MontaVista updating Linux line

The Sunnyvale, Calif.-based company sells three versions of Linux--the Carrier Grade Edition for telecommunications equipment, Mobilinux for mobile phones and the Professional Edition for consumer electronics products and other devices. On Monday, MontaVista announced that Mobilinux 4.0 is due to ship this quarter and will be equipped with the more modern version 2.6 of the Linux kernel.

The new version is faster, gets "real-time" support that lets devices respond quickly to high-priority tasks, and will support more processor architectures, said Peder Ulander, vice president of marketing. It also can enable a device to boot up in less than a second and consume less battery power.

Next up with 2.6 support is the carrier-grade product, due to be announced May 16, a few weeks before the Supercomm trade show in June. New kernel features of interest to that market include support for IPv6--a new generation of the Internet Protocol that supports vastly more devices than the current IPv4--and an encryption standard called IPsec, Ulander said.

Linux has boomed in the market for "embedded" computing devices, catching on in part because,unlike traditional products, it can be downloaded for free and distributed without paying per-unit royalty fees. But several companies are stepping in to try to hold device makers' hands, supporting and certifying software and developing needed features.

MontaVista dominates the embedded Linux market and is growing, but its position isn't guaranteed, said Chris Lanfear, Venture Development Corporation's director of embedded software research. "We still see them as the leading vendor for Linux," earning about half the money spent on embedded Linux. "They're far and away the largest company."

That strength isn't guaranteed, he said. Device manufacturers are growing more familiar with Linux, raising the possibility that they'll be happy creating and supporting their own versions of Linux, Lanfear said. There is new competition from companies such as Wind River, TimeSys and Enea. And MontaVista's DevRocket programming tools are comparatively weak, he said.

Linux leader Linus Torvalds released the first 2.6 kernel in December 2003. MontaVista was slower to adopt it than some embedded Linux competitors--TimeSys has been shipping 2.6-based embedded Linux for more than a year--though MontaVista "backported" some of the new features to its earlier kernel.

MontaVista had a separate version of Linux specifically for consumer electronics devices, but that version is being phased out, Ulander said. Most of its functions have been moved either to the Professional Edition or the more specialized Mobilinux.

New sales model
Also changing is the company's sales model.

Since MontaVista was founded, it relied on a sales model that let customers use Linux in as many products as possible, but that charged a fee for each programmer using MontaVista's programming tools. The new model is more traditional in the embedded market: MontaVista will reduce the up-front charges in exchange for a royalty payment from each product that ships, Ulander said.

The new model is intended to appeal to those who can't spend large amounts of money on Linux products--the very customers who are most likely to build their own version of Linux instead, Ulander said.

But Lanfear of analyst firm VDC was skeptical. "It goes against what our research has said," he said. "The developers we survey routinely say the royalty-free aspect of Linux is the top reason for them selecting it."

MontaVista's revenue likely will be split evenly between the two sales methods, said Kelly Herrell, senior vice president of operations.

The company's revenue is growing, though executives won't release specific figures or discuss profits. Its 2004 revenue was more than twice that of 2002, and it's earned more than $100 million in the last four years, Herrell said.

VDC estimates that about $65 million was spent on embedded products and services in 2003. The overall market is about $762 million, he said. The firm is still preparing 2004 figures, but Lanfear said the Linux market is growing faster than the overall embedded market.

MontaVista has about 220 employees and is hiring. The newest arrival, announced Tuesday, is Mark Milazzo, the company's new vice president of worldwide sales. Milazzo previously was OpenWave's general manager of sales of mobile phone software.

MontaVista is seeking to sell its products not for only one gadget or another, but instead broadly across a customer's product line--a relationship that's more strategic, harder to achieve and catching on, Herrell said. "It's absolutely the trend. About 60 percent of our accounts have that relationship," he said.

Don't kill the vendor
Even though the software is available for free, customers will purchase service accounts because they need MontaVista to survive, Herrell said. Customers "will not violate the spirit of the business relationship and kill the vendor," he said. "They don't want to be an operating system company."

Another part of MontaVista's sales pitch is legal reassurance, which can be significant in light of the complications of using open-source software. For example, after programmer Harald Welte accused Motorola of violating the General Public License, a Motorola engineering vice president asked a MontaVista peer how to "make sure that never happens to us again," Ulander said.

"That is the core example why somebody shouldn't be doing his own operating system," Ulander said.