Microsoft and Pace Announce Wide-Ranging Memorandum of Understanding to Develop Applications for Digital Television

NEW ORLEANS, May 8, 2000 — Today at Cable 2000, Microsoft Corp. and Pace Micro Technology plc announced a far-reaching memorandum of understanding under which they plan to cooperate closely to develop a wide range of applications and enabling technologies to meet the rapidly expanding demand for digital television. The memorandum builds on a five-year relationship between Microsoft and Pace, the world’s leading developer of digital set-top box technologies, and is likely to provide important business opportunities for both companies.

The memorandum of understanding includes plans for Microsoft to adopt Pace’s digital set-top box technology as a core reference platform for digital television applications. Pace will work closely with Microsoft on the evolution of Microsoft® TV Advanced client software for advanced set-top boxes to deliver new forms of entertainment, communication, information services, Internet services and online shopping (t-commerce) via the television.

UK-based digital technology company Pace also plans to cooperate further to enhance the Microsoft TV Basic Digital client software for current-generation set-top boxes. This collaboration builds on the successful integration of Microsoft TV Basic Digital into Pace’s digital set-top box platform. Further development work is planned, including the creation of product road maps to help define future functionality for Microsoft TV Basic Digital.

In line with Pace’s recently announced home-networking strategy, the two companies also intend to cooperate on the development and integration of specific new products and applications that can be delivered via the digital set-top box, such as home gateway technologies, PDA-style home shopping devices and voice over IP.

Commenting on the memorandum, Andrew Wallace, senior vice president of worldwide marketing at Pace, said,
“The MOU is an important announcement for the entire digital technology industry because it brings together the world’s largest software company and the world’s leading digital set-top box technology company. We anticipate that the memorandum also will lead to the more rapid development and deployment of new products and services for the home network.”

“We’re excited to work with Pace, an innovative leader in the set-top box arena, to help make the promise of enhanced television a reality,”
said Phil Goldman, vice president, TV Platforms Group at Microsoft.
“Working closely together, our two companies will have a measurable impact on accelerating the availability of richer forms of entertainment and interactive services and make the promise of what television can be a reality for consumers around the world.”

About Pace

Pace Micro Technology plc is the world’s largest dedicated developer of digital set-top box technology. The company is a pioneer of digital technology for the home and has played a key role in establishing the international market for pay television services. This expertise is now being used to create the networked home of the 21st century. In this home, the set-top box is a gateway for interactive communication, enabling consumer devices and services to interact with each other and the outside world.

Since its establishment in 1982, Pace analog and digital technology has been installed in more than 10 million homes worldwide. Pace is now actively involved in all digital platforms – satellite, terrestrial, cable, wireless and xDSL – through alliances with broadcasters, network operators and technology partners in the U.K. and around the world. Pace has 1,000 employees, more than a third of whom are research and development engineers, dedicated to the development of digital technology for the home.

About the Microsoft TV Platform

The Microsoft TV Platform is a comprehensive software solution for the television industry that makes television more useful, fun and engaging for consumers and creates significant new economic opportunities for network operators and their suppliers of programming, hardware and software. The client software, Microsoft TV Basic Digital for current-generation set-top boxes and Microsoft TV Advanced for advanced set-top boxes, operate a range of TV-centric appliances from set-top boxes to integrated televisions. Microsoft TV Server and Microsoft TV Access Channel Server are a pair of server software products that offer network operators the tools to provision, manage and operate a large-scale, commercial-grade enhanced-TV service.

The Microsoft TV Platform supports worldwide digital-TV broadcast standards, including DVB, ATSC and ARIB. It also supports commonly used Internet standards such as HTML, JavaScript and Dynamic HTML, as well as all interactive content authored according to the Advanced Television Enhancement Forum (ATVEF) specification.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software – any time, any place and on any device.

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