Windows CE Spawns an Array of Devices

Still seeking a home in users' hearts and hands, Microsoft's small-footprint operating system, Windows CE, is spawning an array of devices. Vendors last month showed off pen-based, handheld PCs and new Win CE 2.11 devices. This last form factor, formerly code-named "Jupiter," is characterized by $999 systems with nearly full-sized keyboards, large LCDs, and a battery life of 10 to 12 hours. Although some Jupiter-class devices have begun shipping, they are expected to hit the retail shelves in volume later this month and early next year. But amid this flowing of new devices, questions are again being raised about CE's positioning as a "PC companion."

Oracle chairman and CEO Larry Ellison has said Microsoft made a critical mistake in producing a slimmed-down version of Windows. "I think the next really big desktop OS is Win CE," said Ellison. A vocal proponent of thin client/server architectures, Ellison said it is inevitable that conventional desktop operating systems, specifically Win 98 and 2000, will give way to browsers attached to industrial-strength (read, Oracle) servers. Self-serving as his analysis is, Ellison may have a point, according to some analysts. Indeed, Microsoft is already under pressure to beef up CE. The feature set of CE 3.0 -- expected in the middle of next year -- is believed to add the ability to edit PowerPoint files and a full IMAP4 mail client.

"Microsoft can either be in the forefront of eating its own children or let someone else do it," said Giga Information Group vice president Rob Enderle. Like Ellison, Enderle feels the move toward thin clients is unstoppable. Microsoft, he said, has to have a viable thin OS, given trends in the marketplace. "But if it becomes extremely viable, they cause an event that they would just as soon not have occur," he said. If CE cannibalizes some of Microsoft's standard desktop sales, Enderle said, it will hit the company in the pocketbook, since hardware OEMs pay about half for CE what they do for Win 98.

Redmond, Wash.-based Microsoft has already run into trouble pricing its Windows Terminal Server in an effort to retain existing margins, Enderle said. "They've got an expensive client model, but the market is resisting that," he said. "These devices are natural extensions of the information networks customers have in place today," said Roger Guiragani, group manager for PC companions at Microsoft. But he said they are not replacements for general-purpose Windows PCs. But the handheld market is just one portion of the CE play. Microsoft is increasingly targeting embedded systems, such as TV set-top boxes and real-time manufacturing systems, with its ROM-based OS. "Embedded systems are very exciting because they target a new class of developers who are creating new categories of machines," said Guiragani.

Last month, for example, Microsoft announced the Windows CE Platform Builder developer tool as a successor to the Microsoft Windows CE Embedded Toolkit for Visual C + 5.0. The $999 tool kit will ship this month. The embedded market also is being targeted by Sun Microsystems with Java and by Symbian, a joint venture of Ericsson, Motorola, Nokia, and Psion, which is pushing its Epoc OS for wireless devices. The embedded space could become the true battleground, according to Enderle. "If the volume market becomes devices rather than PCs, then Microsoft cannot afford to let someone else have a beachhead," he said.

(Ellis Booker) Internet Week

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