Friday, February 03, 2006

LynuxWorks 2006 Vision Summit

VDC attended the LynuxWorks “Vision Summit” in San Jose, CA this week along with a number of other analysts and press representatives in attendance. The session included a series of presentations that focused on the company’s positioning of their RTOS and tools products with a focus on satisfying open system, safety, and security requirements. In addition, the session served as an event to introduce new additions to the LynuxWorks Team, including Robert Day, Joe Wlad, and Steve Blackman.

VDC’s conclusions from the summit meeting:

LynuxWorks is one of the traditional RTOS companies in the embedded software market. They have long held a position within this market of supporting a dual approach for their operating system solutions – LynxOS and BlueCat Linux – offering a platform choice to OEMs.

From VDC’s perspective, this private company’s revenue has been stable over the last several years that have most likely contributed to the lack of investment in rebuilding the organization and marketing programs. The summit comes on the heels of a LynuxWorks press release in December 2005 that discussed the strength of their most recent quarterly results, optimism going forward, and additional financing from current investors. To be clear, the additional employees are seasoned veterans within the embedded software market. These additions demonstrate the company’s commitment to a more aggressive marketing and product campaign that focuses on their key strengths and differentiators for their products – adherence to open standards, consistent Eclipse-based software development tools, safety-critical/high reliability, and security/information assurance (for medium EAL 4+ and high EAL 6+), and software reuse/portability.

2005 has apparently been a very good year for the company. The selection by General Dynamics Advanced Information Systems group in April for the U.S Army’s Future Combat System (FCS) was a key win. There were most likely significant resources dedicated to making this win possible and countless more to ensure its continued success. While such a resource commitment might suggest a strategic shift in focus for the company in the short-term in key target industries, we expect that the company is betting on the increasing awareness across all industries to develop products more efficiently, with higher reliability, and software portability, while providing some level of information assurance.

Bottom line:

The company’s success in 2005 and optimism for the future has allowed them to invest in their marketing programs, organizational structure, and product R&D. All these together should position LynuxWorks to capitalize on their momentum going into 2006. What remains then is the hard part: executing against the strategy and realizing the returns on those investments.