Responding to the growing popularity of server appliances, Microsoft plans to roll out a dedicated Web server in next year's first quarter as part of its upcoming Windows .NET Server Family, according to a source close to Microsoft.
Called the Windows .NET Web Server, Microsoft hopes the product can cash in on corporate users' increasing interest in appliance servers -- lower end, turnkey systems dedicated to performing specific tasks -- as well as stop some of the momentum Linux competitors have built in this market, the source said.
"The way to look at it, this is an arrow aimed at the heart of Linux," said Chris LeTocq, a research analyst and co-founder of Guernsey Research in Los Gatos, California.
The idea of server appliances is catching on. Market research firm IDC, in Framingham, Massachusetts, issued a report in May estimating that worldwide revenues will experience a compound annual growth rate of 56 percent and leap from US$3.8 billion last year to $31.4 billion in 2005.
Linux as an embedded operating system has been gaining traction over the past two years as well. Red Hat, for instance, bought Cygnus Solutions, which called itself the first open-source company, in November of 1999 for its tools and embedded Linux technology.
"One thing Microsoft has said will be different about the Windows .NET servers is they will be more modular, making them more conducive to doing things like embedded applications," said Peter O'Kelly, an analyst at Patricia Seybold Group in Boston.
Al Gillen, a system software analyst at IDC, said that although he has not been briefed on Microsoft's plans, it wouldn't be a stretch because the technologies that people currently use to build appliances already contain Web services capabilities.
"Microsoft has some different technologies for server appliances. If it's built on Windows 2000 with the Server Appliance Kit or [Windows] NT 4.0 Embedded, the Web serving is a given," Gillen added.
Microsoft already offers a product similar to the Windows .NET Web Server for OEMs (original equipment manufacturers) centered around an embedded version of Windows NT server that also includes the company's IIS (Internet Information System). Several vendors, including Dell Computer and IBM, sell such servers currently bundled with Microsoft's NT Embedded technology.
In the view of some observers, however, not many people are aware of the embedded versions of NT because Microsoft has bundled it in -- some say buried -- with other server products.
"A lot of people did not even know embedded NT even existed. By coming out with an OEM version that competes directly for the business being addressed by Linux and Apache, it could shine a bright light on what Microsoft has to offer," O'Kelly said.
A Microsoft spokesperson declined to comment directly on the product except to say the company has yet to decide how it will package its upcoming line of .NET Enterprise Servers, which are still in the beta phase of development.