From...

June 10, 1999
Web posted at: 2:19 p.m. EDT (1819 GMT)

by Alex Lash

DENVER (IDG) -- For a conference dedicated to what's arguably Microsoft's most important technology in the post-PC world, the Windows CE developer shindig here is unusually quiet.

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Windows CE is Microsoft's all-purpose operating system that can be adapted to run everything from PDAs to television set-top boxes to smart cards. In short, CE is a crucial weapon in extending Microsoft's desktop dominance to the universe of appliances predicted to far outstrip PCs in the all-networked-all-the-time world of the future. Company executives burned by antitrust investigators may no longer trumpet the early-'90s motto of "Windows Everywhere!" but there's no mistaking the message behind each PowerPoint presentation and product demo.

"Only a few hundred million people use computers today," said Senior Vice President Bob Muglia in the keynote speech. "We have the possibility to reach the billions of people not using them."

While Denver glimmers under blue skies and 80-degree temperatures, the show is a backdrop for the patience Microsoft will need to become the software provider for a myriad of unproven, even nonexistent markets.

Still, the lack of news from Denver is surprising, given Microsoft's skill at drawing attention to practically anything it deems important. For example, company president Steve Ballmer hosted an elaborate dog-and-pony show in San Francisco to tout the release of Office 2000, then jetted to the Supercomm trade show in Atlanta to deliver a keynote touting Microsoft's telecom investments.

Not surprisingly, developers here are eager to share the vision. As the estimated 2,000 developers crowded into technical breakout sessions scattered throughout the winding halls of the Colorado Convention Center, several expressed confidence that Microsoft will build the same lucrative ecosystem around Windows CE that has made thousands of Windows desktop developers rich.

"The support around it is incredible, as is their track record" in building a platform, said Alan Krassowski, senior software engineer of Step Technology.

The most visible CE device so far has been the handheld computer. Microsoft raised a stink early last year when it decided to call its PDA-sized devices "Palm PCs." 3Com, whose Palm Pilot has roughly twice the market share of CE-based devices, threatened legal action. Microsoft backed down and settled on the more awkward "Palm-sized PCs." Indeed, the biggest buzz at the show is a new, $450, palm-sized CE device from Casio that has a color screen and stereo playback, the first hint of what could be a growing convergence of personal organizers and consumer Walkman-like devices.

At a press conference, Microsoft and its technology partners tried to dispel grumblings that CE has evolved too quickly since its debut in late 1996, leaving hardware and software makers leery of building CE-based products that are outdated before their time, especially when the markets for various CE devices are unproven. To coax partners, Microsoft has subsidized development costs.

"We've shown that we're willing to make long-term investments in a platform," said Jonathan Roberts, general manager of Microsoft's productivity appliance division. "We're a very patient company."

Microsoft is also a very rich company and doesn't hesitate to use its $20-billion-plus cash reserves to spread CE into new markets. The most visible case is Redmond's stunning $5 billion investment in AT&T, whose recent cable purchases have suddenly made the telco giant the gatekeeper to a majority of the United States' cable networks. As part of the investment deal, AT&T will deploy up to 10 million digital set-top boxes based on Windows CE.

No big news may not exactly be good news for this year's CE conference, but in the new world of computing, Microsoft's strategy will be best measured in years, not press releases.