Intel Buys Wind River To Put a Computer In Every Toaster

imagesIntel (s intc) today said it plans to acquire Wind River Systems (s wind) for $884 million — a deal that gives the world’s largest chipmaker control of development software and operating systems for devices that range from cell phones to routers. Intel last year made a big to-do about getting into the embedded market that supplies chips for consumer electronics, cars and industrial uses. It’s also planning to bring its low-power Atom x86 chips to cell phones by adding cellular radios. Wind River helped Intel adapt its Moblin OS for mobile Internet devices. Intel’s move isn’t only about growing into new markets, it’s also a sign that the computer is continuing to move further beyond the data center and desktops.

All sorts of electronics (yes, even your toaster) are growing more complicated, and more of them are also are getting connected to the web (not yet on the toaster), which means they are able to send and receive data. Once that happens, they need bigger brains to manage and react to that flow of information. Hence the need for smarter embedded chips, and Intel’s efforts to take its brand of x86 general-purpose computing to all devices.

The purchase of Wind River also gives Intel a customer base that includes the automotive, consumer electronics and industrial companies to which it wants to sell its embedded chips, giving it access to the customer base that buys embedded chips. Intel’s move into the market will be highly contested by the likes of Texas Instruments (s txn), Freescale and ARM (s armh), which are already selling into the embedded and wireless spaces. Those companies, which currently use Wind River’s software, may try to stop Intel’s ownership of Wind River, and will certainly see it as a serious threat. This deal is an aggressive move by Intel to ensure that it doesn’t have to contemplate a world where its x86 chips are no longer dominant.