During his opening keynote, which kicked off this year's Windows Hardware Engineering Conference in Los Angeles, Microsoft President Steve Ballmer entreated hardware developers to renew their vision of the way computing devices should look and act, at the same time outlining several new initiatives designed to help get the ball rolling. Microsoft's previous vision, Ballmer said, had been of a PC on every desk and one in every home. But now it has broadened to include a wide range of devices, encompassing traditional PCs, single-purpose PCs, computing appliances and handheld devices -- all the things that enable users to communicate and connect to the Internet. "So much has happened over the last five to six years that it has caused us to renew that vision," Ballmer said. "This industry is not just about a PC on every desk and in every home. The PC is about empowerment ... connecting to the Internet anytime, anywhere, on any device." Ballmer in the course of his presentation touched on initiatives designed to make PCs simpler, a new Windows Server appliance device for networking small offices and an update on the company's Windows 98 strategy. The Windows Server Appliance, demonstrated during the keynote, will be the first such appliance to come to market. It uses Embedded NT, which was demonstrated for the first time publicly running on the appliance. Its purpose is to allow small businesses to easily network PCs for file, print and Internet connection sharing, Ballmer said. The device, which features a built-in hub, can be set up by plugging PCs into it an turning on the power, at which point it automatically assigns the PCs a network address. The rest of setup can be done using a Web browser on one of the PCs. Windows Server Appliances will be based on standard Intel Corp. Pentium processors and will be available from PC makers in the second half for between $1,000 and $2,000, Ballmer said. While the Windows Server Appliance will be one of the first appliance devices to hit the market, Microsoft is mounting a number of initiatives to develop similar devices for end users. Ballmer also announced the Easy PC initiative, a joint venture with Intel designed to simplify the design of PCs. Microsoft, for its part, will work to support Easy PC in its operating systems -- presumably in forthcoming versions of Windows 98 -- by hiding DOS and using technologies such as Universal Serial Bus, IEEE 1394 for networking and peripheral attachment, and Device Bay for expansion. "I think there's a lot we need to do to improve the consumer computing experience," Ballmer said. A number of PC vendors, including Dell Computer Corp., Hewlett-Packard Co., Compaq Computer Corp. and Gateway Inc. will participate in the initiative. Microsoft is also collaborating with Intel on the Concept Platform Project. This initiative will focus on using X86 hardware for single-purpose, appliance-like devices. The project came about, Ballmer said, due to decreases in the price of components for X86-based systems, which increased PC OEMs' interest in such devices. "The PC of tomorrow will allow for the creation of single-purpose PCs for applications, such as gaming systems," Ballmer said. Such PCs will be driverless devices that feature "instant on" and support for a number of different networking technologies to connect to the Internet. They will automatically manage their own resources, so end users don't have to be engineers to figure them out. "One of the real downsides of Windows in the home is that it's not instant on like the television," Ballmer said. One of Microsoft's first strides toward Easy PC and the Concept Platform Project will be a new release of Windows 98, slated for next year. As expected, the release will be built on top of the Windows 9x kernel. "We weren't sure for a while, but the right approach next year is to continue to enhance Windows 98," Ballmer said. The operating system will support Universal Plug and Play, sport improved online capabilities (such as built-in support for high-bandwidth networking technologies) and handle digital media such as digital photographs in a more seamless manner. After 2000, there will be a convergence of the operating systems, Ballmer said, which likely means the Redmond, Wash., company will go ahead with plans to develop a consumer operating system based on its Windows NT kernel. It was just last year at WinHEC that Microsoft Chairman and CEO Bill Gates said the current version of Windows 98 would be the last operating system Microsoft makes that is 9x based. While the new vision of appliance devices and single-purpose PCs seems to fly in the face of Microsoft's strategy for its Windows CE operating system, which will also target appliances, Ballmer said "we're still going to support Windows CE for the low end." He said Windows CE 3.0, which will be available in the fourth quarter, will include new real-time capabilities, which should, among other things, make it more acceptable for use in devices like smart phones. Also demonstrated during Ballmer's keynote was Universal Plug and Play, for which a new open working group has been established. A demonstration showed a CD player playing music on speakers, connected via a home networking technology. The keynote concluded with a demonstration of a 3D user interface Microsoft has in development in its research labs. The interface presents a desktop that is like a physical environment, instead of a flat screen. The desktop was depicted as a hallway with applications in doorways. Applications are managed by moving back and forth in the hallway.