The Redmond, Wash., software giant is developing the operating system, called Windows XP Embedded, in partnership with Bally's video casino-game organization, Fujitsu-Siemens' set-top box group and Siemens' factory robot group, said Kim Akers, director of Microsoft's embedded and appliance group.
"It has not been a top priority of Microsoft in any way. I don't think they've fared particularly well," said Summit Strategies analyst Dwight Davis. "Particularly in light of the fact that many companies have been adopting Linux as their embedded operating system, Microsoft doesn't want to leave that market uncontested."
Microsoft is aiming to spread its Windows software into as many devices as it can, a move that would increase the company's revenue and make Windows even more common as the foundation on which programmers and software companies base their work.
Microsoft selected the partners for this Rapid Development Group based on the firmness of their plans to release products using the version of Windows, Akers said. Though the companies won't get to look at the closely held source code that underlies Windows or get paid for their debugging help, they are expected to help uncover bugs and performance problems Microsoft overlooks, she said.
But Microsoft has had a harder time extending its software dominance into the embedded market, dominated by less well-known companies such as Wind River Systems, and the server market, where Unix systems and even older mainframe computers still rule the roost.
And as Microsoft pushes harder in the embedded computing market, it's coming up against a familiar rival from the server market: Linux. Though it hasn't encroached much on Microsoft's stronghold on desktop computers, Linux has spread rapidly to the embedded market, with backing from Red Hat and many smaller companies.
A new approach
But Microsoft is taking a different approach with Windows XP Embedded than it did with its predecessor, Windows NT Embedded. Where NT Embedded showed up 18 months after NT with extensive modifications, XP Embedded will be released within 90 days and uses the same software base, Akers said.
"The embedded version is getting built at the exact same time as the general-purpose version," Akers said.
The first versions of Windows XP are due in the second half of the year. It's the successor for Windows 2000, itself based on Windows NT. XP, unlike Windows NT and 2000, also will include a version for home users whom Microsoft previously steered toward Windows 98 or Millennium Edition.
Gartner analysts Michael Silver and Thomas Bittman say Microsoft has not focused on the embedded software market in earnest.
Microsoft also is working on turning the server version of the Windows 2000 sequel into an embedded operating system. Instead of being used in client devices such as set-top boxes and casino games, the embedded server version will be used in networking devices and special-purpose servers, Akers said.
Microsoft's NT Embedded has largely been a flop in these special-purpose servers. More successful has been a version of Windows 2000 that computer makers such as Compaq Computer, Dell Computer, IBM and Maxtor have customized to their own liking to a certain extent. That package, the server appliance kit, will be folded into the embedded server version, she said.
As with the client products, Whistler embedded server should ship within 90 days of Whistler server, Akers said.
In addition to the Whistler products, Microsoft has another embedded operating system, Windows CE, which is used for small mobile devices such as Pocket PC-based handheld computers competing with Palm.
It may sound like a lot of operating systems, but Microsoft actually will have a simpler time of it once it unifies on the "Whistler" code base of Windows XP and its as-yet-unnamed server cousin, Davis said.
"Having that consistency at the kernel level is good for Microsoft in keeping its costs down," Davis said. Customers also like it: "People don't want nonstandard variants of Windows."