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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Pirah Naman who wrote (3352)	6/26/1998 3:19:00 PM
From: Peter Church	Read Replies (3) \| Respond to of 10309

I attended the shareholder's conference yesterday and was able to see the new campus under construction. Here are some notes from the day: Ron and Jerry both made presentations. Ron said that the stock was undervalued and was happy about the upgrade from DB. He liked the investments WIND has made, especially OST. The strategy is to internationalize engineering employment so as to not be prisoner to Silicon Valley economics. Tornado was developed partly in France. OST brought in 12 outstanding engineers, he said. He reiterated the minimal impact from Asia. WIND now has 35% of the COTS market and is 10% ahead of the competition (INTS?) in market share. Good visibility continues. The two largest customers are Nortel and HP, but these comprise only 3% to 4% each of the business. They have about 25% of their business in Telecom, 20% in office automation, 20% in industrial, 20% in military and 5% in consumer applications. So not all eggs are in one basket. He talked about the breadth of WIND's business w.r.t. the Internet, from switches and infrastructure, into servers (with I2O), and lately starting to enter the consumer space (with Wind Zinc, JetSend, Cameras, Web Phones DVD, PDA, SetTop). All up and down the pipeline, WIND is becoming a leader. The business looks great. MSFT will release their final OSM for I2O by the end of June. With regard to CE, Ron reiterated that in the last 15 months CE has not impacted their deeply embedded business because its main thrust is in the consumer market, down to Palm Top level and into NT. That market is about 7% of WIND's business. FUD has complicated sales somewhat. MSFT would probably have to start from scratch to bring out a truly competitive product in embedded space. It's hard to grow something down. Ron also said the ISO 9001 certification gives the WIND credibility that other companies can count on in partnerships. It documents company methodology and sets a game plan for growth. Gross margins are about 60% for services and 90% for runtime licenses. The auto industry is starting to change its attitude about royalties. The 3Soft investment will help in that sector (OSEK). In answering a question about FAS 123, Ron referred the question to Dick Kraber and said it was largely theoretical. He said he follows this SI thread! Dick had no comment at the time. Jerry talked about the bigger picture. He seems to be the visionary of the company. He stated that devices are getting smarter, invisible computers will be everywhere. Software is part of the infrastructure. Reliability is critical. The internet is only one part of the trend. Every manufacturer will have to put more embedded intelligence into their products. Chips and screen prices are coming down. The process is inexorable. He said the GUI human interfaces will consist of either Java, HTML or WIND-Zinc. He thinks the Wind Zinc interface will be important. He thinks Jet Send is cool, but the other manufacturers will have to come on board. He showed a Kodak digital camera with IR communication. Point it at a printer to download the image. The construction of the first two buildings is on schedule. The shell is up and the finish out work remains. Lots of light. 10 x 9 foot basic offices. Move in by the end of the year. The contractor said it was a modest project with some amenities. The view of the estuary was great and they will have a waterfront park. Possible ferry access from SF. Dick said no company boat. But the yacht club is next door. I talked to one of Wind River's first engineering employees. She quit in the early 90's and is now working in a different career. However, she said it was a very exciting job then. She said they always had an emphasis on reliability and quality, much more so than work she did in Windows environments. Being a non-professional, could anyone help me define the jargon terms I often hear and sometimes even use: Scalability Deeply embedded vs. embedded Portability