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Many organizations have started to use agile development processes to speed up the development cycle and to improve the ability of the company in reacting to changing requirements. Adopting agile practices may happen as a revolution where all old practices are removed or as a more gradual process. In this paper, we discuss lessons learnt in two agile transition processes. Based on our experience, agile processes can be used in embedded software development for products. The challenges include the varying size of user requirements, the role of system requirements, and architecturally significant requirements. It is difficult for large organizations to be agile. Work allocation for a large number of different teams with different competencies tends to decrease speed, and increase the role of design and management. We conclude that agile development in this context needs very skilled developers and has to be a combination of new and old practices.