Wind River swaps hands (again) for $4.3 billion

Ray Le Maistre
By Ray Le Maistre

Jan 11, 2022

Wind River CEO Kevin Dallas (left) with Aptiv CEO Kevin Clark

Wind River CEO Kevin Dallas (left) with Aptiv CEO Kevin Clark

  • Wind River has been making great strides with its distributed edge cloud management capabilities
  • It is being sold by private equity firm TPG, which acquired Wind River from Intel in 2018, to smart vehicle technology giant Aptiv for $4.3 billion
  • Aptiv believes the acquisition will help it with its software-defined strategy for the automotive industry
  • But Wind River will continue with its developments in other key sectors, including telecoms

Less than four years after acquiring Wind River from Intel for an undisclosed sum, private equity firm TPG has agreed to sell the distributed edge cloud management software specialist to smart vehicle technology giant Aptiv for $4.3 billion in cash. 

Aptiv believes Wind River’s cloud native Studio platform, designed to manage distributed network architectures, can help it with its strategy to develop software-defined systems for the automotive industry, which is the key focus of its existing $15 billion-a-year turnover business, but it also sees significant growth from Wind River as a standalone operation. 

And, importantly for Wind River’s users in the telecoms sector, which currently generates about 15% of its annual revenues (so about $60 million) Aptiv has every intention of further developing Studio for multiple industry verticals, especially those already targeted by Wind River in recent years – aerospace and defense, telecommunications, industrial and automotive. Wind River’s most high-profile telecoms customer right now is Verizon, which is using Studio to manage its vRAN 5G deployment

Wind River is currently generating annual revenues of $400 million (with EBITDA margins above 20%), but Aptiv believes that will increase to a $1 billion annual turnover by 2026 as demand for “intelligent edge software” increases. In fact, Aptiv believes (based on forecasts by IDC) that the intelligent edge market will grow from a value of $50 billion in 2021 to be worth $80 billion in 2026.

And Aptiv is a firm believer that the edge management capabilities required across the different vertical sectors is very similar. 

“Although one might initially think the compute needs of the aerospace industry differ significantly from that of the telecom industry, the requirements of operating a cost-effective network of intelligent edge devices results in a consistent set of challenges across these industries,” stated Aptiv CEO Kevin Clark during an investor presentation on Tuesday. 

“Wind River excels at addressing these challenges. Over the past five years, Wind River has proven this with the rollout of Wind River Studio cloud platform, [which is] designed to manage globally distributed 5G networks. This platform, which provides a unifying infrastructure, software orchestration and analytics capabilities, allows 5G networks to virtually manage thousands of edge devices. The network virtualization not only allows for a faster deployment of 5G technologies, but also affords the network operator significant cost savings. This solution is currently deployed by some of the largest mobile operators around the world,” noted Clark. 

And the CEO noted in the official acquisition announcement: “With Aptiv and Wind River’s synergistic technologies and decades of experience delivering safety-critical systems, we will accelerate this journey to a software-defined future of the automotive industry. In addition, we are committed to further strengthening Wind River’s competitive position in the multiple industries it serves.”

And this is a big day for the Kevins of this world, as Wind River’s CEO also sports that celtic forename. 

“Wind River has established itself as a worldwide leader in cloud-native, intelligent edge software that delivers the highest levels of security, safety, reliability and performance,” noted Kevin Dallas, President and CEO of Wind River. “Combining Wind River’s industry-leading software, customer base and talent with Aptiv’s complementary technologies, global resources and scale will realize our vision of the new machine economy,” he added. (You can see what Dallas had to say about the need for intelligent edge software in 5G networks in this TelecomTV interview.)

For the automotive sector, Aptiv will combine Studio with its existing SVA (Smart Vehicle Architecture) platform and pitch that into the automotoive software market, where Aptiv believes its total addressable market (TAM) will increase from $30 billion in 2019 to $90 billion by 2030. 

- Ray Le Maistre, Editorial Director, TelecomTV

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