Acquisition of Open Source software based companies seems to be the current trend.

Sun ^[1]started it with the acquisition of MySQL AB ^[2].

Oracle ^[3]continued it with Sun’s acquisition.

Intel ^[4] followed suit, only this time to buy one of the top Embedded Linux companies, WindRiver ^[5]. Actually, it has been done before. WindRiver acquired FSM Lab’s RTLinux, the hard real-time OS, that was giving WindRiver’s VxWorks a run for their money.

Today, Cavium Networks has announced ^[6] that it has signed a “definitive agreement” to acquire MontaVista for $50 million, comprising $16 million in cash and the remaining $34 million in Cavium Networks common stock.

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MontaVista ^[7] , a Santa Clara, California based company was the leading developer of embedded Linux software and tools in the automotive, mobile phones   and communications equipments space. MontaVista was a regular contributor to open source software especially in the kernel and PowerPC ports. Arguably, one of the most valuable contributions made by MontaVista’s Robert Love ^[8] is the real-time kernel preemption patch , rendering the vanilla kernel with soft real-time capabilities.

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Cavium Networks ^[10] makes media, network and security processors based on the ARM and MIPS architectures. It too is a Silicon Valley based company. Interestingly enough, Cavium Networks, which is a publicly owned company was founded a couple of years after MontaVista.

Cavium Networks’ cloning of Intel’s move validates the relationship between processor companies and their attraction towards embedded Linux software companies. Another similarity in these deals is that both WindRiver Systems as well MontaVista will continue as separate operating unit retaining it’s brand name.

Syed Ali, President and CEO of Cavium Networks says “This acquisition will complement Cavium’s market leading processor portfolio with world-class software expertise and will enable us to deliver highly compelling and differentiated solutions to the market”.

Rusty Harris, President and CEO of MontaVista has the following explanation to offer “By becoming part of Cavium Networks, MontaVista can confidently continue to offer industry leading commercial grade embedded Linux, support and services to our customers and partners“.

The move for acquisition seems to be good news for all parties involved since the CEOs of both ARM ^[11] as well as MIPS ^[12]Technologies also seemed to be positive about the deal.

Any bets on what AMD might go shopping for ?