Wind River Acquires the Telenetworks Business Unit of Next Level Communications

ALAMEDA, Calif., October 10, 2001 — Wind River Systems, Inc. (Nasdaq:WIND), a leading provider of software and services for connected smart devices, today announced that it has purchased the assets of the Telenetworks business unit from Next Level Communications, Inc. (Nasdaq: NXTV). The Telenetworks business unit supplies embedded networking software products to telecommunications equipment manufacturers. As part of this agreement, key Telenetworks employees will join Wind River. Financial details of the transaction were not disclosed at this time.

"The acquisition of Telenetworks allows us to offer original equipment manufacturers complete, well-supported converged voice/data solutions that speeds their time to market, lowers development costs, and reduces risk while leveraging the capabilities of the legacy voice network," said David Fraser, group vice president and general manager of Wind River's Networks business unit. "The networking assets we acquired from Telenetworks fit nicely into Wind River's product strategy, which is based on providing our customers with a comprehensive suite of embedded operating systems, software components and development tools."

This acquisition of voice-over-IP (VoIP) and telecommunications signaling technologies strengthens Wind River's position as the leading individual supplier of embedded networking solutions. The principle products acquired in the transaction include software stacks that implement the signaling and control mechanisms used in VoIP networks. Wind River will also acquire a comprehensive set of SS7 and ISDN signaling stacks – protocols that are used widely throughout the current telecommunications network infrastructure. Used in conjunction with Wind River's portfolio of embedded networking technologies, operating systems, and development tools these new products will provide manufacturers with a complete environment for developing new converged voice/data networking equipment, such as VoIP terminals, VoIP-enabled enterprise switches, integrated access devices, media gateways, and softswitches.

Converged voice/data services are an important offering from telecommunications service providers, as they look to reduce costs, expand services and upgrade their networks from traditional circuit-switched technology to IP packet switching. The market for such softswitches alone totaled $364M in 2000, and is projected to grow to $4.3B by 2004, according to The Yankee Group.

About Wind River Systems
Wind River is a 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, digital consumer electronics, networking, medical, computer peripherals, automotive, industrial automation and control, and aerospace/defense markets. Wind River is how smart things think™. Founded in 1983, Wind River is headquartered in Alameda, with operations worldwide.

Wind River Systems and the Wind River Systems logo are registered trademarks or trademarks of Wind River Systems, Inc. Next Level Communications and the NLC logo are trademarks or registered trademarks of Next Level Communications in the United States and other countries. All other names mentioned are trademarks, registered trademarks or service marks of their respective companies. This release contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, including Wind River's expectation for the integration of the Telenetworks business unit into Wind River, expectations for development of new product solutions, and anticipated market size in the softswitch market. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that realistically could cause results to differ materially from those projected in the forward-looking statements are set forth under "Risk Factors" in Wind River's Form 10-K for the fiscal year ended January 31, 2001.

Contact Information
Jessica Miller
Global Corporate Communications