Foleo: Big Blue Inside

Palm recently announced a partnership with Wind River Systems to provide the underlying open standards Linux operating system for future Foleo Mobile Companion products.  Over the weekend, PC World Magazine ran an article on their website about a possible acquisition of Wind River by IBM.

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Palm is a company that has a lot of balls in the air.  The Elevation Partners recapitalization deal still needs to be approved and potentially executed with a backdrop of an already jittery financial marketplace.  Palm is also gearing up for a number of new product roll outs including the Foleo Mobile Companion sometime in the next few weeks; the release of the new form factor Centro smartphone, and last, but not least, the launch of a new Linux-based version of Palm OS, which I’ve dubbed “Palm OS II” until Palm officially names the new operating system in advance of its introduction during the 2008 calendar year.

As if this wasn’t enough to keep a medium-sized technology company occupied, the possibility of having a new business partner acquired, I’m sure, has a few people at Palm interested in the latest M&A (mergers and acquisitions) newspaper headlines.  The last operating system provider that Palm was working with, ACCESS/PalmSource, ran into trouble.  So what is to prevent such a thing from happening again?

According to the PC World article, “Wind River Systems is a 1,300-person software development company that has been operating with larger losses last quarter, ending May 31, than the same quarter a year ago.”  The article goes on to note that company officials are expecting similar losses when the current quarter closes at the end of the month.

Enter IBM.  IBM invokes images of a solid technology company that has been operating in the Linux marketplace for the last few years.  More important to IBM, however, is likely to be the new markets that a Wind River acquisition will bring with it.  Once again, citing the PC World article, Wind River has developed embedded operating system solutions “primarily in the aerospace, defense and automotive industries” in addition to the consumer electronics segment.  IBM will bring the stability of a larger established organization, with deep pockets, to the table providing stable financial backing for Wind River’s embedded operating system platforms.  Having larger business partners such as IBM and Microsoft providing the base operating system platforms for two of Palm’s three product lines should put the minds of many analysts and customers at ease.  It is unlikely that both IBM’s and Microsoft’s embedded operating systems groups will degrade to a point where either company will be incapable of delivering products on schedule.

In Conclusion

At first glance we are tempted to sigh, “Here we go again,” upon learning of another acquisition that has the potential to impact the delivery of new Palm products and services.  Certainly any deal between IBM and Wind River Systems is still a ways off.  I’m a glass half-full person and as such, I tend to look at the advantages of such change.  The last thing that Palm needs is to have another business partner fail to deliver product according to schedule.  With IBM as a partner there is less opportunity for history to repeat itself thanks in part of IBM’s long corporate history and resources.

Let us know what you think a possible purchase of Wind River Systems by IBM will effect Palm and Foleo in the 1SRC forums.