SAN JOSE, Calif. — Microsoft Corp. has rolled out its first version of Windows Embedded tailored for a vertical market. Windows Embedded for Point of Service is a slimed-down version of Windows XP Service Pack 2 that maintains many of the desktop capabilities while adding some features specific for POS systems.

"What we are seeing in the past five to ten years is these systems have been moving to more PC-like architectures, and we made a conscious effort to get ahead of the wave," said Jason Demeny, product manager for Windows POS. He would not comment on whether Microsoft is planning other vertical-market versions of Windows.

The new OS requires a minimum 233-MHz Pentium II, 4-Mbytes RAM and 280 Mbytes of disk space, compared to up to 2 Gbytes of disk for Windows XP Professional. Many new POS terminals now build in 733-MHz and faster X86 CPUs and use 20-Gbyte hard drives, Demeny said. As many as 80 percent of POS terminals in medium- and large-sized retailers are linked to an in-store network, he added.

The new Windows variant includes retail-specific features such as remote boot, multiuser logon and dual-display support. Microsoft also wrote a plug-and-play software layer that works with a retail software standard for linking terminals to peripherals such as bar code and magnetic stripe readers and two-line displays.

The new version brings existing XP features to retailers including Windows Media, support for Wi-Fi and Bluetooth wireless, online Windows Update capabilities and XP's software deployment and management features. Microsoft promised it will support the new version for 10 years. Microsoft announced the OS Monday (May 23) at the Retail Systems 2005 Conference & Exposition in Chicago. The company would not comment on OEM prices for the software.

More than 40 companies announced they are developing terminals, peripherals or software that work with the new OS. At least three large POS terminal makers including IBM Corp. said they are working on systems that will use the software.

Microsoft already has a strong hold on POS terminals with as many as 40 percent of POS systems shipping in 2004 using some version of Windows, according to IHL Consulting Group, Inc. (Franklin, Tenn.).

As part of its marketing effort, Microsoft is reaching out to retail end users. It has published a catalog of about two dozen products verified by third party Veritest to work with the new OS. It has also published a guide to best practices in retail technology.