With a worldwide market estimated at $21 billion, embedded software represents "a huge opportunity for Indian companies," said Arun Kumar, chairman of India's National Association of Software and Service Companies (Nasscom).

Telecommunications, computing and datacom applications account for 34 percent of the world's embedded-software market, according to Nasscom. That's followed by consumer electronics (20 percent), industrial automation (19 percent), automotive (10 percent) and office automation (8 percent).

A number of large multinationals, among them Texas Instruments, STMicrolectronics, Motorola, Intel, Cadence Design, Synopsys, Analog Devices and National Semiconductor, have tapped India's established base of experienced programmers to create large design centers employing hundreds of engineers in the country.

"Embedded software offers a huge opportunity for Indian companies," said Kumar. "With software becoming an important source of functionality, enhancement and differentiation in traditionally noncomputing devices such as PDAs, cell phones and consumer electronics, the embedded software and systems market is expected to grow at a 16 percent compounded annual rate in the next three years."

Wipro Ltd. began its work on embedded software years ago when it designed computers from scratch because of import restrictions. It has 20 years of experience in adapting a range of real-time operating systems for embedded systems, implementing protocol stacks and developing device drivers and firmware.

For its part, Sasken Communication Technologies Ltd. earned its software stripes developing complete reference designs for GSM/GPRS/UMTS wireless terminals, which have been licensed to silicon vendors and wireless-device and -terminal manufacturers.

"Companies are looking for design service providers that can develop products quickly and be cost-effective," said Ramesh Emani, chief executive of the embedded and access solutions division of Wipro. "There are very few companies in India which can do a complete product development."

Wipro recently developed a set-top box for a customer that included architecture development, hardware design, embedded software development and testing, Emani said.

"Applicability of embedded systems is increasing in key user industries," said Nasscom's Kumar. "In the automotive sector, for example, major advances such as automatic braking systems, telematics and engine control are all powered by embedded software."

Software will also play a key role as both a technology enabler and a differentiator in such appliances as smart phones, camera phones and PDAs, said Shyam Kodavarthi, general manager of business development at Sasken.

A key challenge is imposed by such limits as memory, Mips and power, Kodavarthi said.

Mistral Software Private Ltd., one of the few companies here that focused on embedded solutions from its start, has developed embedded software and hardware for handheld devices as well as automotive, defense and communication systems. Its expertise is in writing device drivers and board support packages for such real-time operating systems as VxWorks and Nucleus and such embedded operating systems as Embedded Linux, Symbian and PocketPC, said Narayanan Bhattathiripad, vice president of Mistral's embedded software division.

Startups like Ittiam Systems focus on embedded systems for digital signal processing. "We estimate the market for DSP-based embedded systems design to be around $1 billion," said Srini Rajam, chairman and chief executive officer of Ittiam. "The key market segments we address are audio-speech, image video, wireless and wireline."

Several factors make embedded software appealing to Indian companies, Nasscom said. Even as the software content rises in noncomputing platforms, the rapid evolution of hardware requires that applications and tools be ported onto that hardware with each upgrade, calling for significant software input.

Embedded software development constituted "a significant percentage" of the $1.2 billion in revenue India's software industry obtained from the R&D and technology sector in 2001-2002, said Nasscom president Kiran Karnik