Under the deal, both companies' engineers will create Red Hat Embedded Linux, a variant of Red Hat Enterprise Linux. Wind River will be the "premier" sales channel for the software and will support it in its development tools, according to the companies.
Terms such as revenue sharing, product availability, partnership exclusivity or deal duration weren't revealed, but "both parties expect this to be a long a prosperous partnership," Wind River said in a statement.
The move marks a major change for the companies and for the embedded Linux market, which until now hasn't had to reckon much with either company.
Wind River announced in 2003 that it would embrace Linux alongside its proprietary VxWorks operating system, but that effort couldn't go far without a version of Linux. And Red Hat largely scrapped an embedded Linux effort begun in 1999 to concentrate instead on server software.
Meanwhile, the embedded Linux market has been active. One embedded Linux specialist, MontaVista Software, said in February that its revenue grew 77 percent from 2002 to 2003 and that its software was selected for more than 500 new devices in 2003.
Other specialists include TimeSys, LynuxWorks, Motorola's Metrowerks and FSMLabs.
Linux isn't the only factor in the embedded market, either. Microsoft is gunning for the market as well, and embedded specialists such as Green Hills Software are campaigning against Linux.
The partnership between Red Hat and Wind River is the second major change in the Linux landscape this year. Novell -- which like Wind River reversed a previous distaste for Linux -- acquired the No. 2 SuSE Linux for $210m (£112m) in January.
Turning over the Linux leaf
Wind River previously was leery of Linux, expressing concerns about the intellectual property foundations of the open-source software. Instead, it tried in 2001 using another open-source Unix offshoot, FreeBSD, because of its more straightforward coexistence with proprietary software, but that effort failed later that year.
The company has changed course now, hiring Ken Klein as chief executive and joining several Linux-related groups: the Open Source Development Labs, the Eclipse Consortium and the Consumer Electronics Linux Forum.
Linux and VxWorks are largely complementary, not overlapping, argued David Fraser, chief marketing officer. VxWorks is good for small devices that must turn on very quickly, but Linux is good for high-end consumer electronics devices with hard drives and for replacing Unix in telecommunications servers, he said.
Finances have been rough for the Alameda, Calif.-based company. In the quarter ended 31 October, the company had a net loss of $6.9m. Though that was a narrower loss than $14.3m from the year-earlier quarter, revenue dropped over the same period from $58.3m to $49.6m.
Wind River reports fourth-quarter results Monday; the company projected positive cash flow from operations and a net loss of 4 to 8 cents per share.
