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Windows NT to extend reach

Microsoft wants customized versions of Windows NT for "embedded" systems such as health and communications equipment.

Microsoft will announce its intentions next week to license technology from a company called VenturCom to facilitate the creation of custom versions of its Windows NT server-based operating system for so-called embedded software markets.

The latest move by the software giant feeds into the company's plan to drive its NT software into as many markets as possible, feeding growth within the company well into the next millennium.

Microsoft recently expressed its intentions to take Windows NT into the embedded systems markets. VenturCom's Component Integrator software development tool will allow third parties to build versions of NT tailored to specific functions. VenturCom ships tools for both NT and Microsoft's CE operating system for consumer devices.

Under the terms of the deal, Microsoft will license VenturCom's technology and invest in the firm, allowing VenturCom to expand its consulting, service, and support arms to handle increased demand. Financial terms were not disclosed.

Likely targets for embedded NT include retail point-of-sale settings, industrial or office automation, health care equipment, or communications. A slimmed down version of NT could also more directly target the networking equipment market, where an optimized software "engine" is necessary to complete routing and switching functions.

Some networking firms, including start-up Berkeley Networks, are already using NT for their Intel-based networking switches.

VenturCom's Component Integrator tool essentially breaks various functions built into NT down to component parts, such as network support, remote access services, or hardware drivers.

"We feel this is a justification for everything we've been doing for a few years," said Michael Dexter-Smith, CEO of VenturCom. "This represents the opening of the floodgates for this market."

Microsoft executives said embedded NT is best suited for markets in which various devices need to talk to each other across a network. "Clearly, NT is not the best solution for all embedded applications," said Bob O'Brien, lead product manager for BackOffice. "NT is geared for various interconnected types of devices."

Companies that may feel the heat from the new NT focus include WindRiver Systems and QNX Software systems, two makers of embedded software for networking devices and other systems.

Sun Microsystems also has pushed its Java programming language as an alternative for the embedded software market, though much of the company's marketing efforts seem to be currently focused on communications devices such as cellular telephones.

Industry watchers believe Microsoft's entry into the market does not signal the end for established players due to the heterogeneous nature of various devices running software. "The prevalence of embedded solutions is very broad and very different. This might work in some markets," said Paul Zorfass, an embedded market analyst with International Data Corporation.

Announcement of the deal will be made by Microsoft executive vice president Steve Ballmer at next week's Retail Systems '98 trade show in New Orleans.