Microsoft chief executive Steve Ballmer admitted today that the software giant hasn't always been as committed to the embedded systems market as it could have been. During his hour-long keynote before nearly a thousand attendees at the Windows Embedded Developers Conference here, Ballmer said: "The company has gone in fits and starts as it relates to the embedded environment. We started with DOS, then Windows and then CE, but we just didn't have the passion and commitment to that space that characterised our success in other areas." Microsoft had taken a "highly sub-optimal approach" to the embedded market in the past, especially with regard to Windows NT, where "embedded was an afterthought," Ballmer said. But all of that is changing. The embedded environment will become increasingly important over the next five to 10 years as the PC loses its place as the only important devise. "We are pushing, pushing, pushing in this space and will be flexible on the pricing and licensing side where necessary," Ballmer said. But Microsoft needs feedback from developers on the business and technical side to better serve them. While progress has been made on this front over the past year, with revenue from the embedded side growing more than 300 percent over the past six months and 780 design starts with partners, Microsoft still has a long way to go. "We have delivered the PocketPC, Car.Net and the MSN Web Companion, among others, and Microsoft will continue to be a leading-edge user of the technology we provide this market," Ballmer said. While admitting that the PocketPC got off to a poor start, Ballmer said it is now "rocking," and he expects some 4m units to be sold over the next 12 months. While software infrastructure remains important, it has to be "more than a loader and memory manager. It must involve media and rich graphics, and we will differentiate ourselves on smart devises where software as a service really matters," he said. The Internet has highlighted the need for an infrastructure that supports rich connections between people and devises, Ballmer contended. "This is the future of software," he predicted. "In the future, we will not be writing software the way we do now. We need a new software platform that is put on the PC and the server and a range of devises. That next-generation platform is .Net (Microsoft's software-as-services platform), and it has to reside in a variety of places and on a lot of non-PC devices." Services need to be highly distributed and XML-based across a variety of business models. Some of these will be free, while others will be charged for. Microsoft and its partners will offer services touching on identity, notification and messaging. Microsoft is building a reliable platform for the embedded space, with Talisker, the next version of Windows CE, providing greater componentisation, a more flexible user interface that is "skinable," and built-in Web and multimedia support, Ballmer said. Whistler Embedded, which will likely be known as Windows XP Embedded, represents a huge step up from NT 4.0, he maintained. It will have built-in componentisation technology and embedded-specific features like XIP, compact PCI, a smaller footprint, a better toolkit and XML, SOAP and UDDI support. Both products are slated to ship this year. "The target is to ship Windows XP in the fall, with the embedded version following within 90 days of that," Ballmer said. "We have a vision for the computer industry and what that means for the embedded space," Ballmer concluded. "We will be enabling .Net on all devices, providing best-of-breed development tools and a breadth of computing devises. "We are committed to this market for the long run. This is a partnership -- you need our help, and we need your feedback. I encourage you to push on us and build on us." What's happening in the world of Windows? Find out with ZDNet UK's Windows Special. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet news forums. Let the editors know what you think in the Mailroom. And read other letters.