Further Shakeup in the VSPS Market – Intel acquiring Virtutech

Wind River to add Simics Virtual System Prototyping/Simulation Solution to Portfolio

 

What Happened?

 

Wind River, a wholly owned subsidiary of Intel Corporation (NASDQ: INTC), today announced it will add the Virtutech product line to its embedded software product portfolio after the completion of Intel Corporation’s acquisition of Virtutech which is expected to close later this quarter.  

 

VDC’s View

 

This announcement marks the 2^nd major acquisition in the VSPS market this week.  On Wednesday Synopsys announced that it had acquired VaST Systems Technology Corp.  As we stated previously – Synopsys’ acquisition of VaST gave the combined entity the top spot for the VSPS market revenue share.

 

What we did not specifically spell out is who a combined Synopsys/VaST would be leapfrogging…You guessed it – Virtutech.

 

Why all the fuss about a relatively small market segment?

 

It is no secret that the level of functionality required and expected within mobile and embedded devices has skyrocketed in recent years.  Meanwhile, development timelines and time-to-market requirements certainly haven’t eased off.  In fact, many engineering teams are being asked to meet or exceed previous time tables with fewer resources.

 

Not surprisingly, engineering organizations continue to look for ways to speed software development, sometimes through the use of new types of tools and/or methodologies.  Virtual System Prototyping/Simulation (VSPS) solutions, such as those from Virtutech, Synopsys, and CoWare, offer a way for development teams to potentially shorten the entire development process by accelerating the software development tasks to earlier in the overall project’s workflow.

 

So is this the cure-all for embedded software development woes?

 

In short – No.  First off all, as with any new technology, you cannot expect overnight transformation of entrenched development processes.

 

However, our 2009 Embedded Engineering Survey showed a significant increase in the use of VSPS tools over 2008 results (14.1% vs. 8.5% of respondents).  This increase should be viewed in a broader context confirming that engineering teams are adopting new tools (VSPS among others) in greater frequencies as part of comprehensive strategies aimed to revamp embedded system engineering processes in order to adequately and efficiently address the next generation of system requirements and challenges.

 

But is this a fit for Intel/WR and what should we expect going forward?

 

Beyond just the long-standing partnership between Wind River and Virtutech, our research shows that the companies’ business should, from a revenue perspective, map well together with telecommunications and military/aerospace traditionally generating the majority of both companies’ revenue.

 

Need we forget that Wind River is also now owned by a semiconductor company?  If nothing else, we can view this acquisition as confirmation that Intel is seriously serious about not just pursuing the embedded market but actually trying to dominate it.  Even though Wind River has stated that, similar to with its own products, Simics will continue to support other architectures – at the end of the day, Intel is still trying to sell silicon and Wind River was acquired to help them do that.

 

We fully expect that Wind River will continue to push to maintain and develop their, and now also Virtutech’s, partnerships with other semiconductor/IP vendors.  It should be noted that since Intel’s acquisition of WR back in June, our discussions with other industry participants appear to confirm that WR is making its best effort to evangelize and follow through on its messaging of silicon neutrality. 

 

The greatest factor left undecided at this point, however, might be whether or not all of Virtutech’s partners continue to play (as) nice with a WR/Intel-owned Virtutech over the long term (even if all of their external messaging suggests that).   

 

Whereas on Wednesday we suggested that Synopsys’ acquisition of VaST may create some opportunities for Virtutech and CoWare to capitalize on uncertainty in the market, today’s news potentially reverses the pendulum of market sentiment with perhaps an even greater magnitude.

 

With the potential acquisition targets quickly disappearing, can we expect any new entrants to the VSPS market from other EDA or ESW companies?

 

 

Related Posts:

 

• Synopsys Acquires VaST, becoming #1 in VSPS Market
• Embedded Market Consolidation Continues
• Intel to Acquire Wind River Systems ~ Update 2
• Intel to Acquire Wind River Systems ~ Update 1
• Synopsys to Acquire Synplicity
• Virtutech Announces Standards Initiative for Virtualized Software Development

 

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