Microsoft TVPAK operates TV-centric appliances

Making another foray into the world of television, Microsoft has unveiled the Microsoft TV Platform Adaptation Kit (TVPAK), consisting of client software for use in TV-related devices in the household, and server software for network operators.

Making another foray into the world of television, Microsoft has unveiled the Microsoft TV Platform Adaptation Kit (TVPAK), consisting of client software for use in TV-related devices in the household, and server software for network operators.

The product will be released later this year, according to a statement from Microsoft. The client software for set-top boxes, TVs and Internet terminals will be based on the Windows CE operating system. However, network operators will not be limited by the Windows graphical user interface.

The server software is built on Windows 2000 Server, Back Office products and technology from WebTV Network ., a Microsoft company.

TVPAK is yet another push by Microsoft into the business of combining TV and Internet for entertainment and electronic-commerce purposes. During recent years the company has made heavy investments in order to establish a solid foothold in this area, far from its stronghold in Windows-based PCs.

The first big thrust was in 1997, when the software giant bought California-based WebTV, which offered services for cable operators, connecting televisions to the Internet via a set-top box. Microsoft paid $US425 millionor the company, which was losing money.

The latest and so far biggest thrust came in May, when Microsoft bought a $5 billion stake in AT&T, at the same time obtaining the promise that AT&T will base its new generation of set-top boxes on Windows CE. AT&T is the largest cable operator in the U.S., and analysts estimate that this will get Windows CE on 5 million units.

TVPAK is yet another attempt to woo cable companies, according to Van Baker, an analyst at market research company Dataquest , a part of Gartner Group. It has taken Microsoft some time to understand the need to be more flexible, he said.

"This is an a la carte offer. The operators don't have to buy all, but just the parts wanted," said Baker. "The cable companies have been scared to death by Microsoft," he added, explaining that the operators feared Microsoft would establish a dominance similar to what it has in the PC field.

Microsoft entered the market rather naively, "just waltzing in expecting to make significant deals," Baker said.

The analyst finds nothing surprising in the announcement. Microsoft long ago said that its client software for TV-related devices would be Windows CE-based, which WebTV's present offer isn't, Baker says. WebTV Networks won't go away, but at some point the growth in specially built Internet set-top boxes will decline, because 'Net connectivity technology will be built into the cable box, according to Baker.

Microsoft has many competitors when it comes to interactive TV, and even partners like AT&T will only take whatever works for them in various regions, according to another analyst, Seamus McAteer, an analyst at Jupiter Communications in New York.

"Microsoft has bought a place at the table, just like in the wireless access area," McAteer said.

According to Microsoft, more than 30 companies are already working with the TVPAK software. Among these are Philips Electronics NV, based in Eindhoven, the Netherlands, which will be showing a prototype of a set-top box using the Microsoft technology at the Cable '99 show in Chicago this week. Likewise, General Instruments Corp., based in Horsham, Pennsylvania, also will show off a device using the software.

The client software includes an electronic program guide with interactive features. According to a statement from Microsoft the server software can be integrated with the network operators' systems for billing, customer service, network management and video on demand. Microsoft expects the software to be ready for large scale commercial use in first half 2001.

Microsoft, based in Redmond, Washington, can be reached at +1-425-882-8080, or on the World Wide Web at http://www.microsoft.com. Dataquest, a division of Gartner Group Inc., can be contacted at +1-408-468-8000, and on the Web at http://www.dataquest.com.

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