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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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MARCH 30, 2004
The Penguin Is Popping Up All Over [Page 3 of 3] RED HOT IN REDMOND. "The consumer companies realized that they were independently doing [similar] projects in open-source software," says Sony's Smyers. "There was an obvious benefit to working together. It represents one of the most sophisticated collaborations I have seen." Working together, the competitors are using Linux to help speed boot-up time and improve power management in consumer electronics products. Smyers says even though this means rivals will share technology, it leaves plenty of room for them to build distinctive features that will differentiate their products. Although Linux is popping up in places beyond the server room, it has far to go before it takes over the electronics world. Microsoft (MSFT ) has essentially matched Linux' growth trajectory, as Redmond's embedded-OS unit posted the fastest revenue growth among the company's business units in the fourth quarter of 2003, according to Scott Horn, director of the embedded-systems group at Microsoft. The 66% increase in the quarter pushed Microsoft's embedded revenues to $68 million, which represents less than 1% of the total company take but is a fairly large figure for this market. And Microsoft has logged some impressive customer wins including German performance carmaker BMW and mobile-phone maker Motorola (MOT ). Horn contends that the convenience Microsoft offers with its versatile embedded-software systems will eventually win out over Linux. "Companies are finding it takes a lot more engineering resources than they expected and a lot longer than they expected when they used Linux to build products," he adds. Linux advocates vigorously contest that assertion. OFFERING TWO WORLDS. Regardless of which side is correct, both sets of rivals are preparing for a long race. "Much of the other proprietary stuff has dropped out, and it's a battle between Windows and Linux for the future," says Rob Enderle, an analyst at software and hardware research firm Enderle Group. The pressure to survive has grown so intense that even the company with the largest share of the embedded-OS market, Wind River, has chosen to push into Linux and develop products in tandem with Linux powerhouse Red Hat (RHAT ). That's quite a statement from a company that claims its VXWorks operating system has 40% to 60% of the market. Now, Wind River believes it can win by offering customers the ability to work in both the open-source and proprietary worlds. "We have a huge advantage over everyone else in the Linux distribution space," declares Wind River Senior Vice-President John Bruggeman. "We've got the dominant market position in both and the ability to interconnect both." His argument has merit, because even though Linux and Microsoft will be the big players, at least some other competitors such as Wind River will likely also be left standing in five years. HIGH-STRESS REQUIREMENTS. What's more, Linux still faces some serious questions before it can reach every corner of the embedded-systems market. Unlike PCs or servers, embedded systems often control tasks where failure can be catastrophic or fatal, such as flap controls on a fighter jet or the braking mechanism on an elevator. Not only do embedded systems need to be reliable they also must operate under much tighter constraints than software on PCs and servers. For example, response time can be a crucial factor when an embedded system controls a factory production line, where a command delay of five seconds can cause significant damage if, say, a supervisor needs to shut down the line instantly. And telecom equipment makers often require that the likelihood of system failure be less than 0.001% so as not to interrupt critical data and voice communications. Those types of performance requirements make customers extremely leery of change. Still, thus far such concerns -- or even the threat of intellectual-property lawsuits from renegade software company SCO -- haven't scared away MontaVista's customers. The company has added 1,200 of them since 1999 and is enjoying revenue growth rates of 70% annually, says CEO Ready, as more and more customers pay thousands of dollars for the use of its customized Linux programming and for support from its engineering staff. Other embedded-Linux suppliers are likewise reporting strong growth. "We're at the beginning of an enormous opportunity," says Ready. With Tux now finding new environments to thrive in, how huge that opportunity will prove to be might even surprise Ready and his Linux-loving cohorts.
 By Alex Salkever, Technology editor for BusinessWeek Online
BW MALL
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