Wind River Systems Continues to Sharpen Focus on Internet-Driven Post-PC Era.

ALAMEDA, Calif.--(BUSINESS WIRE)--Aug. 19, 1999--

Business Units Created to Focus on Growing Networking Market and

Professional Services; Core Technologies Broadened

Wind River Systems (NASDAQ:WIND) today announced an organizational change that brings increased focus on meeting the needs of OEMs building products for the complex and time-crunched global post-PC era. Effective immediately, Wind River will expand its organizational structure to include targeted business units. This move is the latest step in an on-going process to ensure continued leadership in a rapidly changing industry.

To further capitalize on the high-growth Internet-related markets and better serve its customers' growing need for increased development assistance, the first two Wind River business units are Wind River Networks and Wind River Services. Wind River will also continue to strengthen and extend the Tornado(TM) development platform, VxWorks(R) real-time operating system and other core technologies for both traditional customers and Value Added Resellers.

What is usually referred to as the embedded market is actually a multitude of vertical market segments such as telecom/datacom equipment, industrial control, military/aerospace, and digital imaging that use embedded technology in product development. In general, all of these markets are being affected by the rise of the Internet and cheaper microprocessors resulting in increasingly complex products and "Internet-time" development cycles. Each individual market, however, has increasingly divergent development needs and varying growth rates. While continuing to serve the broad, horizontal embedded sector with its industry-leading Tornado and VxWorks platform, Wind River is augmenting its strategy by focusing on high growth, high value market segments. For these segments, Wind River will deliver complete solutions products such as Tornado for Managed Switches that will be developed in the various business units.

"In the 1980's and 1990's, Wind River has been able to stake out its market leadership position purely by developing our core platform," said Jerry Fiddler, chairman and interim CEO of Wind River Systems. "But the growth and change in the embedded market create a tremendous opportunity in key vertical areas, and we need to evolve our approach for these markets. Success will depend on our ability to put together very complex, market-specific technologies in easy-to-use packages. We believe that the focused approach of the business unit organizational model is the best way of achieving these objectives."

Wind River Networks

Networking and communications are now pervasive in embedded applications. Spurred by the Internet, the convergence of voice and data, changing usage patterns, and increasing bandwidth, networking is the critical, common element in the post-PC era. Wind River's networking business unit, the first of several potential such organizations, is committed to building high-value, targeted solutions that provide competitive advantage for the manufacturers of post-PC products. Specifically, this group will focus end-to-end on the Internet: advanced server technology, utilizing intelligent I/O (I2O) in storage and dedicated server applications; network infrastructure technology, including managed switches and access equipment; and - using Java as an open platform - the new breed of Internet appliances, providing more convenient means to interact with the Internet.

The complete solutions fielded by Wind River Networks will leverage technology from Wind River's Core Technologies group and the recent acquisitions of RouterWare and Xact. Wind River Networks will be led by David Fraser, who assumes the title of vice president and general manager.

Wind River Services

The second business unit being created is dedicated to delivering services ranging from full-scale professional consulting, design and development to training and customer support. The growth of the embedded market has led to a remarkable decrease in product life cycles, forcing companies to develop and ship products under extreme time-to-market pressures. To help alleviate the stress associated with these changing market dynamics, Wind River created the Professional Services Program earlier this year. Now that Program is being merged with customer services for a comprehensive approach to meeting customers' product development needs.

This business unit, called Wind River Services, provides the final piece in the company's commitment to help customers deliver powerful embedded applications with fast time-to-market. Under the guidance of Kamran Sokhanvari, vice president and general manager of the business unit, Wind River will utilize both internal resources and external partner organizations to deliver an industry class portfolio of services that will cover a diverse technological and geographical area helping to fuel the explosive growth of this market.

Core Wind River Technologies

The mainstay of the Wind River engineering organization will now be called the Core Technologies group, upon whose technology Wind River's customers have already deployed millions of products. By consolidating all Core software engineers into one organization, Wind River will be able to concentrate on optimizing the foundation technology for the post-PC era. This will allow Wind River to serve the horizontal embedded market with the creation and integration of an easy to use, secure, reliable and robust platform.

Products developed by Core Technologies include the Tornado development platform, the VxWorks real-time operating system, the WindPower(TM) tools, and embedded Internet and Java technologies. These products will be provided to traditional OEMs, and will also act as the starting point for Value Added Resellers and solution products developed by business units. Core Technologies will be led by vice president of platform engineering John Fogelin who wrote the wind(R) microkernal, which is the basis of VxWorks.

Wind River Systems, Inc.

Wind River Systems, Inc., http://www.windriver.com, is the worldwide leader in embedded software. Wind River provides software development tools, real-time operating systems, and advanced connectivity for use in products throughout the Internet, telecommunications and data communications, digital imaging, networking, medical, computer peripherals, automotive, and aerospace/defense markets. Wind River is how smart things think. Founded in 1983, Wind River is headquartered in Alameda, California, with operations in fifteen countries worldwide.

This news release contains forward-looking statements which include statements regarding the market potential of our business. Actual results or outcomes could differ materially from those contemplated by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the market price of the company's common stock and other factors described in the company's most recent Form 10-K and other periodic filing with the Securities and Exchange Commission. Wind River undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Note to Editors: Wind River Systems, the Wind River Systems logo and VxWorks are registered trademarks of Wind River Systems, Inc. Tornado is a trademark of Wind River Systems, Inc. All other names mentioned are trademarks, registered trademarks or service marks of their respective companies or organizations.