Embedded Software Market Size - By Operating Systems, By Functions, By Application, By Development Approach, Analysis, Share, Growth Forecast, 2025 - 2034

Embedded Software Market Size

The global embedded software market size was valued at USD 20.7 billion in 2024 and is projected to grow at a CAGR of 9.6% between 2025 and 2034. Embedded software is essential in IoT applications as it manages device operations, controls sensors, supports connectivity, and ensures data security.
 

For instance, in smart homes, devices like thermostats, security cameras, and lights use embedded systems to function independently and communicate with other smart devices through cloud platforms or local networks. Similarly, in industrial IoT (IIoT), embedded systems are used to operate machines, collect sensor data, and support predictive maintenance, all of which require reliable software and real-time decision-making.
 

For instance, in October 2024, Analog Devices introduced CodeFusion Studio, a comprehensive embedded software development environment designed to streamline the development process for intelligent edge applications. This new platform is built on Microsoft’s open-source Visual Studio Code and represents Analog Devices' first integrated suite of software and security solutions.
 

Similarly, embedded systems are essential in industrial automation, as they control machinery, manage processes, and collect data from sensors to support decision-making. For example, in a smart factory, embedded software operates robotic arms, automated guided vehicles (AGVs), and machine tools. These systems use embedded software for real-time monitoring and decision-making, ensuring efficient and seamless operations. Additionally, embedded systems are crucial for predictive maintenance, where sensor data from machines is analyzed to predict potential failures, reducing downtime and improving productivity.
 

Embedded Software Market Trends

The embedded software industry is experiencing notable changes due to advancements in technology and evolving industry requirements. A key trend is the growing use of AI and ML in embedded systems. As these devices become more advanced, AI and ML algorithms are being directly integrated, allowing real-time data analysis and decision-making at the edge without relying on cloud computing. This development is particularly important in areas such as autonomous vehicles, industrial automation, and smart consumer devices, where AI-driven decisions improve functionality and efficiency.
 

The demand for low-power and energy-efficient embedded systems is increasing due to the need for sustainable technology and longer battery life in devices such as wearables, IoT sensors, and medical devices. Manufacturers are focusing on creating software that reduces energy use while maintaining performance, which is essential for battery-powered devices. This trend aligns with the growing emphasis on green technology and environmental sustainability, as industries work to lower their carbon footprint and energy consumption.
 

The embedded software market faces a major challenge due to a lack of skilled professionals. Developing embedded systems requires specialized knowledge in both hardware and software. Professionals in this field need to be proficient in real-time operating systems (RTOS), hardware-software integration, low-level programming languages like C/C++, and tools designed for embedded system development. Additionally, with advancements in technologies such as AI, IoT, and edge computing, the demand for engineers with diverse skills has grown significantly. However, the availability of qualified professionals has not kept up with this rising demand.
 

Embedded Software Market Analysis

Based on function, the market is segmented standalone system, real-time system, network system, and mobile system. In 2024, the real-time system segment held a market share of over 36% and is expected to exceed USD 18 billion by 2034. Real-time systems are designed to complete tasks within specific time limits, ensuring predictable and reliable performance. Unlike general-purpose systems, which may encounter delays or unpredictable behavior, real-time systems are essential in applications where timing and precision are critical.
 

For instance, in industrial automation, these systems control machinery and robots to perform accurate actions without delays, preventing production errors, downtime, or accidents. This reliability is especially important in mission-critical sectors.
 

Based on the vehicle, the embedded software market is divided into General Purpose Operating System (GPOS), Real-time Operating System (RTOS), and others. The RTOS segment held around 45.5% of the market share in 2024, due to their ability to execute tasks on time without delays. Unlike GPOS, which are designed for a wide range of uses and do not ensure task completion within specific time limits, RTOS is specifically built to meet strict timing requirements.
 

This makes RTOS the preferred option for embedded systems that need real-time data processing, high reliability, and low latency. These systems are commonly used in critical applications such as automotive safety, industrial automation, aerospace, medical devices, robotics, and telecommunications.
 

North America embedded software market accounted for 35% of the revenue share in 2024, due to its leadership in technological innovation, strong industrial base, growing demand for advanced embedded applications, and a well-established network of software developers, hardware manufacturers, and research institutions. Major technology companies like Intel, Qualcomm, Microsoft, Apple, and Texas Instruments are based in the U.S. These companies drive innovation and develop advanced hardware platforms that rely on complex embedded software solutions.
 

The demand for embedded software in Europe is increasing due to the region's focus on innovation, sustainability, and technological progress. Europe has a strong industrial base, particularly in sectors like automotive, aerospace, industrial automation, consumer electronics, and healthcare, which rely more on embedded systems for advanced features. Additionally, the region is seeing significant growth in areas such as Industry 4.0, smart manufacturing, EVs, and connected devices, all of which require reliable and efficient embedded software solutions.
 

The demand for embedded software market in the APAC region is increasing quickly due to factors such as technological progress, industrial development, growing consumer markets, and the adoption of smart technologies. APAC includes some of the largest and fastest-growing economies globally, such as China, India, Japan, South Korea, and Australia, which are key contributors to the adoption of embedded software. As these countries advance in digital transformation, automation, IoT, EVs, and Industry 4.0, the need for advanced embedded software solutions is rising significantly in sectors like automotive, consumer electronics, telecommunications, industrial automation, and healthcare.
 

Embedded Software Market Share

IBM and Siemens collectively held a substantial market share of over 13% in the embedded software industry in 2024. IBM and Siemens hold a significant share of the embedded software industry due to their expertise in industrial automation, IoT, and enterprise solutions. IBM uses its capabilities in AI, cloud computing, and data analytics to develop advanced embedded software for industries such as healthcare, automotive, and manufacturing. Similarly, Siemens, a leader in Industry 4.0 and smart manufacturing, combines embedded software with advanced automation and industrial IoT systems to meet the increasing demand for connected solutions across various industries.
 

Microsoft and Wind River are enhancing their software platforms to support advanced technologies such as 5G, IoT, and AI, aiming to increase their market share in the embedded software market. Microsoft is integrating its Azure IoT services with embedded systems to simplify the deployment of IoT solutions across various industries. Wind River, recognized for its expertise in RTOS, is focusing on advancements in edge computing, autonomous systems, and safety-critical applications, targeting key sectors like automotive and aerospace. These strategies are helping both companies strengthen their positions in the evolving market.
 

Embedded Software Market Companies

Major players operating in the embedded software industry are:

• Advantech
• AMD
• Analog Devices
• ARM Ltd
• Blackberry
• Green Hills Software
• HCL
• IBM
• Infineon
• Intel
   

Embedded Software Industry News

• In December 2024, Accenture announced its agreement to acquire AOX, a German company specializing in embedded software for the automotive industry. This strategic acquisition aims to bolster Accenture's capabilities in assisting automotive clients as they transition to software-defined vehicles
   
• In August 2024, Codelab chose Wind River Studio Developer to enhance its DevSecOps processes and improve its embedded solutions based on the VxWorks real-time operating system. This selection underscores Codelab's commitment to addressing the complexities of software development for embedded systems, which have become increasingly intricate
   

The embedded software market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Operating Systems

• General Purpose Operating System (GPOS)
  • Windows
  • Linux
  • Android
  • Others 
• Real-time Operating System (RTOS)
  • VxWorks
  • QNX
  • FreeRTOS
  • ARM Mbed
  • Others
• Others

Market, By Functions

• Standalone system
• Real-time system
• Network system
• Mobile system

Market, By Application

• Automotive
• Consumer electronics
• Manufacturing
• Healthcare
• Military & defense
• IT & Telecom
• Others

Market, By Development Approach

• Proprietary software
• Open-source software

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia