The constantly increasing concurrency, complexity, and risks associated with the industrial development of real-time embedded computer systems has been approached in different ways in recent years. In Esprit project no. EP5570, called IPTES, a methodology and a supporting environment to support the Boehm's spiral process are being developed. The prototyping environment will enable the specification, development, and verification of executable system models so that different parts of the system may represent different modeling levels and yet can be executed as a total system. Concurrent engineering problems in connection with multi-supplier, distributed software development are also addressed in the IPTES environment. In the IPTES project the concept of heterogeneous prototyping is proposed as a solution. Each of the development teams may use relatively abstract models of the other parts of the systems as a testbed (environment model) for their own part, yet they can proceed developing their own part full speed by means of advancing the maturity of their part to the next abstraction level(s). The IPTES environment provides a set of tools to help in the process of creating, analyzing, and testing distributed heterogeneous prototypes.