Expressing software inside a chip, then selling the chip, gives embedded Linux a business model, but that business model is tied closely to the success of the chip being sold.
LinuxPundit Bill Weinberg is troubled by this, but not for the reason you think. Very few of these companies are left now, and those are very small. But Weinberg is concerned more that Montavista failed to bag the really big bucks it was seeking at its founding 10 years ago.
What embedded Linux means for users and software developers is that there are open source on-chip tools you can write to and use for building bigger applications. Who controls the embedded Linux company is less important than that it succeed.
Cavium is considered a "start-up" networking chip company, but it's doing some cool and interesting stuff.
This month Cavium showed a networked high-definition WiFi design, dubbed netHD, that can move 1080 HD feeds around your home on an 802.11n set-up. It's working with Hitachi on "security processors" and drives the latest Netgear firewall. Despite continuing losses stock buyers have bid the company up to $850 million.
One can argue that, while Montavista hoped to sell for more, its investors are now getting a taste of a fast-growing proposition. And their success, Cavium's success, will be open source's success as well.
NOTE: My apologies to those who like to engage in flame wars here, for delivering a story that contains nothing but good news. How about this....Microsoft! (Stallman?)