The strategic relationship between Northern Telecom and WIND is important for many reasons.
The most obvious reason is that the relationship underscores WIND's total domination of the telecomm/datacomm space. They have dealings with virtually every heavy hitter in the business, including, among many others: 3Com, Bay Networks, Cisco, Newbridge Networks, Lucent, Hughes Network Systems, Qualcomm, Motorola, Obital Sciences and Fore Systems. This deal publicizes that VxWorks is the standard in telephony, making Tornado/VxWorks even more attractive to any company in this business. For example, this agreement should make WIND the vendor of choice also with joint venture partners of Northern Telecom, such as Cabletron and Shiva.
Now let's look deeper at the probable mechanics of the relationship. NT is a $15 billion company with 68,000 employees. That means development projects are managed using hierarchical organizational structures subject to lots of corporate-wide internal rules and regulations. I suspect that a project development team fifty levels down inside the organization is, and always has been, free to pick any RTOS vendor of their choosing - as long as a proper procurement process is followed, resulting in the vendor proposing the least-cost, most efficacious solution. As we have seen from recent postings, Tornado may be accused of many things, but being least cost is not one of them - unless you also include indirect costs, such as efficient use of available engineers. This means the poor blokes at NT probably got fed up having to justify their usual choice (WIND), and finally got the managers to negotiate an overall contract with WIND, enabling any project in the company to select Tornado and bypass burdensome procurement procedures.
Certainly there will be some projects in the company that will insist on using some other RTOS. There always are. Religious attachment to complicated things like RTOSs and their IDEs are unwavering, and will not disappear just because there is now an easier way. But almost all new projects will gravitate to Tornado over time. Most of these projects will be relieved to gain easy access to Tornado/VxWorks, and some will do it because they see the wisdom of capitulating to the will of the company.
Once this process permeates the company, speeded up by the fact that Tornado/VxWorks already has been a popular choice in the company, WIND's entrenchment in NT will be irrevocable. No doubt this is understood by NT and is seen as good. To NT the relationship not only means reduced procurement time, but it also means they can train development engineers to a single, adequate standard, and then assign staff flexibly as needed among projects.
The fact that this deals crystallizes WIND as the RTOS standard bearer in telephony community also is attractive to NT. Picking the mainstream development environment virtually guarantees that the company need never suffer through conversion to yet another OS.
Finally, both WIND and NT win on costs. NT wins because they probably get to count both development seats and run-time units at a more aggregated level than before, enjoying high-volume discounts. WIND wins because they will end up in more NT projects than otherwise, with greatly reduced costs of sales. They both also win because WIND will be able to organize improved support services due to economies of scale and better visibility of future plans and schedules. This kind of relationship is one answer to the cost problems faced by the isolated Boeing employee posted about recently. It is also worth noting that low-volume projects that resist using Tornado/VxWorks will face a difficult cost comparison because unit royalties usually depend on volume.
From the beginning, one theme propounded on this thread was the importance of strategic relationships with large electronics companies like NT. Early on I mistakenly claimed WIND's relationship with HP was strategic, but recanted when I discovered there was no formal, strategic relationship in place with HP, albeit there may as well be one by the way VxWorks ends up in so many HP products. Well, the NT relationship is formal and it is strategic. NT is a huge company whose endorsement probably will be emulated often by companies, Boeing and all other telecom/datacom companies for starters.
Actually, the Adobe agreement also is strategic, although specific to an underlying printer OS, and with a company 1/20 the size of NT. There probably are many other strategic relationships in place by now, but I would wager few of the size and breath of the NT deal.
Allen |
