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Technology Stocks : INTS - Integrated Systems -- Ignore unavailable to you. Want to Upgrade?

To: John B. Dillon who wrote (277)	3/21/1999 1:05:00 PM
From: Alan A. Hicks	Respond to of 327

A Forbes article in the March 22 issue has an article on Cygnus and their new “freeware” OS called eCos (embedded Cygnus operating system). The article suggested that this new “free” embedded OS would put market leaders such as ISI and WIND out of business. Subscribers began receiving the issue the middle of last week which may explain the weakness in both WIND and INTS shares last week. Cygnus is a private $20 million company that has built a business out of providing freeware GNU compilers and other tools. (They charge for support for their tools.) WIND has provided Cygnus GNU tools for years with their OS, VxWorks. They work for many applications but hardly provide the highest performance, particularly for some of the new embedded processors. Actually quite a few companies have tried similar approaches to gain a foothold in the embedded market. For example, Green Hills, another compiler and tools provider, developed their own RTOS and began giving it away with their tools a few years ago. Both WIND and ISI had sold Green Hills tools. It turned out to be a disastrous move for Green Hills. I have heard that WIND and Cygnus have also had a falling out recently. WIND can simply go elsewhere for their freeware compilers. These kinds of articles have been coming out for years about potential competitive threats to INTS and WIND. They show a deep fundamental lack of understanding of the embedded market. There is a LONG LIST of reasons why a customer will pay for an RTOS (real-time operating system). Foremost is an RTOS must have bullet proof reliability. pSOS has had millions of copies running without a single bug. Can you imagine a car company building an anti-lock break system with an unproven OS based on free software? The “buzz” from the recent Embedded Systems show I have heard was very positive around the ISI booth. Apparently the sales people were pumped up about the customer reception to the recently released pRISM+ 2.0. It looks like this release is rock solid and is beginning to deliver on good integration of all the tools needed for embedded development projects. My feeling is ISI's business is very much on the upswing. And, the embedded market is still in its very early stages of growth. An explosion in embedded internet connected devices/appliances will dwarf traditional computing platforms over the next few years. That is why so many companies want to get into this business. But, ISI is very well positioned. ISI's largest end market is embedded communications applications as pSOS has traditionally focused on the needs of its telecom/datacom customers. ISI also bought the market leading Epilogue embedded communications products company and bought Dr. Design, the largest embedded design services to help customers get their products to market quickly. Insiders have been buying INTS at these prices recently. I am comfortable doing the same.