On April 25, Microsoft made some important announcements to its hardware developer partners at the Windows Hardware Engineering Conference (WinHEC) 2000 in New Orleans. Most important, Microsoft has formed a 500-person development group to focus on the embedded OS space, deployment strategies, and strengthening the Powered by Windows brand name. The Windows 2000 Embedded development efforts are gone. The new development group will deliver an embedded OS based on the upcoming Whistler OS, which will appear late in 2001; Microsoft will release the Whistler embedded OS about 90 days later. Microsoft will release a Win2K Appliance Kit and follow it with a high-end embedded OS release in about 18 months, delaying Microsoft's assault on the high-end embedded OS marketplace. The Win2K Appliance Kit will contain the same tools and technology that Microsoft used in IBM and Dell information appliances—customized versions of Win2K in which Microsoft has disabled, but not removed, parts of the OS to create a smaller footprint. In contrast, Microsoft made NT Embedded 4.0 highly componentized, an approach that developers in this market prefer. Lineo, for example, a Linux pioneer in the embedded space, has a modular construction. The Win2K Appliance Kit is due in June and will primarily target Web servers, Network Attached Storage (NAS), and small business appliances. Microsoft Vice President Bill Veghte, formerly general manager of the Windows 9x and Millennium groups, will head the new Embedded and Appliance Platforms Group, an important growth area for Microsoft. Veghte's group will handle all embedded-system development, deployment tools, and the marketing function for embedded systems. Microsoft also unveiled its embedded and appliance platform strategy. Microsoft will deliver "32-bit and beyond" customized OSs that let complex applications run on embedded platforms and provide Internet services. One analyst interpreted "and beyond" to mean that Microsoft is working on a 64-bit embedded OS. If so, it would be a highly valued component in industries such as telecommunications, where dedicated appliances run expensive versions of UNIX. The embedded marketplace differs radically from the desktop marketplace where Microsoft has been so successful. Often, embedded OSs are cheap; many times, they are free; and often, custom products appeal to small audiences. Equally often, the pricing and volume model for embedded OSs has the opposite of these traits—expensive and manufactured in large-volume chip runs. It's difficult for a vendor to create a uniform pricing strategy under these conditions. When speaking of future plans for the embedded marketplace, a Microsoft spokesperson said: "As part of its strategy to offer a broad range of solutions to meet the diverse needs of embedded and appliance customers and partners, Microsoft is committed to creating a flexible business model that allows industry partners to easily engage and utilize the pieces of the Windows embedded technology portfolio that they need to meet their resource and time-to-market requirements. In addition, the strategy will encompass a new branding effort that is designed to simplify and unify all the Microsoft embedded and appliance solutions under a single brand: Windows Powered. This new brand will communicate to customers the reliability, richness, ease of use, and connectivity associated with the Windows embedded family." The market for embedded OSs is large, dwarfing that for PCs, and it will grow exponentially as companies add intelligence to devices as diverse as cars, refrigerators, houses, and Internet appliances. No OS software vendor wants to be left out of this market. Veghte said, "The market is rapidly moving toward connected devices that offer rich Internet services and applications, and with this new focus and organization, Microsoft is committed to enabling this shift to happen. The Windows embedded family offers an incredibly rich technology portfolio. Coupling this breadth of technology offerings with aggressive componentization and a flexible business model offers an exciting opportunity for our partners." Veghte continued, "The Windows embedded family of technology adds a unique value to the embedded and appliance marketplace. Windows-based solutions offer the richest platform for dynamic applications and Internet services, a consistent programming model and familiar development tools, tight interoperability and migrations between devices, and seamless access to applications and Internet services." Microsoft will broaden its family of embedded technologies, which includes NT Embedded 4.0 and Windows CE 2.12, with several new products: Windows CE 3.0, Windows CE Platform Builder 3.0 (now in release candidate, with a June release), and eMbedded Visual Tools 3.0 will release into this marketplace. eMbedded Visual Tools contains embedded versions of Visual Basic (VB) and Visual C++. Microsoft will distribute millions of copies of its Windows CE development software free, with payment required only when a product is shipped. It's not quite the open-source model that Sun uses with Java, but it's close. It's Microsoft's attempt to stem the rising tide of Linux in the low-end embedded marketplace. Microsoft will make Windows CE 3.0 more modular and give it realtime support, multimedia functionality such as the DirectX API and Windows Media, new Internet capabilities, and DCOM support. You can obtain an evaluation copy and full shrink-wrapped copy of Windows CE Platform Builder 3.0 in June. The Windows CE Platform Builder 3.0 will include eMbedded Visual Tools 3.0, which will also be available via the Internet.