Microsoft said on Monday that it has begun shipping to approximately 100 partners and customers the first beta version of its Whistler Embedded product. Whistler Embedded makes Whistler, Microsoft's successor to Windows 2000, available as a set of discretely licensable modules. Whistler Embedded is being designed to run inside devices such as advanced set-top boxes, routers, and Windows-based terminals. By further dividing Windows into components and offering tools targeted at embedded systems developers, Microsoft is hoping to build market share for Windows as the system software that runs inside devices, not just inside PCs and servers. Currently, Microsoft markets two of its products as embedded operating systems: Windows NT Embedded 4.0 and Windows CE 3.0. "We will always have these two embedded offerings," said Microsoft lead product manager Deanne Hoppe. She said Windows CE will continue to be targeted at smaller-footprint, memory-constrained devices that may or may not run Intel processors, such as Pocket PC-based devices and MSN Web Companions. Windows NT Embedded/Whistler Embedded is aimed at Intel-based devices that typically require the full set of Win32 application programming interfaces and full implementation of Windows networking. IDC analyst Al Gillen noted that Windows CE competes head-to-head with other "hard-core" embedded operating systems, such as Wind River Systems' VxWorks and embedded versions of Linux, more than Windows NT Embedded or Whistler Embedded does. "Microsoft calls this [Windows NT Embedded/Whistler Embedded] 'embedded' because it's not designed to be configured by the end user," Gillen said. Windows NT Embedded/Whistler Embedded are bigger and more resource-intensive than are most embedded operating systems, he added. Embedded versions of Windows have a host of competitors from established companies such as Wind River and comparative newcomers advocating Linux. Microsoft has a different financial approach from these companies, though. Embedded operating system companies typically receive a large fraction of revenue from the consulting and support fees required to customize the operating system and other software for the device being designed. Microsoft, though, charges a fixed fee for the programming tools needed to adapt Windows to the device being built, then charges manufacturers for each device sold, Hoppe said. This approach is the polar opposite of most embedded Linux companies, such as Red Hat or Monta Vista Software, which charge only for development and support costs. For those customers who require greater support than what's available out of the box, Microsoft relies on partners such as Bsquare and VenturCom, Hoppe said. It took Microsoft nearly 1 1/2 years from the time it released Windows NT 4.0 to deliver a commercial embedded NT 4.0 offering. Because of the time lag, Microsoft decided against releasing a version of Windows 2000 Embedded and instead jumped straight to Whistler. With Whistler, Microsoft's stated goal is to cut to 90 days the time that developers will need to wait for Microsoft to ship Whistler Embedded after it ships its other Whistler releases. Microsoft has said it plans to ship at least the desktop version of Whistler in the latter half of 2001. In late October the company delivered Beta 1 of Whistler, the code upon which Whistler Embedded is based. If Microsoft delivers on time, Whistler Embedded should debut by late 2001 or early 2002. Along with Beta 1 of Whistler, which recipients should receive by early January, beta testers will get two new embedded-development tools. In addition to Target Designer and Component Designer, Embedded Whistler testers will receive Database Manager, which allows developers to import their custom components into the Whistler database repository; and Target Analyser, which allows developers to identify dependencies between the operating system and required device drivers. Stephen Shankland contributed to this story Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read other letters.