Military VME market depends increasingly on systems upgrades and technology refresh

SCOTTSDALE, Ariz., 13 Feb. 2008. In 2008 military systems integrators will upgrade existing legacy platforms more than ever before, and VME embedded computers will play a big role, says VME industry expert Ray Alderman.

Requests for price quotes from systems integrators -- better-known as RFQs -- were more common in 2007 than they were in 2006, and "we should see a near doubling of RFQs for more VME legacy products in 2008," says Alderman, executive director of VITA, the open-standards trade association in Scottsdale, Ariz., in a white paper released today entitled 2008 State of the VME Technology Industry.

Most of the RFQs seen in 2008 will be for VME32 and VME64 products (i.e., newer CPUs, faster A/D cards, etc.), Alderman predicts. Still, several reset programs will require hundreds of new chassis and backplane products, he says. In addition, "order sizes of 50 to 100 boards are showing up now with some as high as several hundred. So, I believe that they can anticipate a brisk business."

With this in mind, VME board suppliers must adjust to good business conditions for legacy VME boards, but the orders will be for small volumes, Alderman predicts.

Defense and aerospace continues to be VME's largest market by revenue, Alderman says. Spending on new programs will continue, yet at a relatively low rate as new major military platform programs have been unfunded or funding has been reduced.

"We will see some new technology systems built and shipped in 2008," particularly for the U.S. Army's Future Combat Systems program (FCS)," Alderman says. Even so, "there seems to be a shift in the DOD budget that favors legacy platform refresh over new platform deployment," he points out.

VME suppliers are well advised to keep an eye on military program upgrades and technology insertion of new boards, also known as "resets," Alderman says. "In 2006, the DOD budget allocation for resets was $6 billion. In 2007, that budget was increased to $24 billion and in the present 2008 DOD budget, it is $38 billion. A significant portion of the reset budget is used in electronics."

Overall, the market for VME products will grow about 10 percent in 2008 from the current base of $1 billion, Alderman predicts. To learn more about specific VME Technology, review VITA's VME Technology white paper at www.vita.com/roadmap.html. For other VME information contact VITA online at www.vita.com.

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