From the 'all your OS are belong to us' files:

Intel (NASDAQ:INTC) is acquiring embedding software developer Wind River (NASDAQ:WIND) for $884 million. Wind River is a company I've been tracking for years as a key player in the embedded software operating system space, first with its proprietary VxWorks OS and since 2004 with Linux.

Wind River is also doing reasonably well in the current economy. For its fiscal 2009 year, which ended on January 31, 2009, Wind River reported $359.8 million in revenue, a 9 percent increase in year over year increase.

Intel and Wind River are hardly strangers. Wind River has been working closely with Intel for years, on both Moblin (Mobile Linux) as well in the in-car infotainment area.

What is particularly interesting though is the fact that in the embedded space, Wind River is not an Intel only embedded vendor. In fact VxWorks works on a wide number of embedded processors as does its flavor of Linux.

In my view, the acquisition of Wind River gives Intel, a massive new entry point into the broad market for embedded software. With Wind River, Intel gets a company that has been active in embedded development - both proprietary and open source - for years.

Having silicon and CPUs alone is simply not enough to drive adoption, what Intel is doing with this acquisition is recognizing once again that developers are the key and that software development tools and operating systems are the path to developers.

This acquisition will also change the competitive landscape somewhat.

MontaVista Linux which competes against Wind River is also a supporter of Intel's Moblin. MontaVista however also supports more processors than just Intel and perhaps could use the fact that it is not owned by Intel as leverage with other embedded silicon vendors.

It's a bold step for Intel and certainly one that will shake up the embedded market. It will be interesting to see how Intel uses its Wind River assets to either support other silicon vendors or drive more device vendors to Intel platforms.