Wind River CEO Gets Channel Religion

Wind River, a maker of platforms of embedded computing systems, wants to engage the channel. This week the Alameda, Calif.-based company will roll out a cross-platform development environment that runs on top of Linux and its own VxWorks operating system. In the near future, the company plans to release a Linux distribution that it built with Red Hat and is spending $60 million to bring VxWorks 6.0 to market. In an interview with CRN Editor in Chief Michael Vizard, Wind River CEO Ken Klein explains the critical role the channel will play in helping Wind River drive the next generation of intelligent-embedded systems.

CRN: What factors are creating the opportunity for VARs in the embedded systems market?

Klein: We're really seeing a seminal shift in the marketplace. Two-thirds of software product devices are late, over half are above budget and a third [do not] meet product specifications. Many end-user companies are realizing for the first time that they are in the software business. In fact, 70 percent of the average engineering spend is now on software. And the amount of software that is being built is higher than ever because companies want to differentiate themselves. The average device today consists of more than 1 million lines of code, and to make matters worse, the time between concept and first product ship on average has been compressed to nine months. So the pressure on costs is continuing to mount. That creates fertile soil where companies want to buy software vs. build their own. In fact, 90 percent of this market has been people rolling their own solutions. Customers today are saying they can't get where they need to be without help from companies such as Wind River.

CRN: What downstream opportunities does that create for VARs?

Klein: The big opportunity in our space exists in the integration area. A lot of these devices are being deployed in environments where you have remote intelligence, and there is a need to communicate with enterprise systems. Some statistics would suggest that in the next four years there will be 14 billion remote intelligent devices. So we need expertise in not only implementing the software, but also integrating these systems with enterprise systems. That's a huge opportunity for VARs. We're looking for partners to extend our footprint and provide services to our customers around our offerings.

CRN: What trends are making it easier to provide those services?

Klein: Companies are really looking to enable their devices with wireless capabilities. Everything is IP-enabled. That creates the opportunity for integration with enterprise systems. We also think there will be a big change around having devices managed by enterprise systems. Having an enterprise system respond to a device in realtime is also going to become more of a reality.

CRN: What opportunity do security issues provide for VARs?

Klein: We're seeing customers more concerned about security that ever before. There are some pretty scary thoughts about being able to impregnate a device with a security flaw. Therefore, the security expertise of VARs is going to be increasingly important to our customers.

CRN: What are you doing to help foster the development of a channel?

Klein: We built an alliance group within Wind River. We're looking for boutique-type companies that have expertise in specific industry verticals that we can partner with. There's really a paucity of expertise in this area right now. From a software perspective, we think this is a $3 billion opportunity that only has 10 percent penetration. But overall, there is an additional $20 billion that today is served mostly by in-house developers. There are 300,000-plus developers building device software today, and they are absolutely gagging on complexity, so they need help. They've got a million lines of code to do in nine months, they have to differentiate what they do and they need to keep costs down. That sounds like a real opportunity for VARs. We have the right set of partners today, but we would like to have more. We want to move into the VAR and the systems integration community. At one point in our history, we had hundreds of VARs and that got scaled down with the downturn. But today we're open for business. We're putting a channel-friendly business model in place so we can synergistically work with VARs. I am a big believer in partners, and there is no way we'll be successful without a strong, robust partner ecosystem.

CRN: Do you worry that some VARs won't want to return to the fold?

Klein: It's been such a long time since we pulled back. It's now a great opportunity to re-engage. We have really progressed as a company, and the VARs that we are looking for today have a broader range of expertise.

CRN: How do you position Wind River?

Klein: We've been around for 23 years. We help people develop device software that runs better, faster and more reliably. It's really all about device software optimization. We have 20,000 customers worldwide with 30 percent market share, and we had revenues of about $204 million last year.

CRN: What's the strategy behind embracing Linux?

Klein: We've signed the most important partnership in our history. We're co-developing a version of Linux with Red Hat to be able to provide standards in the marketplace. Linux is actually playing a role where it is defragmenting this industry. A lot of the roll-your-own type customers now see Linux as a viable alternative.

CRN: Isn't one of the reasons that Linux is attractive is because it's a royalty-free environment? Won't that have an adverse affect on demand for VxWorks?

Klein: We're actually attacking that opportunity. We have actually announced a production-free version of VxWorks. For a higher per-seat, per-developer, per-year price, we're offering a royalty-free version of VxWorks. We're being OS-agnostic.

CRN: How are you getting VxWorks developers interested in Linux opportunities?

Klein: We're offering the first cross-development, cross-platform, cross-device IDE. This allows customers to interoperate across Linux and VxWorks, which is our flagship platform.

CRN: How big of a threat is Microsoft in this space?

Klein: OEMs have an aversion to Microsoft. They have all seen the movie before. They've seen the value usurped by Microsoft at the desktop and at the server level, so they are not about to let Microsoft in their devices. That's a general statement, but it's mostly true. And there are a lot of embedded applications that are better suited for Linux anyway. There's also a lot of people out of school that have Linux expertise. That creates a heat shield from Microsoft for Wind River in this space.

For additional news about embedded devices, visit the Embedded Computing Solutions site at ecsmag.com.