It is nice to see that there are a few posters on this thread who pay attention to The Red Herring when it comes to spotting future Gorillas:
Wind River goes on the defensive against Microsoft.
By Christina Stubbs
Red Herring magazine
From the August 1999 issue
Wind River Systems (Nasdaq: WIND) has ruled the roost in embedded-systems software since it first released its VxWorks operating system in 1987. Red Herring included it in a survey of four companies helping define the post-PC future and also named it one of our top 100 companies of 1999 (see "After the PC," December 1998, and June 1999).
Wind River dominates its market and earned our kudos because it was one of the first companies to realize that much of future computing would take place not on a desktop PC but inside the myriad appliances of everyday life, from traffic signals to alarm clocks. Embedded microprocessors account for nine of every ten chips currently sold, and VxWorks is compatible with more chips -- including chip families from Intel (Nasdaq: INTC), NEC (Nasdaq: NIPNY), Motorola (NYSE: MOT), and ARM Holdings (Nasdaq: ARMHY) -- than any other company's embedded operating system. In addition to the VxWorks operating system, Wind River offers a popular development environment, called Tornado, for embedded applications and assorted other software tools.
Although Wind River maintains a substantial lead over all its rivals -- most notably Microware Systems (Nasdaq: MWAR), Integrated Systems (Nasdaq: INTS), and QNX Software Systems -- it has yet to face Microsoft (Nasdaq: MSFT). But the Redmond behemoth is on the verge of releasing a new version of its Windows CE operating system designed for the embedded-systems market. Making matters worse, after heading the company for five years, Wind River CEO Ronald Abelmann resigned in June. (He remains on the board of directors.) Mr. Abelmann offered no explanation for his departure, but one analyst speculates that Mr. Abelmann, who was interested in selling Wind River, encountered resistance from the company's cofounder and chairman, Jerry Fiddler. Whatever the reason, Wind River is now in a worse position from which to battle Microsoft, points out Richard Piotrowski, an analyst at the brokerage Everen Securities: "The timing of Abelmann's departure is unfortunate, with Microsoft turning up the volume on its embedded-systems marketing message."
Mr. Fiddler is elusive about the company's strategies for safeguarding its business. "Let's be realistic: one should never ignore Microsoft," he concedes, "but Microsoft doesn't want to control elevators and cars." He says that there will be room for both companies in the embedded-systems market and that he expects Microsoft to focus on higher-profile applications for handheld and laptop devices while Wind River continues to provide software for more devices that aren't typically associated with computing.
Matthew Belkin, a research analyst at Hambrecht & Quist, isn't counting Wind River out yet. He says that the company's strong reputation among engineers; the wealth of experience gained from 12 years in the embedded-systems business; and a loyal customer list that includes AT&T (NYSE: T), Boeing (NYSE: BA), General Motors (NYSE: GM), IBM (NYSE: IBM), and Toyota (Nasdaq: TOYOY) should sustain the company during its search for a new CEO. But even bolstered by past successes, Wind River is certainly not in peak fighting shape for its most daunting match to date.
The concerns expressed in this article, which was published around the time when WINd had a few stumbles, have been duly addressed. And now that they have a new CEO, they certainly are in peak fighting shape.
And btw, in their October 7th. issue, The Register had this to say about Microsoft's last challenge to WINd's OS:
Posted 07/10/99 6:39pm by Graham Lea
Philips cans Velo, bows out of WinCE
Philips is dumping Windows CE along with its Nino handheld because of poor sales and tough competition from Palm. Philips says the market was smaller than expected, but that's a question of market definition.
Palm sales are healthy enough, so perhaps it's the CE market that is too small and highly competitive at that, what with Casio, HP and Compaq panting away. The truth seems to be that the market for Windows CE handhelds is pretty colourless, even after the introduction of colour. Palm of course recently responded with its own colour announcement.
A Philips spokeswoman told The Register it sees the market going quickly towards the integration of handhelds and mobile phones, and that an announcement of a WAP device is imminent. Now could it be that Philips is changing its status from being a drinking member of the Symbian club to a fully paid-up member? We suspect so, but Philips is not confirming this yet. The company might however have a problem getting in at a shareholder level. Symbian now professes itself happy with its current global clutch of stakeholders, it's got three in Europe already, so the door may well be closed. Philips mobile phone group is now running the show, with the expectation that the company will be focussing more on voice products and small cell phones.
Although reports of the death of CE would be premature, it is looking in poor health. Palm's decision to license its operating system to competitors may well prove to have been an intelligent idea, and avoid the problem that Apple faced earlier in its development. Microsoft's reaction was pretty low key, with mutterings about brand or channel strategy. The clam-shell Velo, another CE handheld first shown in prototype at Comdex in 1996, was very quickly sent on its bike. One model, the 8MB Velo, was only sold online in the US, with Philips saying it "couldn't be more pleased with the success of the Velo Store". A more likely tale was that Philips found the US retail market very tough.
Philips is collaborating with Microsoft with a set-top box for WebTV, and TV-Pak software, but is also involved with AOL's AOL TV project.
The unusually quick decision by Philips to snuff-out Velo would appear to be one of the results of the company's desire to increase profitability by reaching a target return on net assets of 24 per cent. There has been increasing pressure for the group to be split up, which the company resists by claiming that the brand name brings added value to the group. Of course there is no real reason why the company could not be split into mini-Philips with separate accounting, especially as until recently it broke down its revenue by division. ©
theregister.co.uk
Karim |
