| MontaVista touts 2006 progress, hires new exec's |
Feb. 27, 2007
Privately held embedded Linux provider MontaVista claims its Q4, 2006 revenues grew 40 percent, year-over-year, and that its full-year revenues have a chance to better 2005 figures by a similar margin. Additionally, the company has hired four new top-level executives.
MontaVista's new executive hires include:- Russell "Rusty" Harris, EVP of worldwide field operations. Previously, Harris held similar sales and marketing positions at Bluestar Solutions, Documentum, and EDS.
- Bill Seawick, chief marketing officer. Seawick has previously worked at Interwoven, Oracle, Sun, Apple, TRADOS/SDL, Blue Pumpkin, and Blaze Software.
- Larry Slotnick, vice president of engineering. Slotnick has 26 years experience leading development efforts at PalmSource, Pixo, Apple, Octel, Claris, Convergent, and HP.
- Sanjay Uppal, chief financial officer. Uppal has 26 years experience with companies that include KSR, Trident Capital portfolio companies, Bluestar Solutions, Amdahl Corporation, Coopers & Lybrand, A. F. Ferguson, &
Co/KPMG.
The news was delivered by CEO Tom Kelly, in an exclusive interview with LinuxDevices. Kelly said, "We are fairly cautious about the information we put out -- that's one of the benefits of being private. But, we still want to communicate what's happening in the company."
Asked how MontaVista was able to achieve its growth, Kelly replied, "It's the spread of Linux, organically moving into areas where RTOSes have been the only solution. Even companies with their own RTOSes are going to Linux, [because] they don't relinquish any control."
Kelly continued, "Almost every one of our customers initially rolled their own RTOS or Linux distribution before going to a commercial source. They found out that it's expensive, hard to do, and that you need to have all your hardware finished first. You've got to essentially build a whole operating system software division inside your company."
Kelly added, "We put customer logos up in the lobby of our office. We added over 200 in 2006. In almost every case, new customers acquire a small implementation, then Linux organically moves into their other products."
MontaVista currently touts customer relationships with Agere, ENEA, ETRI, ITT, Matsushita, Motorola, NEC, Oce, OKI, Philips Semiconductors, Pioneer, Sony, Sun, and Toshiba.
Asked whether MontaVista's increasing revenues had also brought profitability, Kelly replied, "We could be profitable if we wanted to. But I've chosen to invest in specific areas, including tools, individual distributions, and outbound marketing. I'm trying to grow this business, because I think embedded Linux is a big deal, and a big market."
He added, "I like the position we're in. I like to see other companies starting to invest in commercial grade solutions for Linux, because it's going to be a big market, with room for a lot of companies."
MontaVista claims that its Linux operating systems have shipped in some 40 million devices to date, and that as a company, it supports more hardware than any of its competitors -- some 70 processors and 230 boards.
Kelly said MontaVista is not currently in acquisition talks, and that plans to take the company public, if any, would not begin for at least another year. He said, "We won't even start thinking about going public until 2008. First, we need to get the company cranking on all cylinders, and have a predictable revenue stream."
He added, "In the last six months, I've built a team of top-flight executives, and led the company to sequential quarterly revenue increases, as well as year-over-year increases. We have consistent pricing and business strategies."
Kelly said MontaVista currently derives 20-25 percent of its revenues from the mobile sector, and 30-35 percent from the carrier grade (telecom) sector. The remainder is derived from sales of Professional Edition, the company's general purpose Linux distribution, which targets consumer electronics, automotive, medical, and military/industrial applications.
Kelly said MontaVista currently derives just 10 percent of its revenues from service agreements, a proportion he hopes to increase. "I want to grow our service revenues, including as a percentage of overall revenues, because I think that service engagements lead to product placements in our market. Services are going to help grow the company, because services bring in product value."
Along with services, MontaVista will also continue to invest in areas of "significant future growth," Kelly added, specifically citing mobile phones and carrier systems. He noted, "Mobile is the smallest market for us, but one with significant growth potential. And, we have a head start there. At one time, 90 percent of all Linux phones were running MontaVista."
Asked about competitor Wind River's acquisition of RTLinux, and how MontaVista planned to counter the move, Kelly replied, "That's not Linux. It's a proprietary real-time solution. We do hard-real-time with Linux, and there are very few applications in the markets we serve where our real-time performance is not adequate. Virtually nothing."
Kelly also confirmed that MontaVista could partner with platform virtualization providers in order to enable its Linux stacks to co-exist with RTOSes. He said, "Virtualization technology will be one of the primary areas of investment for us this year. We are working with semiconductor vendors and end users in this area."
According to Kelly, the embedded Linux market "is growing exponentially each year, as companies demand more flexibility and faster time to market than proprietary RTOSs and customized build-your-own Linux distributions can offer."
Additional 2006 milestones
Additional 2006 milestones touted by MontaVista include:MontaVista is currently in the process of re-launching a "slicker, more robust" website, Kelly added.
 Kelly (pictured at left) took over the CEO position at MontaVista last June, replacing company founder and embedded industry legend Jim Ready, who acceded to the CTO position. Kelly subsequently secured a $21M funding round for the company, and hired four executives with more than 100 years of collective experience.
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