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To: Allen Benn who wrote (7668)4/22/2000 3:59:00 AM
From: lkj  Read Replies (1) | Respond to of 10309
 
Allen,

For multiple times, Fidler said that he didn't think Linux was fitting in the embedded space, because it was designed to run on standard PC hardware. While this statement is valid, he didn't mention the time-to-market, upgradability, and application support advantages that Linux-based designs enjoy. For some of VxWorks' vertical markets such as switches, RTLinux will not compete in. Where RTLinux shines is the (almost) PC-like consumer appliances such as STBs and WebPads. What is your take on the general threat of Linux, and what do you think is WRS' strategy going forward to battle Linux?

A second question, have you gotten a chance to look much into Transmeta's Crusoe chips? Do you think Transmeta's Crusoe dream can be realized? If not, what do you think about its technologies in emulation and power control?

Thank you,

Khan

----------Article from EETime on Leneo's aggressive moves in to the embedded space--------
Lineo snaps up two more to
realize Linux plan

By Craig Matsumoto
EE Times
(04/21/00, 11:01 a.m. EST)

SAN MATEO, Calif. ? Linux vendor Lineo Inc. added two more
acquisitions to its roster this week, continuing on a quest to become an
embedded-software player on par with Wind River Systems Inc.

The company announced it has bought Fireplug Computers Inc.
(Vancouver, B.C.) and Inup (Saint-Ouen, France). Inup has expertise in
CompactPCI and clustering, while Fireplug has developed ThinLinux, a
version of the Linux kernel tailored for very small, Intel-compatible
embedded systems.

Lineo's strategy mirrors that of the vendors of embedded operating
systems that are trying to work Linux into their own plans. But Lineo is
convinced it holds the upper hand by going in the opposite direction ?
turning itself from a Linux distributor into a real-time OS vendor. Vice
president of marketing Lyle Ball claimed that the company's Embedix
software platform is "very comparable" to Wind River's VxWorks, just
not as widely deployed.

Lineo, based in Lindon, Utah, and originally named Caldera Thin Clients
Inc., was created out of business-software provider Caldera Inc. in 1998
with the intention of providing the Embedix kernel and related tools
under a royalty business model. Caldera's other half, Caldera Systems
Inc., continues to sell Linux to businesses.

Since February Lineo has announced acquisitions of six private
companies, aiming to expand its offerings both in technology and
support.

Because Linux wasn't created with real-time applications in mind, "we
knew we would have to acquire companies," Ball said. Specifically, for
real-time expertise, Lineo snapped up Zentropix Computing LLC
(Herndon, Va.) and RT-Control Inc. (Toronto), both of which had worked
on adapting Linux for real-time environments. Lineo also picked up
Moreton Bay Ventures (Brisbane, Australia), a specialist in virtual private
networks, and the engineering firm United System Engineers (Shiojiri,
Japan), which has worked with a variety of processor platforms and will
become a part of Lineo's support services team.

Questions have arisen about Lineo's ability to juggle so many mergers,
but the companies involved are small and in some cases have worked
together before. Both Moreton Bay and RT-Control share expertise with
Motorola Inc.'s ColdFire processors, for example, and "they actually had
many shared customers before we brought them together," Ball said.In
part, Lineo's overall strategy depends on Linux's open-source nature.
One selling point is that the Embedix platform can draw from ? and
sometimes share work with ? the army of ad hoc Linux developers
around the world, Ball said. Perhaps more important, Lineo is counting on
being able to offer embedded Linux for less than the price of a standard
RTOS. Systems companies working with vendor OSes "have been paying
through the nose for proprietary systems that don't have the ability to
keep up technically with where Linux has gone," Ball said.

Ball said customers sometimes complain that some OS vendors will use a
recently developed Linux offering to attract business while really pushing
a different, proprietary OS.

However, executives at Lynx Real-Time Systems Inc. (San Jose, Calif.)
said Lynx customers prefer a dual offering of the LynxOS real-time
operating system and Blue Cat Linux, the company's Linux distribution.

In fact, the combination is a blessing, partly because of the limitations
that still haunt Linux in a real-time environment, said Bill Hogan,
president of Lynx. "There are a number of our customers wanting to
have the choice of either an open-source Linux OS or a real-time OS for
their more demanding applications," he said.

Hogan said that Lynx plans to offer a binary interface allowing Linux
application binaries to run on either OS. "LynxOS really is Linux, in the
sense that you can run Linux applications on LynxOS," he said.

Still, Lineo executives believe theirs is an easier path. RTOS vendors
"have been charging customers for something they say meets all their
needs. But they're diluting their offerings by offering Linux," Ball said.



To: Allen Benn who wrote (7668)4/22/2000 9:44:00 AM
From: voop  Respond to of 10309
 
Hi Allen

Welcome home and if you need to leave again please don't be so mysterious.

Can you speak of WIND's strategy with its GUI imvestments from a while back (I believe it was Zinc and the NCI of what was Oracle now Liberate?). It does not seem WIND wants to reach the end-user consumer, so what do you see happening with this asset?

Regards,

Voop



To: Allen Benn who wrote (7668)4/23/2000 1:23:00 PM
From: Peter Church  Read Replies (1) | Respond to of 10309
 
Thanks for your in-depth response to my questions.

I was surprised by your conclusion that the Asia crisis was the cause of Wind's slowdown last year, mainly because you are almost the first to suggest it. I reviewed some of the company's analyst reports from last year. Early last year we heard that revenue growth would be less than 40%, that the Q41999 would be more back-end loaded, that visibility had decreased, that DSO's had increased, that Ron Abelmann would resign (one year ago today!), that TMS would be delayed, that ISI was reemerging as a strong competitor, that WIND was incurring more risk by acquiring vertical markets (TMS). But, nowhere was there mention that Asia would have an impact on sales.

In fact Asian results were strong while North America was responsible for the back end loading. Dain Rauscher Wessels did mention that a slowdown in service revenue resulted from a slowdown in new operating system ports which was driven largely by Asian semiconductor manufacturers and that Asia revenues were flat for 4Q99. If Asia was the cause of the slowdown, why was it so difficult to trace? I guess what you are saying is that a two year delayed response to an external crisis may be intrinsic to WIND's business model (design wins, revenue two years later?). I rather think that the slowdown was a complex basket of internal and external events that put a cumulative cloud over the company for a year.

For me, as an investor, it is important to understand why the company's stock was so badly trashed last year. Was this the type of roller coaster performance that we should expect or is it an exception? The company is now much stronger since the acquisitions. Still, expectations of hyper-growth can lead to hyper-disappointment if targets are even narrowly missed. I think the stock price, if not the company's business will continue to be very volatile and risky for the next few years. Maybe this is the best reason to have a diversified portfolio.

I guess one can view these disasters as prime opportunities for long term investors to buy the dips. But, after last year's trauma and with a potential recession looming, I am reluctant to buy anything too boldly regardless of the story.

Again, thanks for your reply!----Peter