To add to what has been posted, today the Wall Street Journal provided an interesting view of Microsoft's Windows CE Real-time Upgrade.
-----------------------------------------------------------------
Microsoft is trying to expand its Windows franchise yet again, announcing plans to move its software technology deeper into factories, retail outlets, cars and office equipment.
The company said it will upgrade its Windows CE operating system next year for a range of markets outside the computer industry, adding capabilities that help machines control and schedule sequences of tasks. Microsoft's announcement puts it in more direct competition with several companies that supply what are called "real-time" operating systems, including Wind River Systems Inc., Integrated Systems Inc. and Microware Systems Corp.
Windows CE, the subject of a Microsoft Technology conference this week in San Jose, CA, is being adopted by many makers of hand-held computers. But the technology is having a harder time gaining acceptance in industrial equipment and office machines, where computing power is embedded inside simple, low-cost chips, and reliability is paramount.
Tony Barbagalio, a Microsoft market manager, said the addition of real-time capabilities might take Windows CE into the sensing devices and motors that control a factory, for example: The current version would be more typically found along with a display device on a larger machine that manages an entire production line, he said.
Microsoft doesn't expect to have a completed real-time product until the second quarter of next-year. Nevertheless, its announcements caused some ripples for competitors. Shares of Wind River, for example, declined $1.875 to $36.50, and Integrated Systems fell $1.125 to $22, both in the Nasdaq Stock Market trading.
Ron Abelmann, chief executive officer of Wind River in Alameda, Calif., said he isn't worried by the competition. Microsoft has made noises in the real-time market before, he said, but has failed to win converts because of the slow speed and bulky size of programs based on Windows CE. In addition, many potential customers aren't eager to allow Microsoft to establish the same kind of influence over technology standards that it has in the PC market.
"If you go with Windows CE, you lose your product differentiation," Mr. Abelmann argued.
Microsoft's Mr. Barbagalio contends the forthcoming technology will fix most of the software's shortcomings for real-time applications, though it will still require more storage space than some rivals technology. As a result, Windows CE will work in automobile-dashboard systems, for example, but might not fit into brakes or engine controls, he said.
-----------------------------------------------------------------
Pay a lot of attention to what both Abelmann and Barbagalio are saying. Ron confirms that technically Windows CE will never be that competitive, but even if it were, there are many industries that will not be receptive to a threat of a Microsoft takeover of their standards. Witness the cable TV and auto industries as two that recently have surfaced strong anti-Microsoft actions.
Particularly encouraging is Mr. Barbagalio's comment that Windows CE will work in the dashboard, but probably not for brakes or engine controls. The big unit numbers and revenues for WIND are in the numerous smaller devices, unlike the situation with Microsoft. If 10 million AutoPC's were to ship with VxWorks inside, WIND would get about the same royalty as it would get being a part of a shipment of 10 million engine injectors. Why? Because the high-value added portion of an AutoPC is associated with the application software (think of NCI's set-top box solution), not the RTOS. WIND doesn't supply the application software. Microsoft likes AutoPCs because they would provide the OS and all the applications, even shrink-wrapped add-ons just like PCs.
But suppose Mr. Barbagalio is being coy. Suppose he (Microsoft) actually intends to take over all operating systems. And suppose Microsoft bulldozes its way past the reluctance of most industry leaders to let them participate, and then to dominate - similar to how Bill Gates arm-twisted Malone into splitting his interactive TV contract into pieces, giving the set-top box portion to Microsoft. Well if that happens, or if there is even a threat of that happening, then the DOJ will attack Microsoft with more vim and vigor than Microsoft ever thought possible. If the DOJ fails, then Congress will stop Microsoft.
As the DOJ is readying its broader complaint about Windows 98 against Microsoft, its lawyers are beginning to look for more ways to limit Microsoft's aggressiveness. The problem is not the size or profitability of Microsoft's business; the problem is not even Microsoft's market share; the problem the DOJ has with Microsoft is that its unrestrained aggressiveness threatens innovation. Any company that is perceived as slowing innovation will face anti-thrust action. Microsoft's vaporware announcement coming off the ESC is a blatant example of predatory monopolistic behavior, which is a favorite trick of Microsoft. Announce a product years in advance to freeze the market and set it up for your late entrance. Most companies do this to some extent, but it only becomes predatory when practiced by monopolists. This is the point that Scott McNealy understands but Bill Gates won't admit to: Monopolists may not use the same aggressive behaviors that are acceptable for competitive companies. Monopolists exist at the pleasure of society, so they must be socially well-behaved or they will be contained. Society deems that innovation must be encouraged, not hindered. So be it.
Admittedly, the DOJ has been looking backward in its efforts against Microsoft, but that is beginning to change. As the DOJ looks to the future of computing, it should see the emerging embedded systems market as the next important wave of computing, a far more important place to make a stand than trying to differentiate between various installations of Windows 95, or even Windows 98. As the importance of embedded systems becomes ingrained at DOJ, I suspect they will make Mr. Barbagalio be true to his word.
Want to help the DOJ focus its vision correctly? Call the DOJ handling the Microsoft development at 415-436-6660. Tell them what you think the DOJ should do and why.
Allen |
