Intel is buying Wind River for roughly $884 million in cash, $11.50 a share, a 44% premium.

The move into software will give Intel VxWorks, Wind River's proprietary and multi-core-ready RTOS, and its commercial-grade Linux operating system as well as its middleware and software design and device testing tools.

Wind River claims to be the global leader in Device Software Optimization (DSO) and enables companies to develop, run and manage device software faster, better, more reliably and for less money from concept to deployed product.

Intel, which created and released the Linux-based Moblin operating system for Atom-based netbooks to the Linux Foundation - reportedly with help from Wind River - says it wants the embedded operating systems house to back its play in embedded systems and mobile handheld devices so it can be more independent of the old traditional who-knows-where-they're-going PC and server markets.

That means stuff like smart phones, mobile Internet devices (MIDs), consumer electronic devices, in-car "info-tainment" systems, networking equipment and aerospace and defense, energy, a multibillion-dollar market.

Wind River will become a wholly owned subsidiary and continue doing what it's doing with its widgetry more tightly aligned to Intel platforms going forward.

Wind River CEO Ken Klein, however, said the company would still support multiple hardware architectures.

Wind River does business with Intel rivals such as ARM, Broadcom, Freescale, IBM, NEC, Qualcomm, Sun, TI and Xilinx.

The acquisition is supposed to close this summer. The unit will report into Intel's Software and Services Group, headed by Renee James.

Wind River did $359.7 million in revenues, up 9.5%, in the year ended in January earning $10.8 million after losing $2.4 million the year before. In March, it said fiscal 2010 revenue should be $360 million-$380 million.

It's been around since 1981 and has 1,600 employees worldwide. It claims thousands of customers including Alcatel-Lucent, BMW, Boeing, Bombardier Transportation, Mitsubishi, Motorola, NASA, Sony and Verizon.

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