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CPU vendor buys OS vendor, Part II

December 01, 2009

rich.nass-December 01, 2009

I know I'm a little late to the party on this one, but I need to put my two cents in here. When Intel made the acquisition of Wind River, I was all over it, so it's only fair that I make a comment on what looks to be a similar situation, Cavium's acquisition of MontaVista.

It's a similar situation because it's a microprocessor vendor swallowing up an operating system vendor. The only difference is that it's on a smaller scale (a significantly smaller scale). Intel reportedly paid somewhere in the neighborhood of $800 million for Wind, while Cavium paid (only) $50 million. The former was the largest processor company purchasing the largest embedded software vendor. That's not the case with Cavium-MontaVista, but the similarities are still there.

This acquisition could be good for existing MontaVista customers, as it gives them a great growth path to a very high-end microprocessor. However, it's doesn't bode well for the microprocessor vendors (except for Cavium, of course). MontaVista claims that it will continue to support all the microprocessor vendors that it currently works with, and it's a pretty long list.

Hmm. That sounds familiar. The Wind folks made that same claim. The jury is still out on Wind, but they're sticking to their story of supporting all the necessary microprocessors. Similarly, we'll have to wait and see if MontaVista holds true to their word.

Cavium and MontaVista were close partners before the acquisition, and both claim they'll work with the other's competitors. So, I ask the same question I asked a few months ago: why make this acquisition? And I come to same conclusion--over time, MontaVista will end the support for Cavium's competitors. It's a natural progression, as those competitors begin toz lose trust in MontaVista.

Think about it. If you're processor vendor X, why would you let MontaVista in on your secrets, which is required to continue support, when there's the possibility (a strong possibility?) that those secrets will find their way back to Cavium, your competition? MontaVista will claim that that won't happen, but I'm not sure if I'd be willing to take that bet if I'm vendor X and there are alternatives to MontaVista.

So, who's next? It's too late to buy Embedded Alley, as they were acquired by Mentor Graphics earlier in the year (a very smart move, in my opinion). That one was a little different, as it was an OS vendor buying another OS vendor. But there are still plenty of operating system companies available. And there are lots of processor companies who may feel the need to join the club.

Richard Nass is editorial director of embedded systems in EET Group. He can be reached at rnass@techinsights.com.

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