Research Triangle Park, NC — (press release) — Red Hat completed the acquisition of privately-held WireSpeed Communications Corporation, a developer of network and telecommunications components for embedded systems software. WireSpeed will scale Red Hat's embedded systems business, which is enabling top companies worldwide to quickly create and deploy next-generation Internet infrastructure solutions,… including appliances, handhelds, and other post-PC and deeply embedded devices.

The transaction was valued at $30.5 million based on an average closing price of Red Hat's common shares for a five-day period ended June 15, 2000. Under the terms of the transaction, Red Hat issued 1,525,365 shares of Red Hat common stock in exchange for all of the outstanding securities of Huntsville, Alabama-based WireSpeed. The acquisition has been accounted for as a purchase.

International Data Corp. (IDC) research predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs. Connecting these devices to the Internet and private networks will be essential.

Matthew Szulik, president and chief executive officer, said, “The addition of WireSpeed extends our strategy of providing expertise in embedded, networked and handheld devices that connect to one other over the Internet. In working closely with companies such as Hitachi and Fujitsu to develop next-generation computing devices, we are finding that there is a rapidly increasing demand for embedded systems software, particularly in telecommunications and networking.”

Open Source Momentum

International Data Corp. (IDC) research states that paid Linux shipments grew faster than any other server operating system over the past two years, and their preliminary figures for 1999 show Linux shipments hold 24.6 percent of the server operating system market, up from 15.8 in 1998. IDC also states that Red Hat holds 50.2 percent of Linux vendor market share and that Red Hat Linux is by far the most popular distribution, preferred by 68.7 percent of U.S. Linux users.

Research firm Netcraft, Inc., states that as of May 2000, 36 percent of all public Web sites run on Linux-based operating systems, making Linux the most popular choice for deploying public Web sites. IDC research shows 40 percent of all spending on Linux servers is for Internet related applications, firmly entrenching Linux servers in the Internet infrastructure.

Finally, IDC predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs.

Related stories:
Red Hat makes another embedded Linux acquisition
New 1-chip solution for networked Linux appliances
WireSpeed Announces Embedded Linux Product Development Services

 
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