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Embedded NT en route

An upcoming version of Windows NT optimized for embedded settings is in the works, underscoring the bet the firm is making on its future cash cow.

News of a forthcoming version of Microsoft's Windows NT operating system optimized for embedded settings--such as the underlying software to run networking devices--continues to emerge, underscoring the major bet the software giant is making on its cash cow for the new millennium.

Jim Allchin, Microsoft's senior vice president for its personal and business systems division, told a crowd of networking professionals last week in Las Vegas that the firm was working on an embedded version of NT tailored for background operations--such as networking equipment like low-end switches and routers.

The move would give Microsoft a presence at the desktop, server, and the "edge" networking space, where computers attach to networks and the Internet to share information. Allchin also mentioned application for the embedded version of NT in automation systems for the home.

"We are definitely going down this path," Allchin told a throng of information technology professionals at last week's Networld+Interop trade show.

An embedded version of NT would also be useful in various kiosks, industrial machines, or business-class handheld devices, like those used in rental car settings.

Allchin told CNET's NEWS.COM in an interview last fall that Windows NT could easily be used as an operating system for networking equipment, but the company would leave it up to third parties to develop that market for NT.

"There are a number of companies who believe NT is a general-purpose system and, as such, could be used in a commodity way for a switch or a router," Allchin said at the time.

"They will use NT and we will OEM NT to them, so then it's going to be up to them. There's going to be a lot of companies OEMing NT and using it as an embedded system in that way," he added. "That's something we're going to let them do. We're not focused on that ourselves right now."

VenturCom and RadiSys have both released subsystems for Windows NT that allow for the "real-time" execution necessary for the operating system to work effectively in a network switch, for example.

The low end of the networking market, dominated by the likes of 3Com, is already experiencing rapid commoditization. One sign of this development is the entry of volume-style players such as Compaq Computer and Intel into the space, where prices to continue to drop for shared "hubs" and small switches at a startling rate.

Start-up networking equipment maker Berkeley Networks is now shipping a device that uses standard versions of Windows NT 4.0 as an embedded operating system. Third-party applications must be qualified to work with the Berkeley switch.

But company executives said the forthcoming embedded version--reportedly due to be rolled out next month--could fit nicely with the company's low-end plans, where tie-ins with the services of the full-blown version of NT are not necessary. "We will look at that very closely," said Kamal Anand, director of marketing and business development at Berkeley.

Microsoft has already had great success with NT as a client operating system for corporations. The company also continues to make inroads for the server-based version of the software, pitching it as a general purpose operating system for Web-based applications. Microsoft includes support for various basic networking and routing functions via two add-ons to NT.