Microsoft Corp., targeting home networks as the next frontier for its .Net service strategy, is developing a server appliance that promises to connect computers, consumer electronics and home appliances.
Now all the Redmond, Wash., software company has to do is convince consumers they need it.
The software for the device, expected to hit store shelves late next year, will be built around a subset of the next version of Windows, code-named Longhorn, which is due in 2003, according to sources familiar with Microsofts plans.
While Microsoft officials declined to comment on the product, PC makers confirmed that Microsoft is working on such a system. A source at Dell Computer Corp., in Round Rock, Texas, said his company has held discussions with Microsoft about developing a home gateway system that would serve as a central point for managing Microsoft-based devices, such as PCs, handhelds and multimedia appliances like the Xbox.
Compaq Computer Corp. and IBM sources said they are aware of Microsofts plans to develop a home server, but neither company is an active participant in developing the device.
Another source close to Microsoft said the company was working with Seoul, South Korea, manufacturer Samsung Electronics Co. Ltd. on the home server, a prototype of which could be unveiled as early as next month at the Consumer Electronics Show in Las Vegas. Samsung officials could not be reached for comment.
The device fits squarely into Microsofts budding software-as-a-service plan for provisioning Web services and applications over the Web for a fee. As such, sources said the server will be connected to the Internet, most likely through Microsofts MSN site, allowing Microsoft to use it to deliver services as well as leased and rented applications to consumers.
Users will also probably be charged a monthly fee to keep the server updated, according to sources.
"Microsoft has made it very clear it wants to be the toll collector on these transactional environments and the gateway," said International Data Corp. analyst Al Gillen, in Framingham, Mass. "The home network is just one of those environments."
The Longhorn-based software for running the device will feature a new file storage system, sources said.
"It will use XML data tags," a source said. "The file will not only contain the data but will also describe it and its associated applications and uses. Uses in this case might very well be an application running on a third- party providers machine somewhere on the Internet."
According to another source, the server will be designed to look like a piece of furniture, will be extremely quiet, and will incorporate wireless connectivity such as 802.11 and Ethernet support. It is also likely to be priced in the range of an average PC, sources said.
The challenge will be making it affordable and easy to use. A source at one major computer maker said it remained to be seen whether or not the operating system will be stable enough to operate household infrastructure.
"The operating system would have to be bulletproof," the source said. "For example, just imagine if you were trying to turn off your home security system so you could enter your house and suddenly got the blue screen of death. That would be intolerable."
IDCs Gillen agreed, saying the server and the network it controlled would have to be "unbelievably reliable and transparent, where the user simply plugs it in, follows a few commands and its done."
But, while Microsoft may be excited about this server, its OEM partners are decidedly less so.
The Dell source said that, at this stage, the computer maker has little interest in producing such a device, since it is not likely to be a high-volume product.
"Its an interesting idea, but will people buy it?" he asked.