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The MV IRC chat channels must be buzzing today over the Intel news. This is my take on it.
This move really doesn't make sense to me. It is fantastic for the share holders of Wind River, but, it is not going to turn out very well for Intel. Unfortunately, the leaders of Intel didn't do enough brainstorming before they cooked this deal. I don't think this will be a huge blow to MontaVista or others. Here is why.
In 2006, IBM did a study which concluded that successful companies pursued collaborative innovation strategies, and the most financially successful innovation was business model innovation. Embedded device development has reached a point where the industry is ripe for some serious business model innovation. It is natural to speculate that Wind River backed by Intel ownership creates competitive advantages that small companies like MontaVista and QNX can not overcome, if you subscribe to the big is better theory of corporate management. Nonetheless, a well trained MBA will tell you that MV can compete by looking for business model innovation, and they could look to the film industry to find it.
Many films are produced by independent film producers. The independents are very small companies that do not have employees, they contract out everything, on a project basis. They get funding for a project, hire on a team, produce the film, and then dissolve the team. This model works very well when you need to bring together innovative people for a creative exercise because creativity is incompatible with the structure of big organizations. With open source becoming the dominant choice in the embedded software industry, companies like Wind River have lost their ability to lock out independent software producers, making the film industry model very attractive for embedded device development. There is potential that, over the next decade, embedded device development will move to a model where independent embedded device producers get funding for a device, then they contract out the development to hardware/software contractors, and the team is dissolved at the end. This model will be executed on a global scale. In other words, a producer in the US will engage with system architects in Canada, hardware developers in Taiwan, and software developers in India, all made possible by Web 2.0, and the Internet savvy of the modern technology worker. I could see Motorola developing phones this way, Dell developing consumer devices this way, Telecom companies developing new soft switches this way, auto manufacturers developing in-car systems this way, factories automating their lines this way, and on and on. Not only is this a collaborative innovation model, it will also be a very new business model for embedded devices which, according to IBM, will add up to financial success for whoever drives it. The ultimate irony is that the penetration of Linux into the embedded device market was necessary to create the right conditions, and Wind River accelerated that penetration. They literally set the stage that could unleash some formidable competitive forces against them.
This means that the vary last thing that you want to be, if you are in the embedded software industry, is working for a big company. Even worse, you don't want to be working for a big company that has any kind of tether to a particular hardware architecture. Big and slow will not be able to compete with small and agile. Innovation doesn't happen when your boss forces you to bid Intel architecture on the RFP, but, Motorola, Dell, and Ford will be looking for innovation when you respond to that RFP. So, it could be argued that the best software developers will not work for Intel's Wind River, but will form their own independent software companies. This actually means that companies like MontaVista which have not grown too big yet, but have enough market presence to give the independent producer credibility, have an unprecedented opportunity to build a network of independent embedded device producers. The biggest competitor for MontaVista was Wind River, and Wind River has just been nailed to the floor by Intel. Thus, this development far less a problem for MV than it is an opportunity for MV.
The bottom line is that Intel's purchase is not a killer blow to MV or anyone else in the embedded software industry. In embedded software, as in other parts of our lives, size just doesn't matter.
Posted
6/4/2009 1:57 PM
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