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June 11, 2001

Microsoft Ventures Onto The Factory Floor
Company is making inroads in software that controls valves, saws, lathes, and robots

By Aaron Ricadela (aricadel@cmp.com)

More on embedded systems:

MBizCentral: Motorola To Embed Bluetooth (04/16/01)
EE Times: Embedded Linux Firms Seek Quick Standard (04/11/01)
EE Times: Linux To Play Broader Role In Embedded Systems (04/09/01)

ith PC sales in the tank and Microsoft's new server operating systems just getting established, the software company wants users to consider Windows for a host of new applications. The strategy has led Microsoft down some twisty technology paths, including digital television, electronic books, and screen phones. The jury is still out on the viability of those markets, but Microsoft's search for sales growth also means the world's largest independent software company is boosting investments in software that runs the manufacturers' shop floors.

Esoteric? Yes, but Microsoft is making inroads in the fast-growing software market for industrial computer systems that control valves, saws, lathes, and robots with its real-time Windows NT Embedded 4 operating system for x86 systems, and Windows CE 3, for systems that run on non-Intel chips. Sales of PC-based control systems are growing at about 60% annually, Microsoft says, compared with about 8% growth for desktop PCs. "What has Microsoft's attention is the number of units," says Cary Snyder, an analyst at MicroDesign Resources. "They want to be a major player."

So far, though, Windows hasn't been much of a factor. A September survey of 933 embedded-systems engineers by InformationWeek sister publication EE Times showed that fewer than 1% say they use Windows to run real-time applications, in which software needs to respond to commands within fractions of a second. By contrast, 58% of respondents say they use homegrown systems, and 28% run VxWorks, the real-time operating system from Wind River Systems Inc., the category's leading independent software vendor.

The market for real-time industrial controls has been dominated by the homegrown systems developed by users and a few independent software shops, such as Wind River Systems, as well as proprietary software from controls manufacturers such as Siemens AG and Rockwell Automation. But as manufacturing companies replace hard-wired programmable logic controllers with computers that capture, transmit, and graphically depict data for analysis, Microsoft is betting that makers of machine tools will want to run their products on Windows, which also drives their customers' database servers and PCs.

"Everybody knows the PC, everybody works with the PC, everybody has a PC," says Gerd Hoppe, president of North American operations at Beckhoff, an $85 million German manufacturer of industrial controls. "We're a 500-person company, and we're riding the wave of a 39,000-person company in Microsoft. They're a great development shop for us. Why would anyone continue to use workshop-floor controllers made with proprietary technologies?"


Microsoft "is a great development shop for us," says Hoppe, president of Beckhoff's North American operations. Microsoft hopes that makers of machine tools will want to run their systems on Windows.

Good question. To date, however, Microsoft's products haven't been cheap or responsive enough to meet industrial-systems developers' needs. Research firm Dataquest pegs the market for real-time operating systems and tools at $670 million in 1999, the last year for which data is available. Microsoft didn't even make Dataquest's list of software vendors with at least $10 million that year in real-time operating systems sales.

That could change, says Dataquest analyst Daya Nadamuni. "The industrial controls market is wide open. Microsoft's argument is that back-end systems can be much more easily integrated into the front end if customers run one operating system. If IT people are already trained on a Microsoft operating system, it's easier to train them on other flavors."

Microsoft says PC software developers can quickly adapt to its embedded operating systems, since they use the standard Win32 set of application program interfaces. "There's a pool of talent that knows Win32," says Mark Blakely, a business-unit manager at Cleveland Motion Controls' Burny division, which supplied about $10 million of cutting equipment to customers such as Caterpillar Inc. and Deere & Co. last year. "If we can leverage industry protocols, we can make it to market more quickly."

Siemens' $12 billion industrial controls business also is making more use of Windows. The company has introduced Windows CE to its low-end 170 and 370 lines of rugged, embedded, touch-screen computers that provide operator interfaces to shop-floor machines--and compressed its development cycle for the products to six months. "You need vendor standards to do that," says Chris Muench, a strategic relationship manager who works closely with Microsoft at Siemens Energy and Automation, the German company's U.S. sales division. Siemens' higher-end Pentium products running Windows 98 and 2000 are slated to include Microsoft's forthcoming Windows XP Embedded system.

There are signs that Windows is gaining favor among embedded-systems developers. According to an April survey of 1,249 embedded-systems developers conducted by Electronics Market Forecasters, a unit of InformationWeek publisher CMP Media LLC, 23.7% of respondents building industrial automation systems plan to use Windows CE on their devices during the next year, up from 14.1% last year.

But competitors say Microsoft overstates the advantages embedded developers gain by working in Windows. "There's no one-size-fits-all API in this space," says John Fogelin, a VP and general manager at Wind River Systems. "There's a lot of difference between CPUs, device drivers, and interrupt architectures. Microsoft is geared at supporting standardized, commodity hardware. It's not a personal computer--it's really an exercise in mass customization."

Wind River Systems has long supported standards such as TCP/IP and Distributed Component Object Model; Microsoft only recently added such support, Fogelin says. That's more important than delivering development tools laden with "PC baggage," he says. "No one's going to run USB on the factory floor."

Nat Frampton, president of Real Time Development Corp., a Pearl River, La., consultant, says he's leaning on Microsoft to make features of its PC and Pocket PC platforms ready for real-time controls vendors. For example, the ActiveSync technology for docking consumer handheld computers into desktops is "unreliable" for industrial devices, Frampton says. He also wants Microsoft to deliver more software wizards to help programmers quickly configure Windows for embedded devices.

Another challenge for customers: Microsoft's relatively recent entry to the industrial automation market means Windows lacks the established base of independent software developers and IT services that complement systems from more established vendors. Windows NT Embedded debuted in 1999. Windows CE 3, the first version of the lighter-weight system considered inexpensive and power-efficient enough for developers, shipped in April 2000.

Engineers still say Windows NT Embedded and CE require too much memory compared with competitive products. That's important in a market in which controlling costs is crucial. "Microsoft is going to have to break into the engineering culture with relevant arguments that speak to ease of development," says Jim McLeod-Warrick, an analyst at Beacon Technology Partners, which conducted the EE Times poll.

Microsoft hopes to change perceptions with new products and programs. Last spring, the vendor concentrated its embedded efforts, combining its NT Embedded and Windows CE staff into one unit. Microsoft won't break out sales but says revenue from embedded systems grew 300% during the second half of last year. "We've increased our investment there dramatically," chairman Bill Gates said recently.

Microsoft last month began seeding startups building devices based on Windows NT Embedded and CE, providing grants for free tools and operating-systems licenses. The company has also cut prices on NT Embedded 4 and Windows CE 3. NT Embedded is about $70 per license; Windows CE is priced at about $15 per copy for volume orders.

By year's end, Microsoft plans to release version 4 of Windows CE, code-named Talisker. The system, available as a beta 1 release, will be more componentized than Windows CE 3 and will support the Bluetooth and 802.11b wireless communication standards.

Microsoft is set to ship Windows XP Embedded, a refreshed version of Windows NT Embedded, by the second quarter of next year. XP Embedded is scheduled to break the operating system into about 5,500 components; this will let developers preload less code on devices, reducing memory requirements. XP Embedded also will boot from ROM instead of RAM, boosting performance.

Microsoft is becoming more of a factor in industrial computing for the same reasons it has cracked other markets--Windows technologies are relatively cheap, quick to implement, and draw on plentiful development skills--at a time when companies are under tight deadlines to build more capabilities into products. Still, software engineers are famously loyal to tried-and-true methods.

Either way, industrial users are demanding more from their IT vendors. "Customers are saying, 'I have to have a Web server on my pump,'" says Real Time Development's Frampton. "Who needed that 10 years ago?"

Photo of Hoppe by Steve Woit

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