Will MS try the "Open Source" Gambit with WinCE? Why Not - Nothing Else Seems to Work

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Event Summary

Updated 5:20 AM ET March 17, 2000
By John Spooner and Mary Jo Foley, ZDNet News

Feeling pressure from Linux in the embedded-device market, Microsoft Corp. is contemplating giving away Windows CE to some developers for free. The company is unlikely to go so far as to try to claim its effort to be Linux-like open source, but it nonetheless seems to be counting on riding the open source movement's coattails. Microsoft Corp. could make public its plans to open the Windows CE source base as soon as its Windows Hardware Engineering Conference (WinHEC) in late April, sources claim.

For embedded-device markets such as set top boxes, Microsoft easily could afford to give the OS away to encourage developer support. Licensing fees for the purpose of a set top box for cable companies costs very little money on a per-copy basis. One source speculated that in large deals, Microsoft charges less than $1 per copy. Microsoft's revenue comes, instead, on development tools and maintenance contracts, sources said.

For now at least, developers say that Microsoft isn't contemplating going so far as to turn Windows CE into an open source project, which would allow developers to make changes to the source code and share their work with Microsoft and others in the development community.

Microsoft, for its part, declined to comment on its Windows CE licensing intentions.

Windows CE is best known as the operating system for Handheld PC and PocketPC (formerly Palm-size PC) devices. However, Microsoft also is positioning it as an embedded operating system that complements its Windows NT Embedded product. Windows NT Embedded, Microsoft has said, is aimed at larger, more complex devices, such as network switches.

Market Impact

Yet another attempt by Microsoft to do anything serious beyond the desktop and server space. Microsoft has been trying desperately to break open the PalmOS hold on the palmtop/handheld market. However, this rumored move seems aimed at markets beyond the handheld. Microsoft is considering extending Windows CE beyond the handheld platform; getting developer mindshare early is one way to help secure a position in other areas. These areas will include the nascent "Information/Internet Appliance" market, where the "MSN Web Companion" - whenever it ships - will run on WinCE.

The secondary purpose is to steal some of Linux's thunder/momentum. Microsoft has seen the public's response to Linux (although we believe this is more due to the price and robustness than to it being open source), and they are concerned that the embedded-OS market will experience the same phenomenon as the server market.

Naturally, MS will make lots of money from owning the rights to whatever applications get developed (a typical part of any development agreement with MS), so they can afford to consider giving away the OS. Besides, the license fees for WinCE don't compare with those of Win 9x and Win2K. If Microsoft can gain market share by "giving up" the short money for the source code, that's probably a good tradeoff for them.

Although they need no further prodding, this "announcement" will help push the embedded-Linux vendors to move faster. The sooner a bug-free and application-rich embedded Linux is available, the sooner it can make inroads into the handheld and embedded space. It would be a mistake to release an embedded-Linux as buggy as some Windows releases - the same rules of acceptance/usage will not apply to Linux as they did to Windows.

A subtext to the handheld market battle is the belief that many corporations will increase the ubiquity of handhelds, thereby resulting in a new growth spurt for this market. Although handhelds will not replace the good ol' desktop PC, their functionality is increasing rapidly enough that their use as an alternative will no longer be pooh-poohed. This is one of the reasons Microsoft will never give up on the handheld market.

User Recommendations

The primary focus of this discussion is the development community, not the end user. For some developer(s), the key question is: am I (or are we) willing to give up all rights to my (our) creation, just to get some free source code? This may pose a dilemma to some - certainly not all - developers. Three years ago, this would not have been an issue, developers would have figured on the inevitability of Windows, and reacted accordingly. With the Department of Justice (DOJ) anti-trust trial apparently going against Microsoft, developers may decide they have other alternatives - like Palm and Linux.

The secondary focus is the consumer market. The current handheld market is 80% Palm, but the set-top box is still largely Microsoft. Microsoft's move may pre-empt any move by embedded-Linux vendors to make inroads into that space.

For the corporate end user, the longer question relates to whether Microsoft will ever dominate handhelds and appliances the way it has dominated the desktop. Most users will not care - all they want to be able to do is run their applications with a minimum of aggravation. At that level, users will have to see if WinCE or Embedded NT or any other embedded Windows product will perform as well as the Palm OS, embedded Linux, or any other non-Windows embedded OS. We expect this decision point will not occur until the second half of this year at the earliest.

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