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Posted by John Keller

Well, it's official: microprocessor hardware maker Cavium Networks is acquiring MontaVista Software. This is the second time in a year that a hardware company is acquiring an influential embedded software company.

You might remember last June when Intel bought Wind River Systems. We're seeing a trend here. In both instances, the hardware company is going after the software company to position itself for the lucrative handheld electronic device market. We can expect to see more of this in the coming year.

These acquisitions have kicked over the embedded systems anthill. Device manufacturers are scurrying for cover, and software companies are looking to reap the spoils. No one wants to be the one left standing when the music stops.

The software companies, in both instances, can say whatever they want about staying independent and supporting several different computer architectures. The fact is that Wind River for the last six months has been fighting to convince its customers that it won't eventually be swallowed up by Intel and disappear.

Meanwhile, Wind River's competitors gather at the bar and talk about how they're going to carve up Wind River's market share. MontaVista can expect to see the same.

This kind of thing happens in cycles. Hardware and software companies are looking to join forces in a down market to achieve the critical mass necessary to survive and grow.

I reckon they'll find, as companies have in the past, that bigger isn't necessarily better. As hardware companies buy up the software talent, they create an opportunity for the next wave of software technology developers. When the economy picks up, I suspect we'll see some new software providers emerge.

Some of these new software providers will prove to be vicious competitors, ready to devour their predecessors when the time is right.

MontaVista Chief Technology Officer James Reddy realizes this perhaps better than most. He led what was the leading real-time embedded software company 20 years ago. That company was called Reddy Systems.

When the economy went bad in the early '90s, Reddy Systems eventually lost its market share to a tenacious little software startup called Wind River Systems.

... and so it goes.


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Post a Comment

Blogger Chris said...
John: not only are hardware companies buying software companies to target the portable ("MIDS") market as you say....I believe hardware continues to be a commodity. Therefore, h/w guys need software to provide market differentiation to avoid commodity price wars.

Chris Ciufo
Wednesday, November 18, 2009 2:08:00 PM EST  

Blogger Curt said...
Actually, "Ready Systems" (not Reddy). I worked there.
Tuesday, February 23, 2010 8:10:00 PM EST  

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Welcome to the lighter side of Military & Aerospace Electronics. This is where our staff recount tales of the strange, the weird, and the otherwise offbeat. We could put news here, but we have the rest of our Website for that. Enjoy our scribblings, and feel free to add your own opinions. You might also get to know us in the process. Proceed at your own risk.

John Keller for MAE
John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.

Courtney Howard for MAE Courtney E. Howard is senior editor of Military & Aerospace Electronics magazine. She is responsible for writing news stories and feature articles for the print publication, as well as composing daily news for the magazine's Website and assembling the weekly electronic newsletter. Her features have appeared in such high-tech trade publications as Military & Aerospace Electronics, Computer Graphics World, Electronic Publishing, Small Times, and The Audio Amateur.

John McHale for MAE John McHale is executive editor of Military & Aerospace Electronics magazine, where he has been covering the defense Industry for more than dozen years. During that time he also led PennWell's launches of magazines and shows on homeland security and a defense publication and website in Europe. Mr. McHale has served as chairman of the Military & Aerospace Electronics Forum and its Advisory Council since 2004. He lives in Boston with his golf clubs.