Intel Buys Conflicts With the Software

Intel Thursday morning said it was going to spend $884 million to buy Wind River Systems, which makes software for embedded devices. Embedded devices are machines that don’t look like computers but have computers inside, be they factory robots or portable music players.
The move reflects two of Intel’s current priorities. It has been building up its software activities, with 3,000 programmers making some products to sell and more commonly expanding the uses for its chips. And it is making a big push into embedded devices through its Atom line, which is compatible with its larger processors but uses less electricity.

So on the face of it, buying a company that makes embedded device software sounds ideal.

But there is another bet in the deal: That Intel can rise above the complex web of alliances between companies that are disrupted by the acquisition.

To start with, there’s Microsoft, whose products are tightly connected to Intel’s own flagship line of microprocessors. Microsoft’s Windows Embedded CE operating system is the largest competitor to Wind River’s operating systems. Maybe the Intel-Microsoft alliances is big enough to handle this sort of competition. After all, Intel has been a big backer of Linux, and Windows Embedded runs on non-Intel chips.

Still, Microsoft issued a rather stiff-upper-lipped statement in reaction to the acquisition:

Microsoft has a robust partner community, of which Intel is a part. As we have a long-standing relationship with Intel, we look forward to opportunities to continue working together in the future. We are working with Intel to evaluate what impact today’s announcement has on our partnership.”

The impact on Wind River is harder to evaluate. More than 70 percent of its software runs on chips made by companies other than Intel. Indeed Wind River said earlier this year that it will work to adapt Google’s Android operating system to run on Qualcomm’s Snapdragon chips, a major competitor to Atom.

How many of its customers will start asking how much Intel is going to support rival chips?

Intel declined to make any executives available to discuss the acquisition. Bill Kircos, an Intel spokesman, said it will keep Wind River as a separate subsidiary, and that it would create appropriate firewalls to make sure that information from other chip makers isn’t divulged to other parts of Intel.

But I’m not sure that the other part of the company’s strategy will help build confidence among other chip makers. “We want to make sure that Wind River’s software runs best on Intel platforms,” he said.

BY Saul Hansell
Source:The New York Times

Copyright 2009 The New York Times Company.



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