One epic battle of the Information Age is over. Another is about to begin.
Microsoft's operating system may have achieved domination over the traditional PC, but no one can yet lay claim to the heart and soul of the next generation of computing devices: The so-called information appliance.
The rivalry to become the OS of choice inside these small, Web-enabled gadgets has just now begun. And Microsoft, despite its size and savvy, stands no better chance at victory than a half dozen other players, including Palm, Sony, and even a start-up such as Be.
"The (new) market is completely different," said Tom Rhinelander, senior analyst with Forrester Research. "The Intel-Microsoft story will not be repeated in this space."
Consider this year's Comdex: Among the typically PC-oriented show, Web watches, personal TV recorders, InfoSticks, and, even network computers all made appearances. "Everyone, one way or another, says the same thing," said Jean-Louis Gassee, chairman and CEO of operating system maker Be -- one company that has started to tailor its software to the new market. "Every object in our daily lives will be floating in an ocean of (data) packets."
The business strategies and approaches that worked in previous war may hold little sway in the next one. For example, the operating system -- Microsoft's path to greatness -- may not wind up being the software at the core of the new generation of devices.
In some cases, the new devices may use no branded OS at all. Just look at the ever-popular ReplayTV. The set-top device allows TV viewers to record, rewind and fast forward shows -- all thanks to a very-PC hard drive -- but without a PC OS. "I think our job is to make the technology invisible to the consumer," said Mark Stratton, director or product marketing for 'personal TV' device maker ReplayTV. "We don't want consumers to think about how the device is doing what it is doing."
Or, in the end, the OS may take a back seat to the software that allows these devices to communicate with each other. During a Monday keynote at Comdex, Sony president and CEO Nobuyuki Idei showed off the PlayStation 2, which sits at the center of its living room assault, and its Memory Stick, a pen-sized device for storing personal data and music.
But just as important are HAVi and iLink, Sony's high-speed networking technologies for consumer electronics. "There will be three main gateways to the broadband era," said Rick Clancy, spokesman for Sony "One will be the PlayStation technology, another the digital TV and set top, and the last is a mobile solution. Networking will bind them all."
By most accounts, Palm Computing, a subsidiary of 3Com, has taken an early lead in providing the OS for portable computing devices, one class of information appliances. It's done so by focusing OS on the cause of simplicity. It has targeted one part of the market, rather than creating a single OS to serve a vast array of devices, as Microsoft has done with Windows CE.
Result: More than 5 million Palm devices sold since their introduction or about 80 percent of the market.
"We focused on a set of markets where the size and simplicity of our device is key," said David Weilmuenster, director of platform strategy and planning for the Palm. That focus has delivered results, with major consumer electronics makers Sony and Nokia announcing at Comdex that they would build next-generation devices around the operating system. Each device will be tailored to a specific market.
Consumer electronics companies are noticeably wary of Microsoft, now that it's hard-hitting tactics in the PC market have been so thoroughly revealed during the course of its antitrust defense. Smaller -- less threatening -- companies such as operating-system maker Be may be better situated than the old guard of the computer industry to deal with the significant changes in the consumer market space.
"When you look at Windows CE, and you are someone like (a consumer electronics maker), you remember what the company (Microsoft) did to PC makers," said Be's Gassee, referring to the reports of coercion and aggressive tactics Microsoft used to tame competitors. "The Microsoft incumbency has a very different weight in the appliance space."
In the computer space, Be has had an uphill battle to gain market share. Yet, in the information appliance space, the company is starting to grab some territory. During the Comdex show in Las Vegas, Be announced that National Semiconductor's WebPad -- a portable Internet device -- would use the BeOS as the reference operating system.
"A brand name, like Windows CE, doesn't matter at all. In fact, it probably gets in the way," said Forrester's Rhinelander. "No one cares about the operating system. They need it, but only like they need, say, memory." That's a bitter swallow for Microsoft, which has seen its Windows CE operating system plateau at 13 percent.
Microsoft's rival, Sun Microsystems, has run into similar problems convincing consumer-electronics companies to use its Java technology on pint-sized devices.
Taking a tactic from Sony's playbook, both companies have decided to muster their forces behind technology for delivering the content that will make devices useful.
Microsoft has created the Universal Plug and Play initiative. "Whatever you put in your home as intelligent devices, the value is increased dramatically, when you connect those devices together," said Shawn Stanford, group product manager for Microsoft's consumer windows division."
Its rival Sun has attracted more than 20,000 developers to work on its Java-based Jini specification, which aims to let devices from different manufacturers talk to each other and interact.
"You could have a device like a screen phone that could download a Web page. If you want to print that page, how do you do it?" asked Curtis Sasaki, director of embedded applications for Sun. "The printer may not know anything about the screen phone, but using Jini, they can talk to each other."
No matter who the player is, or what the tactic, don't expect a quick victory. The market -- even as young as it is -- is so varied that no even analysts can agree on what it precisely is. Is it handheld devices? Is it wireless ones? Or is it anything used by an everyday consumer?
In the end, valuable territory in the information appliance market may wind up being conquered not by one victor but by many.