XML's biggest advantage is that it provides developers with a tool that concisely and unambiguously defines the format of data records. If a company decides it is in its best interests to have devices built by other companies communicate with its own devices, it can support that capability by publishing its schemas. Since schemas are interpreted by software, human errors in interpretation are eliminated.
Another advantage to XML is that it is a required building block for the Simple Object Access Protocol (Soap) and Universal Plug and Play (uPnP). Any device that will use uPnP to access or provide network services must support XML. XML is also used in many B2B applications and is therefore desirable for such embedded devices as POS terminals and inventory control scanners that need to communicate with B2B systems. There are also a large number of free tools available for XML, including many full-featured parsers.
XML's biggest disadvantage is that its parsers tend to be very large, although the large memory footprint of XML parsers may be reduced to a reasonable size by eliminating unneeded features.
The larger size of XML data records may be an issue for some applications. This can be dealt with by compressing the data before transmitting it or writing it to disk. There are many public domain compression algorithms.