[Updated 1:50PM] — The first company to focus on embedded Linux as its primary business has begun the process of replacing its CEO, a boardmember has confirmed. MontaVista founder and president James Ready is expected to serve as CTO once a replacement CEO has been installed, said boardmember… Stuart Phillips, formerly of US Venture Partners.

“The Board decided, together with Jim, that it was time to bring in someone who can help turbocharge and take the company to the next level. The board of MontaVista, which includes Jim, has as its charter what is in the best interests of all the shareholders,” said Phillips.

Phillips added, “Jim continues to be the technical and strategic visionary behind the company.”

One of the original embedded industry pioneers, Ready in 1980 co-founded Hunter & Ready Systems, which marketed the first popular commercial real-time kernel, VRTX. Ready founded MontaVista in 1999, just as Linux was beginning to gain prominence in other computing markets, such as servers and desktops.

Many MontaVista observers expected Kelly Herrell to be next in line for the top leadership spot. Herrell was hired as Senior Vice President of Strategic Operations in May of 2004, after serving as marketing VP at Cobalt, a maker of Linux-based network appliances that was acquired by Sun MicroSystems. However, Herrell was one of two relatively senior employees who tendered resignations on Tuesday, confirmed Peder Ulander, MontaVista's marketing VP.

The other departure comfirmed by Ulander was that of Hitoshi Arima, former GM of MontaVista's recently expanded Japanese office. Arima, who led the Tokyo office since its launch in 2000, reportedly left after a VP of Asian Operations was hired over his head.

In light of Herrell's departure, several MontaVista observers have pointed to boardmember Phillips as a candidate for CEO. Phillips neither confirmed nor denied his CEO candidacy, but did affirm his commitment to MontaVista, saying he would continue to advise the company, should US Venture Partners appoint a new representative on MontaVista's board. Phillips said he left US Venture Partners in order to launch a venture fund of his own, but that he continues to represent US Venture Partners on MontaVista's board, for now.

In a mid-2004 interview with LinuxDevices, Ready called MontaVista “cash-flow positive,” and said he expected to reach profitability in 2005. However, no profitability announcements have been forthcoming — although in fairness, a privately held company is not obliged to report its financial outlook.

MontaVista accepted $7M in investments in the Spring of 2004.

This story was corrected at 1:50 to reflect the actual departure of two senior employees, rather than five, as originally reported.

 
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