Wind River is focusing on Linux for select applications. Chuck Murray finds out what's ahead in an interview with Wind River's chief marketing officer, Dave Fraser.
Dave Fraser, chief marketing officer of Wind River Systems, Inc. (Alameda, Calif.) is responsible for product strategy, business development, and strategic alliances for Wind River. He's been in the embedded industry for 13 years, all of them with Wind River, and also previously served in the enterprise market with Hewlett-Packard. Fraser holds an M.S. in computer science from the University of Glasgow in Scotland.
SHOW DAILY: How difficult was it for Wind River to embrace Linux after all those years of making a case against it?
FRASER: It wasn't hard at all. Any company is composed of ideas, including those from the executive staff and those from the broad base of people in the company.
We started a Linux project called Pileaus a few years ago. It was basically Tornado (IDE) for Linux. It was going to be our own Linux-based distribution and we had a big engineering team working on it. Ultimately, though, the executive staff was worried about positioning issues and about GPL (General Public License) issues. But the point is, the culture of the company embraced Linux.
We had to have a changing of the guard at the top level of the company before we could make the change. Some of our executives believed BSD (Berkeley Software Design) was going to be the way. And, of course, we later saw that the market rejected that.
So from a cultural perspective, the transition has been pretty smooth. But from the perspective of the disconnect that occasionally happens between the troops and management, it was more difficult.
SHOW DAILY: What's your view of Linux's role in the embedded world?
FRASER: I haven't changed my view. Linux continues to gain momentum. With (Linux) 2.6 coming along, it's just going to get better for a wider class of applications.
I want to stress, though, that this is a very wide technology market. We are focused, with Linux and VxWorks, in going to the applications where they each fit well. The one-size-fits-all approach might be attractive from a marketing point of view, but it doesn't reflect reality.
SHOW DAILY: Are customers accepting Wind River's Linux approach?
FRASER: Yes, absolutely. We have 6,000 active customers, and most of them are not religious Linux people. They're simply trying to get a job done, whether it's networking, aerospace or automotive. Most of the customers we talk to are happy to get a supplier with a lot of device software expertise.
The stories about the Linux community and its reaction to Wind River are interesting, and we obviously pay attention to them. But from a customer standpoint, when we demonstrate Wind River WorkBench, which is our common IDE (integrated development environment), our customers are fine with it.
SHOW DAILY: So there's a different reaction from the hard core Linux community than there is from most of the developers out there?
FRASER: The people at Red Hat told us that from the outside, Linux looks like a bunch of zealots, but the reality is the zealots represent only about 2% of the population. More than 90% are developers who have to drive their kids to soccer practice. Those people are just interested in the technology, and in doing their job in the best way possible.
If you go to a customer meeting, and you're a Wind River person, and you're talking to a divisional head of Philips or Sony or Nortel or Cisco, you'd find those people aren't saying, "Linux is so cool." They want to know what we can do for them, how we can help them cut their costs, or how we can help their engineers standardize.
Our job is to support those customers and advance the state of Linux. We are absolutely committed to giving what we previously viewed as core parts of Wind River intellectual property back to the open source community.
SHOW DAILY: Wind River really suffered when the telecom bubble burst a few years ago because it was so heavily invested in telecom. Can you prevent that from happening again in the future?
FRASER: Over a period of time, our business in telecom went from 30% to 70%, and now it's back to 30% again. It shows signs of being stable for us now.
Today, Wind River is evenly diversified across five different areas. If we were a company that was 80% dependent on aerospace, for example, we'd be facing another bubble right now because of the post-9-11 growth of defense. But that's not happening to us.
The truth is, over the last few years, we were hit by one-two punch. First, telecom dropped like a falling elevator. Then, our project-oriented business model hurt us. The project-based business model meant that we received most of our revenue when customers started new projects. That was great when there were a lot of projects. But when companies stopped doing new projects and replaced them with maintenance, all we collected was maintenance revenue, which was just 17% of what we received for an upfront sale. We went from about 500-600 design wins per quarter to about 100. That had a bigger effect on our business than the telecom bust.
We've addressed that by going to a subscription model. Last quarter, our subscription business overtook our previous business model. So our business is stabilizing now.
In hindsight, it's easy to look back and say we shouldn't have been so dependent on telecom. But when you've got a business that's growing rapidly, it's very, very hard to look at it and say, "This is growing too rapidly." Our goal as a public is to maximize shareholder value. When business is growing, you just have to run with it.
SHOW DAILY: What's going to be your big news at the Embedded Systems Conference?
FRASER: We won the Boeing 7E7 program, which is enormous. This is probably the biggest aerospace program ever. It's a tremendous win, and Wind River's technology will be throughout the entire flight control system. This is the biggest program Wind River has ever bid on, involving between 3,000 and 5,000 seats. There will also be hundreds of sub-contractors working on it, using our new OS and new Wind River WorkBench IDE and tools environment. Beyond those 3,000 to 5,000 developer seats, we feel there will be additional applications for adjacent programs.