van beats a red light. Grab a copy of the video playback, and zoom in to find out the license plate number. What about a bank that’s just been robbed, or a street corner where a snatch theft took place?
Suspects no longer need to be described as merely “some generic guy of such-and-such ethnic descent.” Faces can be seen clearly and distinctly, unlike those CCTV images you see in newspaper reports on a crime suspect where you hope that that monochrome blur actually matches someone in the real world.
These are the kinds of applications that only digital video surveillance systems can offer, and it’s only been made possible or commercially feasible by advances in embedded technology – systems hardcoded or engineered for specific tasks, but with enough leeway for developers to add in their own innovations.
When we speak about innovation in the ICT (Information and Communications Technology (ICT) context, it’s almost always about developers and programmers in t-shirts and jeans. We tend to forget the other guys: Those in their short-sleeved shirts and slacks and enough pencils in their pockets to put Dilbert to shame.
Surprising when you realize how big and promising the industry is, and how some Malaysian companies are taking advantage of it to develop solutions not just for the local market, but also the regional and even global market.
And it’s an industry that is set to explode as devices need more intelligence and “The Internet of Things” trend continues to spread like wildfire.
Embedded in Malaysia
Microprocessor giant Intel Corp says that the market for intelligent systems -- those enabled with high-performance microprocessors, connectivity and high level operating systems – is set to grow from 19% of all major electronic system unit shipments in 2010 to more than one-third of all systems by 2015.
“Embedded is not a new segment; it’s been there for decades,” says Prakash Mallya (pic), country manager of sales and marketing at Intel Malaysia. “But what is happening today as we speak is that the devices that never used to connect to the Internet, are doing so these days.”
Depending on how you cut your definitions when it comes to embedded systems, “according to IDC, it’s going from US$3-4 billion now to US$15 billion by 2015,” he says. “If you look overall at intelligent connected devices, it’s going from US$1.8 billion to US$4 billion by 2015.”
Prakash expects to see a huge increase in the shipment of non-traditional devices in the next three to four years as connectivity drives people to have much more powerful and intelligent devices.
“These could be point-of-sales (POS) systems, IPTV (Internet Protocol Television) cameras, connected set-top boxes, home security and energy management systems, vehicular technology – you name it.
“All these devices are going to connect to the Net, and will need the horsepower to do so,” he adds.
That’s where Intel hopes to come in, of course. The company established an Intelligent Systems Group in its operations in the northern Malaysian state of Penang in 1992. It started with 12 people, but Intel ISG Penang has now grown to 374 people who are involved in product design and development, as well as platform solutions development.
“The ISG in Intel Penang came out recently with an embedded processor that will be used for in-vehicular entertainment globally,” claims Prakash with some pride.
He is also pumped up about the value-add embedded technology can bring to the Malaysian tech ecosystem.
“The difference between solutions providers in the embedded market, as opposed to PC type solutions vendors, is that each solution is custom built for a specific segment.
“The moment you start custom building for that segment, it means the value addition for that segment locally, on the software interface and services you build on and around it, goes up tremendously,” he says.
Going green with envy
The non-existent CSI episode above came from a demonstration from one of Intel’s partners in the embedded space, Gamma Solution Sdn Bhd, which deals in surveillance systems.
“We started in 2000 started with analog systems, but at around 2008 started getting involved with megapixel or digital surveillance systems,” says its managing director Wan Yat Hon (pic).
Why the transition? Simple: “Analog quality is nowhere near as good as digital,” he says, before proving it with his demonstration.
Wan concedes that digital surveillance systems are four to 10 times more expensive than their analog counterparts, but adds that they make up for that in effectiveness and long-term savings.
“Because it is a demanding application, powerful processors are a must,” he says. “Before the second generation Sandy Bridge processor [from Intel], one quad-core processor server could only manage up to eight megapixel cameras, but now one such server can manage up to 32 cameras.”
This makes a difference with big video surveillance deployments, where customers would need space to house all those servers. With fewer servers, the customer can also save on maintenance and energy, for example.
The security market is an elastic one, Wan notes. “Whether the economy is good or bad, people need security.”
Citing IMS Research figures, he says the global video surveillance market would be worth US$19 billion by 2013. Locally, it is expected to be worth RM450 million (US$141 million) by the end of this year.
And Gamma is well positioned, he believes. “75% of the systems in Malaysia is still analog, but because we know how good the potential market is, Gamma has been aggressively promoting full-HD digital cameras.”
The company does not release its financial figures, but Wan says Gamma’s business grew 30% last year, with its main customer segments being banking, manufacturing, transportation, education and even residences.
The last is a relatively new segment for Gamma, an opportunity further driven by Intel’s new ultra-low-voltage Atom processor [formerly codenamed Cedar].
“Most residential users still in analog, but … with Atom, we can support two to four cameras at around a cost of RM3,000-4,000 [approximately US$1,000] -- just nice for a home,” says Wan. “An analog system for the home would cost only RM2,000, but with just a little extra you get four times the quality.”
But embedded technologies are not only opening up new market opportunities, they are also expanding the horizon for innovation.
For instance, Gamma is integrating POS systems with its video surveillance system to enable retail outlets for inventory management and stock checks. Its system will be used in all the duty-free shops in the Kuala Lumpur International Airport.
Furthermore, some of its customers – including a few malls in Malaysia – are using Gamma systems for both security and “people counting” using Intel motion-detection technology.
“Combine people counting with business analytics, and you can devise special marketing and promotion campaigns according to peak and off-peak traffic,” says Wan, adding that Low Yat Plaza in Kuala Lumpur was doing just that.
Once you confer intelligence on devices, the old way looks positively archaic, which is what Select-TV Solutions Sdn Bhd is finding with the IPTV market. Its chief executive officer C.S. Goh (pic) laments the fact that most operators look at IPTV technology as a way of cramming in as many channels as possible.
“Using IPTV to do what traditional a video broadcaster does is like driving your Ferrari on Jalan Ipoh,” he says, referring to a KL street particularly infamous for its traffic gridlocks.
The company, which won the Prime Minister's "Best of the Best" award in the annual APICTA (Asia Pacific Information Technology Alliance), awards, has seen investments by funds such as Malaysian Venture Capital Berhad and even Intel Capital, the US company’s investment arm.
Select-TV, established in 2000, went through a major restructuring in 2006 to divest its non-core businesses and subsidiaries to focus only on designing and developing IPTV technologies. “We were already on the Intel platform, but had not been using its embedded platforms yet,” says Goh.
That changed two years ago when Select-TV, already a dominant regional player when it came to IPTV systems for the hospitality industry, decided to more fully tackle the home and hospital markets.
“That’s when we started working with Intel on its embedded systems,” says Goh. “You need to work with Intel for technical design specifications – and we got to work with its subsidiaries from all over the world.”
The case for embedded systems is manifold: It brings down the cost, for one. “IPTV is a volume game, so the cost reduction of about 50% is a substantial one,” he adds.
The lifespan of products are much longer in the embedded space as well – seven to nine years and sometimes more, compared with the two- to three-year lifespan of the off-the-shelf PC technology Select-TV had been building on previously.
“My CTO (chief technology officer) is happy – he is not going to spend one year of his life developing technologies and solutions that will last only two years,” says Goh.
The third value-add of working with Intel and its embedded technologies is that the US company has assisted the Malaysian company in opening up new markets in other countries. “They helped us get into Vietnam – now we have a strong business there, growing by 50% a year,” he says, adding that Select-TV, already operating in 11 countries, will be opening a North American office this year as well.
But it is opening up the IPTV market in Malaysia that Goh is really keen on, and he wants to use the nation as a test-bed to roll out an entirely new facet of the industry.
“The IPTV business in Malaysia is at about US$1.5 billion for the whole market, with US$150 million in hospitality,” he says, adding however that with the profusion of services and products available, with telcos and broadcasters all wanting to grab a share, chaos seems to reign.
“This is where embedded technology can help,” he says. “We are moving into other services that allow operators to offer more value to their customers instead of just providing linear channels or live TV.
“With embedded technology, we can provide more interactivity, games and a lot more capability that creates value that customers will not be able to get from incumbents,” he says.
Mosques, a sign of the times
The new vistas that open up with embedded systems sometimes take some getting used to. For instance, digital signage company Eumedia Sdn Bhd, an MSC-Status company like Select-TV, spent the first few years after its formation in 2006 merely “educating the market,” says co-founder Howard Lau.
“Only after our customers started adapting to the concept did we push our products to market,” he says.
With major clients in the oil and gas industry, two years ago Eumedia started engaging with Intel because it wanted to develop lower end retail systems.
“With off-the-shelf PC-type technologies, we encountered problems like lifespan and the way troubleshooting was done,” he says.
Eumedia was founded on the principle that digital signage was not just for advertisers but “every user” – forming the “Eu” in its name, says Lau. With today’s digital signage technology, you can have lots more interaction.
“One of our oil and gas customers is using digital signage screens to communicate live company-wide announcements. The screens are installed all over its offices, and we designed a simple videoconferencing solution on top of it. The employees just go to the screen and use a keypad or microphone to ask questions of their managing director,” he says.
Eumedia also adopted the Intel Audience Impression Metrics Suite (AIM Suite), which can detect the number of viewers or passersby near a screen, and determine their gender and age group using facial recognition technology.
This data can be used in real-time to tailor on-screen content based on the gender of the person, for instance.
“We’re doing a proof-of-concept project with a Singapore-based department store – our system is ready, it just hasn’t been deployed yet,” says Lau.
Its solutions were developed inhouse, and Eumedia is currently building its own community cloud service its customers can use to cut down on their cost. The cloud service will be ready by July, he adds.
Eumedia is also working with the Department of Islamic Development Malaysia (Jabatan Kemajuan Islam Malaysia or Jakim) and various state governments to bring its digital signage technology to mosques, where they can screen prayer times (according to locale), and broadcast the call to prayer and other Islamic content.
“This is a huge market; Malaysia alone has 18,000 mosques,” says Lau, adding that Eumedia is also in discussions with partners in Indonesia and Pakistan, which each has about 600,000 mosques.
All pictures courtesy of Intel