Intel to buy software maker Wind River Systems for $884 million

June 4, 2009 | Dean Takahashi | Comments |
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Intel said today it will buy Wind River Systems, a company that lets wireless carriers and cell phone makers build software that’s embedded into phones, for $884 million.

The move is part of Intel’s effort to establish its lightweight microprocessors such as the Atom chip and underscores that Intel is making a big push into software for managing devices such as smart phones, mobile Internet devices, car entertainment systems and other gadgets for which Wind River helps provide embedded software.

In the deal, Intel will pay $11.50 a share in cash to buy the company.

The deal makes sense on a systems level, but it also brings Intel into a new age of competition with some of its traditional partners, including Microsoft, whose Windows CE operating system directly competes with Alameda, Calif.-based Wind River.

Wind River’s board has approved the deal, which is subject to regulatory approval and is expected to close this summer. Wind River will become part of Intel’s software and services group, headed by Renee James.

Wind River has been around since 1981. It has 1,600 employees and revenues of $359.7 million for the fiscal year ended Jan. 31, 2009. Among its thousands of customers are Alcatel-Lucent, BMW, Boeing, Bombardier Transportation, Mitsubishi, Motorola, NASA, Sony, and Verizon.

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About the Author, Dean Takahashi

Dean is lead writer for GamesBeat at VentureBeat. He covers video games, security, chips and a variety of other subjects. Dean previously worked at the San Jose Mercury News, the Wall Street Journal, the Red Herring, the Los Angeles Times, the Orange County Register and the Dallas Times Herald. He is the author of two books, Opening the Xbox and the Xbox 360 Uncloaked. Follow him on Twitter at @deantak, and follow VentureBeat on Twitter at @venturebeat.

  • Will definitely give Intel another avenue to make money from.
  • Karthik Balaguru
    It is just not a Business addition , it is multiplication for Intel :)

    Karthik Balaguru
  • My guess is that this is a 1+1=<2 outcome but that Intel factored that into the price that they paid for the company. If anything, Wind River's inability to breakout, despite a once Microsoft-like position of dominance, is a by-product of their failure to meaningfully go "up the stack" and away from their historical focus on the silicon layer as a primary differentiation point.

    In other words, if Wind River had enabled the next generation of Cisco and Apple killers by providing more differentiated OEM-in-a-Box offerings ala what Google is now trying to do with Android, they would not be staring at a $900M market cap and relatively flat revenues, margins and stock price.

    In fairness to them, it's not like anyone else stands out as knocking the ball out of the park in the same domain so this is perhaps just the last chapter (for now) in a book that began when Wind River and Integrated Systems merged back in 1999.

    But to be clear, there is very little software systems DNA within Intel, despite the fact that there are many thousands of software engineers within the company. In other words, barring a pretty serious religious conversion, software will always be the conduit to sell more silicon, which gates the likelihood of truly innovative solutions coming out of the combined entity.

    (disclosure: I sold a company - Rapid Logic - to Wind River, and had two portfolio companies that Intel was an investor in, so based on 12+ years of direct experience).

    Cheers,

    Mark
    --
    READ: Innovation, Inevitability and Why R&D is So Hard
    http://thenetworkgarden.com/weblog/2008/06/inno...
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