At the Embedded Systems Conference in San Jose, Calif., the software maker announced new programs aimed at helping manufacturers create appliances and devices based on Windows CE and the embedded version of Windows NT.
These operating systems run in all kinds of products--handheld computers, Internet-enabled refrigerators, gas pumps--including numerous new products that require Internet connectivity.
Embedded operating systems are generally invisible to the end user, running the basic functions of a device in the background.
Windows CE was designed to run a wide variety of equipment, and this lack of specialization has meant that the operating system is not particularly suited for any one environment, critics say. Further, outside development has been stunted by high licensing fees for the operating system.
For example, despite recent improvements, Microsoft does not yet offer true real-time operation, as do competing products from Wind River Systems, which are used in emergency medical equipment. At the other end of the spectrum, Windows CE-based handhelds have long languished in the retail market, trounced by the popularity of devices based on Palm's operating system, including the Handspring Visor.
Microsoft has spent most of this year retooling its strategy to become more competitive in these markets. The company pulled out of the market for real-time machinery, opting to focus instead on "intelligent" appliances with Internet connections, like handhelds and Internet-enabled gas pumps and refrigerators.
To achieve a complete makeover and separate itself from prior stumbles, the company split the Windows CE group and slashed licensing fees. Microsoft began calling its embedded software "Windows Powered" and re-branded its Windows CE-based personal digital assistants as Pocket PCs.
"The needs of our customers are very specific," said Megan Kidd, a product manager for the embedded software group at Microsoft. "To remain competitive, they have to get products to market quickly."
Microsoft will announce that it is working on creating an "ecosystem" of 200 developers, software partners and customers who can come together in its new online marketplace. This Windows Embedded Partner Program is focused on providing information and support to appliance makers.
"This will be a great resource for customers who may not be aware of the number of decisions they need to make in developing embedded products," said Deanne Hoppe, lead product manager for Microsoft's appliance division.
The company will revive its Windows CE developer conferences, which have lapsed for the past two years, with events in Las Vegas, Europe and Asia.
Microsoft also announced that it is releasing new add-on software for Windows CE 3.0, including new operating system components and system analysis tools. These software components, which include support for sharing Internet connections and Extensible Markup Language (XML), will be incorporated into future versions of Windows CE.
Since creating a new division specifically focused on providing software and services dedicated to these embedded appliances, Microsoft says it has increased revenue and shortened the time to market for the manufacturers of these products.
Microsoft has lagged in this market so far, marked by poor sales for Windows CE-based handheld computers. Windows CE is the underlying operating system used in Microsoft's new Pocket PC handhelds.
Microsoft released the latest version of Windows CE, 3.0, last month, slashing the price by up to 50 percent in an attempt to attract new customers.
"We're starting to understand the embedded market better and making adjustments within the business model, and one thing we've done is reduced the price," Hoppe said.