Supplemental Project Hunt Report: The New Wind River (Cont.)
Part II. Differentiating Developer's Core Applications
From WIND's Contextual Layers of Enabling Technology.
Wind River's mantra is that it sells time-to-market (and total-cost-of-ownership). In "Fault Line," Moore argued that the resources of time, talent, and management attention were in short supply in the age of the Internet; whereas, money, packaged software, and service providers were abundant. Every one of WIND's customers, a high tech Who's Who, are under technology attack by competitors and must outsource every task that is not strategic, that does not gain competitive advantage. Differentiating what is core and outsourcing what is context is the survival strategy for living on the fault line.
In "The Gorilla Game," Moore (1999, p. 69) specified four layers of technology in the computer industry between electricity and the end user: semiconductors, hardware, systems software, and applications software. End users interacted with the application software that was enabled by the other layers. In Table 1, applying the distinction in Fault Line between CORE and CONTEXT, an expanded model of layers of technology specific to the embedded industry is proposed.
Table 1: Layers of Embedded Technology
CORE
Applications in Customers' Hardware Products
CONTEXT
Middleware
IDE plus Value-Add
Integrated Development Environment
Real-Time Operating System
Semiconductor-RTOS Integration
Semiconductor
Applications in the Customer's Hardware Products. For WIND's customers, what is core is the specific application in their hardware product, which they design using Tornado Tools and run on VxWorks. To gain competitive advantage, the application developer must create an embedded application that fits the features in their product design and differentiates it from their competitor's product. To help customers accomplish this rapidly and reliably, WIND offers basic platforms that serve as building blocks, providing the foundation for a customer's core value-added contribution.
The customer's hardware products, in which embedded software solutions are nested, are incredibly diverse. Last quarter, VxWorks secured a place in Sony's newly launched Network Walkman and in its digital set-top boxes for Cablevision; in Phillips Semiconductor's TriMedia programmable media processor; in Motorola's advanced-feature phone; in Intel's processor; in Sycamore Networks' intelligent optics; in 3COM's NBX 100 Communications Systems; in Palm's OS (WIND's TCP/IP network stack); in 2Wire's home gateway product; in Xerox's inkjet printers; in Polycom's VOIP; in VoiceTel's hands-free voice recognition remote; in Conexant's interactive TV decoder chip; in Shoreline Communications voice switches. Last week, TI pre-integrated VxWorks into an IP phone processor, and Sun Microsystems announced a 64-bit UltraSPARC processor for high-end embedded applications with Tornado/VxWorks.
What is context for its customers is Wind River's core: to provide the basic building blocks of RTOS, development tools, communication protocols, and services that speed a developer's product to market. To provide this added value efficiently, Wind River has reorganized into three horizontal and three vertical Business Units (BU). The three horizontal business units are concerned with basic functions: (1) professional service, (2) basic platforms, and (3) hardware-software integration. The three vertical BUs add value to basic platforms by providing building blocks targeted to specific markets: (1) networks, (2) consumer products, and (3) transportation, defense, and industrial automation.
Semiconductor. The first enabling layer is semiconductor hardware. Customers select a microprocessor based upon its power and degree of fit to the desired features of their application.
Semiconductor/RTOS Integration. To elucidate WIND's value-added core, Moore's single layer of operating system software has been differentiated into five enabling levels. As a second enabling layer, an embedded system requires integration of the microprocessor with software, beginning with porting--an interfacing that maps software features to correlated hardware features. WRS supports about 35 microprocessors, as well as FPGAs, DSPs, and various other cores.
Believing that alliances are crucial, WRS offers two unmatched services: (a) after acquiring EST Corporation, Wind River began using hardware-assisted-tools during porting; and (b) Wind River announced three Centers of Excellence (CoE).
The EST Bonus. Two unique challenges faced the deeply embedded market: foremost, were the efficient use of constrained target resources and the need for a fast, inexpensive communications link to the target during programming. Using EST hardware-assisted-tools, plus Tornado software tools, Wind River speeds hardware diagnostics and automatically initializes target chips, downloads to the target 10 times faster than conventional serial ports, and debugs target code using two integrated tools simultaneously: EST's visionCONTROL manages the CPU and acts as an intermediary while Tornado's CrossWind serves as a remote-source-tool (over the network) for debugging each task. So far, these hardware-assisted tools are available for MIPS, Hitachi, ARM, and Motorola processors. This new service solved difficult challenges by using a unique, leading edge, and proprietary solution.
Centers of Excellence. Wind River entered into contractual collaborative relationships with three semiconductor companies--Intel, Hitachi, and MIPS (with IBM, Motorola, ARM, and others expected to follow) and opened Centers of Excellence for each at WRS. A Center of Excellence combines engineers and marketers from a semiconductor company and WRS: (a) to optimize software-hardware integration, (b) to provide road maps, reference designs, and prototyping tools, and (c) to distribute Tornado/VxWorks. The CoE ensures that the software makes full use of new processor architectural features, coordinates future product development, and meets the unique needs of developers, digital consumers, and networking markets.
These collaborative relationships generate reference designs, which propose a microchip-WIND architecture that is suited for specific products. Reference designs are particularly appealing to start-ups who do not have legacy homegrown RTOSs or the time to waste designing and developing them. Reference design wins include partnerships with companies like Broadcom, Centillium, Connexant, Copper Gold, Globe Span, Intel, Motorola, NEC, and Virata.
Wind River will seek such complementary relationships with all open-market embedded processor companies and many high tech OEMs. Each pair of complementors reaps mutual competitive advantages when their separate hardware and software building blocks become an integrated embedded system building block. Each new CoE provides another strong endorsement of WIND's software solution and another value-added reseller with a reference design that includes WRS's platforms. Thus, the value of WRS's brand, Tornado/VxWorks, increases. A tipping point will occur when all semiconductor competitors must seek their own WIND-Semiconductor alliance because the buzz has it that a CoE attests to the quality that developers want. How much value is added? According to Metcalfe's Law, as the nodes of CoEs increase arithmetically, WRS value expands exponentially, a direct network effect. Better yet, as this expanding process of building complementor relationships with all semiconductor vendors and VARs ramps, becoming WIND-compatible creates an indirect network effect that promises to make WIND the de facto standard for embedded software, which, in turn, creates a sustainable competitive advantage. If many or most of the leading high tech vendors were to partner in this way with WRS, then WIND becomes a locked-in natural monopoly.
Real Time Operating System. The third layer of enabling technology is the RTOS. A real-time operating system is programmed into non-volatile memory of an integrated circuit and is designed to control the flow of operations, make decisions, and implement a fixed set of functions. The RTOS has a small-footprint master kernel that controls the integrated circuit's processor, memory, and input/output by executing instructions. Most important, it real-time functioning ensures that its specific application software responds immediately to input signals of real world events in a deterministic-rapid, reliable, and predictable-way to keep operations moving at their required speed. The "wind" kernel, as it is named, supports a full range of real-time features, including fast multitasking with 256 priority levels, microsecond interrupt handling, and both preemptive and round robin scheduling.
Timing and speed of execution become ever more important with the advances in IC complexity that are engendered by Moore's Law and by the requirements for ever faster speed in Internet communications that are engendered by Metcalfe's Law. At the same time, embedded resources are limited, requiring that the RTOS be very efficient, using little memory and husbanding all scarce resources. WRS owns two COTS RTOSs: pSOS+, developed by ISI, and their own VxWorks.
Embedded system software contrasts sharply with Microsoft's PC software. Market dynamics dictated a convergence to a single desktop system interface, the Win32 API and its associated tools. Given the tornado of demand, the industry adopted the Wintel total solution. The advantage of this open, universal interface was that many independent programmers could develop applications that were complementary to the Windows OS. This created strong indirect network effects, bestowing gorilla status on Microsoft, which, thanks to Moore's Law, was leveraged by writing more bloated software that required more Intel processing power. One disadvantage was that this froze the API in time, and, ironically, it cannot be improved without creating unacceptable device incompatibilities. This meant frequent system freezes and rebooting because the OS retains many faults from version mismatches, viruses, and errors in coding. This laissez-faire coding of the PC OS set low expectations that induced the consumer to accept caveat emptor.
In contrast, for an RTOS, scalability means the ability to offer the smallest kernel possible to retain resources for the developer's application. Applications are limited in scope and must function in real-time rather than being general and tolerant of delays. Portability is difficult because of variety in microprocessors architectures. The embedded market fragments into many specific APIs; each requires precise, reliable programming to satisfy its well-conditioned interface. Embedded microprocessor vendors require rigorous testing and qualification before they permit software porting. Failure in an embedded system is unacceptable in life-critical and mission-critical applications. Besides, a single, fixed interface would necessarily increase the size of the kernel footprint and unacceptably reduce system flexibility.
Most investors will never understand the intricacies of embedded system software, but we can understand a story about how WIND helped enable a scientific and health breakthrough. President Clinton said, "It [the Human Genome Project] will revolutionize the diagnosis, prevention, and treatment of most, if not all, human diseases." The Human Genome Project and Celera Genomics determined the complete nucleotide sequence of human DNA by analyzing 3.18 billion base pairs of DNA that are contained in every human cell. To do so, Celera used 300 Applied Biosystem's Prism 3700 DNA Analyzers that were powered by two Wind River Systems RTOSs. VxWorks simultaneously controlled a number of demanding systems: (a) standard Ethernet protocol for network communications between the analyzer and the PC host; (b) numerous pumps and valves that move the DNA material through the analysis process; (c) a four-axis robot arm for sample delivery; (d) variable voltages and currents to separate the DNA helix; and (e) a powerful laser to illuminate the separated base pairs for specific identification. Whereas, inside the analyzer, pSOS controlled a sophisticated digital camera programmed to photograph the sequencing displayed by each DNA sample. So, WIND's contribution was hidden but vital.
For investors, the most crucial message to understand is this: an RTOS in the only universal module in "hidden" embedded technology; everything else is tailored to solving diverse but specific applied problems. As the only universal module, an RTOS can be embedded as a building block in a very large number of products.
Integrated Development Environment. The fourth enabling layer is a set of tools that were designed and integrated to help developer's create their value-added applications rapidly and reliably. Product-development teams compete to get their attractively differentiated products into distribution faster than their competitors, wanting to secure first-mover competitive advantage. The shortage of trained embedded software engineers and the growing complexity of embedded implementation continually increase the value of WIND's development environment. The Tornado platform helps developers get their applications to market faster, and it minimizes their time-to-becoming-productive--in learning how to use an integrated tool set to program embedded software.
The Tornado platform consists of a set of three building blocks: (a) Tornado Tools, a comprehensive suite of highly visual, automated cross-development tools and utilities; (b) VxWorks operating system, a high-performance, scalable, real-time operating system that executes on the target processor, and (c) a full range of communication options for the target connection to the host server. The Tornado platform provides an open, extensible, flexible architecture that: (a) allows all tools to be used on all targets, (b) permits "plug-and-play" with the highly specialized tools of 500 WindLink partners, and (c) fits every developing need from small, resource constrained embedded targets to large-scale multiprocessing systems. Key design features include: (a) easy-to-use auto scaling "wizards" to configure VxWorks and other components, (b) a ready-to-run VxWorks simulator, permitting jump-start application development, and (c) visualization tools that improve developer's ability to analyze their application software. The first-generation Tornado received an EDN Magazine "product of the year award" in 1995. It attracted a worldwide user base of 30,000 developers.
Before leaving these basic platforms, WIND's world-class consulting services should be mentioned. Service can provide a quick-start for any project or help solve specific problems, from customized on-site training to specific help with evaluating technology, reviewing architecture, selecting tools, integrating system software, and developing or customizing boards and drivers. WRS has 500 design engineers, 250 consulting engineers, and 14 worldwide R&D units.
IDE plus Value-Add. The fifth layer of enabling technology adds value to the Tornado platform by tailoring it to specific Internet markets until it becomes a complete embedded software solution. Internet technology can be described as having three links: (a) the first link consists of enterprise servers and mainframe computers; (b) the second link of the Internet pipeline, infrastructure, consisted originally of hubs, switches, and routers, but more recently wireless base stations, and DSL and cable modems were added; and (c) "thin" clients or smart applications are the final link of in the information pipeline. Two classes of applications require embedded Internet technology. The first, Internet appliances, like screen phones, smart handheld devices, and set-top boxes, provide Internet access and services, and the second, Internet-enable embedded systems refers to the traditional embedded system with an Internet connection, connectivity enabling information sharing, software updates, and remote management. Central to the new WRS is its ability to enable all three links in the Internet pipeline.
Internet Servers. Tornado for Intelligent I/O Architecture is a complete out of the box solution for building diverse intelligent I/O platforms for Intel-integrated iServers, iLANs, iSANS, and iRAID. On today's servers, CPUs boast unprecedented levels of performance, but using the CPU for input-output (I/O) tasks unacceptably slows this performance; whereas, off-loading I/O to an input-ouput processor/IxWorks embedded system not only speeds performance but also solves many interoperability problems caused by incompatible drivers. (A device driver expands the functioning of an operating system by acting as a translator between the device and programs using the device.)
Another benefit of WRS's I2O collaboration with Intel was apparent in Intel's announcement a year ago of its Internet eXchange architecture (IXA). In post 7708, Benn described Intel's success formula, "Create a proprietary processor family that energizes a mass market of software and hardware developers that competes successfully with inflexible hardware and expensive proprietary software solutions." Intel has unleashed it considerable resources to brand IXA, striving to make it a de facto standard. To ensure rapid acceptance and standardization, it was in Intel's best interest to offer a reference design that specified WIND's Tornado/VxWorks as a compatible building block in its drive to move into the Internet switching market.
Internet Infrastructure. Tornado for Managed Switches (TMS) is an integrated software solution for building networking infrastructure, including packages for basic layer 2 and extended layer 2 Ethernet switches, and for layer 3 Ethernet switches and routers. The first product emerging from the valuable TMS solution was Cerent's technology, which led to its buyout by Cisco for 6.9 billion dollars. In post #7764, Allen Benn estimated that the run-time royalty from Cerent might run one million a year. Currently, TMS is very hot in the optical switching market, with 10 design wins last quarter. The HA in the newly introduced VxWorks AE will allow WIND to move upstream, from NICs to Controllers, going deeper into the infrastructure.
Internet Appliances. Tornado for Internet Appliances (TIA) provides an integrated embedded software bundle for developing, deploying, and managing Internet devices. Building on Java's platform independence and network awareness, TIA includes: (a) Personal JWorks, a Java virtual machine running on VxWorks, (b) WindStorm, a lightweight, modular software core with plug-ins for Internet-centric development tools (in addition to the Tornado 2 tool set), and (c) IceStorm, an XML- and HTML-compliant Internet browser. WIND has a 48% market share of Java design wins, making it the predominant RTOS in the Java world. WIND won JavaPro's "Best Embedded Java Product" award. WIND's acquisition of AudeSI brought many Java-related technology benefits, as did IceSoft. In addition to last week's Erickson/WRS Bluetooth announcement, 802.11 connectivity, a multimedia plug in, and a complete turnkey hardware reference platform are expected in Q4. Java-bases smart devices are a major tactical thrust of the new WRS that is facilitate by its new memory protection domains.
TDI. Tornado for OSEKWorks (Automotive Control) is the first and only complete OSEK-compliant solution for automotive applications. Because only ISI and WRS had been working with this European consortium, their merger created firm control of the auto control side of the market because there was little product overlap. Control products include anti-lock braking, power trains, transmission control, air bags, and fuel-injections systems. WRS was already in half of the auto navigations systems, plus it has wins in the in-the-cabin for Internet in the car, radar warning systems, and entertainment consoles, and the like. Tornado for Automotive Control includes the MotorWorks RTOS, developed by WRS and the German company 3Soft, the Tornado tool set, including WindView for Automotive, the MatrixX design tool (used strategically by many auto companies), and a set of options for host-target communication. In addition, the pSOS kernel uses only a 1.5KB footprint that also suits low-end consumer products. The huge but cautious automotive market has been slow to develop, but at analysts' day, it was reported to be heating up.
Middleware. The sixth enabling level is middleware. Middleware is a catchall for arcane software that is "intermediate," in between operating systems and applications; it is the glue that holds increasingly complex distributed computing together. WRS middleware guarantees significant time and cost savings by integrating COTS Internet drivers, stacks, protocols, and client-software with VxWorks. Within Tornado, WRS offers both device driver development kits and specific drivers for ATM, DMA, Ethernet, Flash, Hard Disk, SCSI, and many more. Within VxWorks, WRS offers an updated, high performance, scalable TCP/IP Network Stack, a suite that includes IP multicasting, classless inter-domain routing, dynamic host configuration protocol, domain naming system, and simple network time protocol, and a complete set of dynamically updated routing functions. Integrated with WRS's Network Stack and Simple Network Management Protocol environment are over 40 standard WindNet Networking Protocols, including PPP, PPPoE, NAT, OSPF, BGP, IPsec, and IKE. Client-access software, either plug and play or roll your own, is offered to ISPs, RBOCs, CLECs, DSL or Cable modem vendors, and the like to provide the exact look and feel that they value. In addition, as new business for WRS, encryption, VPNs, firewalls, and similar middleware are either integrated or offered in shrink-wrapped versions. Why reinvent the wheel when WIND offers over 18,000 utility routines? Palm was smart enough to decide to adopt the WRS TCP/IP stack.
What's more, the 500 WindLink partners focus on fast-changing telecom/datacom protocols, network management, and distributed computing. These partners offer many products that WIND does not yet provide, including specialized protocols for ATM, LAN servers, and SONET. Not only is WindLink a valuable addition to the value chain, it is a treasure chest full of potential future acquisitions that have already borne the high upfront costs of developing their intellectual property.
Continued in Part III: Analyzing The New WIND's Value Proposition |
