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Xerox helps Microsoft see beyond the PC

If Microsoft is going to move beyond its Windows-centric view of the world, it needs partners like Xerox, according to Steve Ballmer, the company's president.

PALO ALTO, California--If Microsoft is going to move beyond its Windows-centric view of the world, it needs partners like Xerox, according to Steve Ballmer, the company's president.

As the software giant today unveiled an alliance with copier behemoth Xerox, Ballmer highlighted Microsoft's evolving strategy to integrate its Windows operating software into new computing technologies. The move also underscores Redmond's broader strategy shift, adopted in the aftermath of Ballmer taking the post of president last summer.

Under terms of the alliance, the two companies will integrate each other's software so that printers, faxes, and copiers can better communicate across a network. As part of the deal, Xerox will license Windows NT Embedded, a version of Microsoft's corporate operating system intended for a wide array of devices, such as network hardware or industrial machinery.

Microsoft also plans to license Web-based user interface technology being developed in Xerox's renowned Palo Alto Research Center, or PARC.

Microsoft underwent a sweeping reorganization in March, the first example of Ballmer's vision to align Microsoft according to customer needs, rather than technology needs.

"The partnership we're announcing with Xerox is an important one," Ballmer said at a press conference here. "We're trying to be a part of providing people with the power to do what they want, where and when they want to do it, on any device connected to the Internet.

"It's very important evidence of this vision we're pursuing," he said.

Xerox executives said the move will allow the company to better meet the needs of "knowledge workers," a term given to those who work heavily with computers and information. Rick Thoman, president and chief executive of Xerox, said the idea of so-called knowledge management remains an "elusive goal."

The partnership also feeds into Microsoft?s own thrust at knowledge management. The software giant is increasingly positioning elements of its server-side software applications as key tools to deliver a more unified information networks.

Analysts noted that Microsoft needs to extend its software expertise into unfamiliar new markets, where different operating systems and devices can communicate in a peer-to-peer fashion. This style of computing is behind many of the strategy plays in the industry these days, with Microsoft touting Universal Plug-and-Play technology and rival Sun Microsystems banging the Jini programming language drum, for example.

"Basically, this is a ubiquity play," said Jean Bozman, software analyst with market researcher International Data Corporation.

"It could be argued that this world coming up could be tough on Microsoft," Bozman said, noting Microsoft's strategy to leverage its current technology to gain a broader role as computing devices proliferate.

See related story: The new world order Xerox plans to license Windows NT Embedded for future versions of its document "hub," the Document Centre. The company also plans to integrate its products with Microsoft's Exchange messaging software system, allowing the Xerox Document Centre to scan documents and send them via email.

Those two portions of the alliance may offer a taste of what is to come, according to analysts, as various versions of Windows and Microsoft's accompanying back-end systems are positioned as compatible with non-Windows technologies.

"They're painting a picture that it could be a lot broader than this," Bozman said.

As part of the deal, Microsoft intends to license Xerox's WebForager interface technology, a tool that allows users to view Web pages as if they were looking through a book. Microsoft said the interface will be added to 3-D technology being developed in the company's research labs.

Xerox Connect, the company's consulting and services organization, will also become a Microsoft services partner, a potentially lucrative designation for the copier giant.