Business Week: Intel buys the Wind River to trigger a wave of mergers and acquisitions

Beijing time June 8 "Business Week" article pointed out that the software and hardware industry before the line is very clear, but later will become more and more blurred.　　The latest evidence is that Intel announced on June 4 that it would buy the Wind River, the software maker.　　The 884 million-dollar deal, expected to be completed this summer, will not only make Intel more deeply into the non-computer equipment market, but it will also likely shake up the current technology market and push for more similar deals between software and hardware makers. For years, software vendors like Microsoft have been independent of chip makers. But as computer technology moves into a variety of non computer devices such as smartphones, robots and even automobiles, hardware vendors and software developers are in dire need of closer cohesion. In many cases, software developers are not doing a good job of maximizing the potential of chips that are becoming more powerful and faster.　　Apple last year bought the chip maker PA Semi. Intel has been involved in the software market through software and services division 15 years ago, but that part of the business has never been profitable, and its main purpose is to support the sales of related chips. "We know how to develop and sell software and stay profitable," said John Bruggeman, chief marketing officer at the Wind River, the world's largest maker of non-computer computing software. "Non-computer computing is a fast-growing market for acquiring the Wind River, and Intel will go deeper into this market that includes robotics, smart wireless routers and car entertainment systems." The market is large and profitable. According to Intel's last year's earnings, its non-computer equipment business has a full-year revenue of about $1 billion trillion, which accounts for a very small proportion of its total revenue of 37.6 billion dollars.　　But according to IDC, a market-research firm, the total revenue of the 2007 non-computer computing market was as high as $900 billion, 4 times times the total revenue of the computer market, and it grew nearly twice times the size of the computer market. After entering the software market, Intel can also sell its chips to existing customers in the Wind river, such as rung, Boeing, General Electric, Thor and Samsung Electronics. Richard Williams, an analyst at market research firm Cross, said that if Intel could bundle the Wind River's software with its chips at a reasonable price, all companies would buy Intel's products.　　That could pose a threat to Intel's rivals, like Karl, Renesas and Texas Instruments. The deal could also help Intel participate more actively in the development of the Android operating system. Sales of Android devices will increase 10 times-fold this year, according to Strategy Analytics, a market-research firm. It is expected that by the end of this year there will be 18 mobile phones based on Android, and the Wind River is involved in the design of One-third of the products. At the Computex trade fair in early June, Intel demonstrated the Android systemCollaboration with other software, but Intel is largely on the verge of Android development. More mergers and acquisitions Intel may want to develop its own custom version of the Android system to match the upcoming next generation of the move chip. Ramon Llamas, a senior research analyst at IDC, predicts that within a year or two after the acquisition, Intel will sell packaged products that integrate Intel's chips and wind River software in certain products such as mobile phones and netbook-like devices. Since Intel has been working with the Wind River for more than 10 years, it is likely to launch a packaged product faster. They started working together a year ago to develop new products for the automotive and mobile markets. Bruggeman said: "We will not start from scratch, we have at full speed ahead." We have developed many solutions in many market areas. "The deal could also accelerate other mergers and acquisitions between the software and hardware sectors," he said. With software optimized for its chips, Intel may be able to expand its lead. "Intel wants to expand its business," said Matt Petkun, an investment bank D.adavidson &co. "Other competitors may try to catch up with Intel through the acquisition of hardware and software," he said. Bruggeman expects Microsoft to buy a chip maker or hardware manufacturer in the next few years. Its potential acquisitions include chip makers such as Freescale, and software and related tool makers in MontaVista computing markets such as Software, Green Hills Software and QNX Software Bae Analysys. Bruggeman said: "After Intel entered the market, market competition is no longer a minor one." "Author: son