Windows CE 5.0 to Include Microsoft’s First Operating System Commercial Derivatives Program for All Licensees

SAN DIEGO, June 28, 2004 — Today at the Microsoft® Windows® Embedded Developers’ Conference (DevCon) 2004, Microsoft Corp. announced that Windows CE 5.0 will offer expanded source licensing, enabling, for the first time, all licensees to ship products commercially built from their modifications of the Windows CE 5.0 shared source code. Licensees will maintain ownership of their derivative code and will not be obligated to share modifications with Microsoft, partners or competitors. In addition to expanding the Windows CE Shared Source distribution to more than 2.5 million lines of code, Windows CE 5.0 will also include networking performance improvements that dramatically increase data processing speeds, more than 60 production-quality drivers that increase developer productivity, technology to remotely monitor device performance, and Direct3D®
Mobile to enable high-intensity gaming applications. Windows CE 5.0 — previously code-named “Macallan”– is scheduled to be released to manufacturing July 9, 2004.

“Our new commercial derivatives licensing is all about providing device makers with even greater flexibility to innovate for the vast range of embedded device scenarios where the Windows CE software platform can be leveraged,” said Ya-Qin Zhang, corporate vice president of the Mobile and Embedded Devices Division at Microsoft. “We believe that the ability to ship commercial derivatives, with no obligation to share customizations, will greatly appeal to device makers — all of whom want to maintain the rights to their competitive advantage.”

As part of the Windows CE Shared Source Program, which is under the Microsoft Shared Source Initiative, device makers have significant access to Windows CE source code, including transparency to the operating system kernel, graphical user interfaces, file system, device drivers, Web server and much more. To date, more than 250,000 members of the embedded developer community have downloaded Windows CE Shared Source code. Run-time licenses must be acquired before shipping derivative works commercially; however, the Shared Source code may be downloaded free of charge as part of the Windows CE 5.0 evaluation edition before purchasing a license.

“Transparency to Windows CE source code and the native Windows technology integration have been positive enabling factors behind many of the innovative enterprise computing solutions we’ve created for our customers,” said Mark McKinney, senior product line manager for Wyse Technology Inc. “We continue to be in lockstep with Microsoft on thin client innovation and are actively developing products on Windows CE 5.0 because we are confident we can get powerful and flexible solutions to market successfully in a short time frame.”

Shared Success

As part of Microsoft’s Shared Success model, device makers are given flexible licensing options and pay no run-time fees until their products are actually shipping to customers. Flexible licensing, combined with an affordable unified toolkit ($995 estimated retail price), and the option to download a complete version for a 120-day trial, eliminate many of the barriers to entry found in traditional embedded development.

“The total cost of development for an embedded software platform is a critical decision factor for original equipment manufacturers (OEMs),” said Brian Crowley, chief executive officer of BSQUARE Corp., a Windows Embedded Gold System Integrator and Value-Added Provider. “We continue to see growing demand for Windows CE because OEMs are able to get to market quickly with relatively small development teams and can defer royalty costs until they are realizing revenue from the successful devices we’ve helped them differentiate.”

In addition, the Windows CE Core license, with an estimated retail price of $3, provides greater flexibility for OEMs by allowing them to license Windows CE for a set of low-cost devices that require a rich real-time operating system with powerful networking in a small footprint. The introduction of the Core license one year ago has resulted in many new customers and more than 100 new designs running Windows CE. In fact, the increased flexibility and licensing options of Windows CE are contributing to the growth of Microsoft’s overall embedded industry market share. According to an independent study released this month by Venture Development Corp., a market research firm in Natick, Mass., Microsoft was the worldwide market share leader for embedded operating systems in 2003.

“We chose Windows CE to power our Wurlitzer Digital Jukebox products because it offers a suite of powerful multimedia components and a business model that keeps our development costs low,” said Phil Usatine, chief architect and vice president of Technology Development at Gibson Audio. “We’ve also seen incredible value in the Windows CE core license as it enables us to use advanced technologies like Windows Media®
codecs and digital rights management to provide our customers with an amazing music entertainment experience.”

About Windows CE

Windows CE 5.0 will be Microsoft’s newest and most advanced real-time operating system for rapidly building a wide range of innovative, small-footprint devices such as consumer electronics, gateways, industrial controllers, mobile handheld devices, Internet Protocol (IP) set-top boxes, voice over Internet protocol (VoIP) phones and thin clients. Building on the reliable foundation of previous versions, Windows CE 5.0 was designed to increase developer productivity, fuel device innovation, and further integrate reliability and security features. More information about Windows CE and Windows CE Shared Source licensing can be found at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft, Windows, Direct3D and Windows Media are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

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