Allen, in your reply 225 you referred to WIND's plentiful resources
and MWAR's scarce resources. In light of your view that the embedded
market may turn into a winner-take-all proposition I decided to take a
quick look at the relative resources and expenditures of the three
main contestants, i.e. WIND,INTS and MWAR. Although this is a crude
way to evaluate the comparative strengths of the companies it still
helps me to put this contest in perspective. Here are the data which I
selected.
WIND INTS MWAR
--------- --------- ---------
fiscal year ended: 1/96 2/96 3/96
EMPLOYEES (at end of fiscal year):
sales & marketing 112 128 59
product devel. & Eng. 63 146 101
mgt., finance, admin. 33 40 50
--- --- ---
total 208 314 210
EXPENDITURES ($mil, 96 fiscal year):
S&M 17.9 27.2 8.4
R&D 5.5 11.4 5.0
CASH & EQUIV. ($mil, recent qtr.): 65 52 12
Taken at face value PD&E personnel of 101 at MWAR vs. 63 at WIND would
seem to give MWAR a decided advantage in technical resources.
Something goes tilt, though, when considering R&D expenditures along
with headcount. It would appear that MWAR has somehow found an
inexpensive pool of engineers not available to WIND and INTS. The
ratio of S&M headcount to R&D headcount makes me suspect that MWAR is
counting people as being in Engineering that are considered sales
and customer support at WIND and INTS.
Making comparisons with the INTS data is difficult since INTS is not a
pure embedded play. They also have a significant design automation
software business (MATRIX). Unfortunately, they do not break out their
sectors. This does not stop them from claiming that they are almost
twice the size of their nearest embedded competitor, presumably WIND.
Just judging by the above numbers WIND would not appear to have an
obvious advantage in resources over the other two. There are a great
many other important considerations such as technology, product
positioning, strategy, portability, partnerships, etc. which you have
covered in previous postings which suggest that WIND is likely to
attain the largest market share. I expect that they will. Still it is
difficult to believe that WIND will ever be able to dominate embedded
computing in the same way that MSFT dominates the desktop. All three
companies are expanding aggressively and it will be very difficult for
any of them to dislodge another once a customer relationship has been
in place for a while. Actually, I hope that this conclusion is wrong
since I have a much larger position in WIND than INTS.
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