Microsoft Freshens Up Embedded Windows

Microsoft today unveiled a wide-ranging rebranding effort for its embedded OS offerings, designed to reduce complexity as the marketplace faces growing competition from Linux.

The announcement, made during the Embedded Systems Conference Silicon Valley 2008 in San Jose, Calif., comes as Microsoft (NASDAQ: MSFT) is working to stave off burgeoning rivalry in a space where it’s been playing for more than a decade.

New naming won’t kick in immediately for the all of Microsoft’s embedded products, however. Instead, each product’s moniker will change when it is updated to a new version.

It’s all part of an effort to provide an aura of unity across a somewhat fragmented product line, given how many different embedded operating systems the company offers.

“The naming has not been consistent,” Mike Hall, software architect for Microsoft’s Windows Embedded business, told

Although the embedded systems market is often overlooked or ignored by Microsoft watchers, the company has been in that business since it launched Windows CE.

Embedded systems are typically built into hardware devices — in products as diverse as digital cameras, medical devices, gas pumps, point of sale (POS) systems and automotive robots. Given the scope of the product segment, it’s quietly become a major area of focus for Microsoft.

“If you’d have said five to seven years ago that Microsoft was going to play a big role in embedded [systems], I think we would’ve just laughed and had a couple more beers,” Rob Enderle, principal analyst at researcher Enderle Group, told

“They do quite a bit of business in the embedded space [and] they’ve done surprisingly well over the years with ‘point of service’ when I thought that open source software was going to own the market,” he added.

However, recent years have seen Microsoft losing ground to competitors, and especially to the fast-growing Linux market. Retail technology research firm IHL Group said that while Windows dominates in the POS market — accounting for two-thirds of the $5.56 billion spent on POS terminals in North America during 2007 — Linux is quickly gaining traction.

The installed base of Linux-based POS terminals grew more than 32 percent during 2007, compared to overall market growth of 5 percent, IHL said. Embedded Linux terminals accounted for $475 million of the market, while IBM 4690 terminals came in No. 2 behind Microsoft, at $1.02 billion.

However, the meaning behind the numbers can be difficult to decipher, Greg Buzek, president of IHL, told For instance, he said, most of the growth of Linux usage in POS locations is on aging hardware that is expensive to replace, but doesn’t have the resources to handle running an embedded operating system — so it is run off a hard disk.

Previously, those systems would have mostly run on DOS.

“You’ve got some 386 and 46-based systems that are 10 or more years old that can run Linux … [but] if they were to go with Windows [Embedded], they’d have to update the hardware,” Buzek said.

IHL does not count those disk-based terminals as embedded since they run off a hard disk.

“With embedded operating systems only, you’re probably looking at 90 to 95 percent is Microsoft and 5 to 10 percent is Linux,” Buzek said.

A new look for embedded Windows

Under Microsoft’s renaming plan, Windows XP Embedded will be the first to receive a new designation. It will become “Windows Embedded Standard” when the company ships the next update on June 3, during Microsoft’s Tech Ed North America conference, according to a company statement.

Similarly, “Windows Embedded Compact” will become the new name for the next release of Windows Embedded CE when it ships next year. Microsoft delivered Windows Embedded CE 6.0 Release 2 (R2) in November.

Meanwhile, Microsoft also introduced Windows Embedded Enterprise, a new product category comprised of Windows XP for Embedded Systems and Windows Vista for Embedded Systems.

“It can be licensed for fixed-function devices such as print servers,” Hall said.

Meanwhile, Microsoft also announced that the next version of Windows Embedded for Point of Service will bear the moniker “Windows Embedded POSReady”, and will ship in 2009.

The company is also rumored to be working on an entry into the GPS-enabled navigational device market, but the company declined to comment.

The rebranding does not include XP for ultra low-cost PCs (ULCPC), announced earlier this month, since it isn’t an embedded application. Neither is Windows Mobile included directly under the “embedded” aegis.

“Windows Embedded Enterprise [is] … a fully application-compatible embedded operating system that over time will gain a broader set of embedded enabling features … and is licensed exclusively for embedded device development,” the company’s statement said.

Microsoft also announced during the conference that it is launching a software certification program for Windows Embedded CE 6.0 — marking the first Microsoft has offered certification in connection with the Windows Embedded line.

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