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WindowsEmbedded orEmbeddedLinux:Making the Right ChoiceTrying to decidewhich OS to use in your next device?One of the common dilemmas facing OEMs is how toselect the best operating system for their embeddeddevice. For example, the absence of license royaltieson the embedded Linux kernel makes it an irresistibleoption to consider.

Clearly there are many cases where embedded Linuxwould not be a viable option, such as any embeddeddevice that leverages Windows applications or othersoftware based on the Win32 programming model. Theadded cost of converting applications to embeddedLinux would outweigh any royalty cost savings.

Other choices are less obvious, like picking an operatingsystem for set-top boxes that deliver digital cableprogramming. Would you use Windows Embedded orembedded Linux?

Let BSQUARE Guide YouWith more than 10 years of experience with embeddedtechnology, BSQUARE can expertly guide you to selectthe best operating system for your device.

Our firsthand knowledge of embedded systemsintegration gives us unique insights into the devicedevelopment process, which translates into carefullycrafted licensing strategies for you.

Don’t handicap your device by selecting an operatingsystem that doesn’t fit. Pick the right embeddedoperating system, and ensure the success of your devicefrom the start.

What Will Your ProjectDevelopment Cost

A Two-StepDecision Process

Meet Embedded LinuxEmbedded Linux has attractedpositive attention over the last coupleyears as an option for embeddeddevices. The popularity of embeddedLinux has risen as the earlierwidespread use of proprietary, in-house embedded operating systemshas fallen o� dramatically.

Platform and application developersare attracted most of all to the openavailability of community-maintainedOS source code, while businessdecision makers �nd the absence oflicense royalties on the Linux kernelextremely appealing.

The embedded Linux operatingsystem is available for embeddedapplications through two di�erentbusiness models:

• Embedded Linux CommercialDistributions are maintained andsupported by companies as commercialproducts. They o�er a wide range ofcapabilities and target a broadassortment of markets, from high-endtelecommunications infrastructure, tohandheld computers, to “deeplyembedded” data acquisition and control.

• Open Source Embedded LinuxImplementations are available asdownloadable object and source code,and are covered by open source licenses.

Meet Windows EmbeddedSmart device makers are attracted tothe Microsoft Windows Embeddedplatform for its robust and proventechnologies and the reliability of aplatform supported by Microsoft.

Platform and application softwaredevelopers like the powerful andfamiliar Win32 API and the availabilityof mature, well integrateddevelopment tools. Business decisionmakers appreciate the wide availabilityof Windows programming skills andthe speed with which a product canbe brought to market.

The Windows Embedded platformincludes two di�erent Windowsoperating systems:

• Windows XP Embedded is a high-endembedded OS designed to enableadvanced devices requiring the richnessof the Windows XP code base. WindowsXP Embedded comes with powerfulauthoring tools to build a customizedruntime image quickly. This platformenables advanced devices ranging fromRetail Point of Sale systems, to ATMsand Kiosks, to thin clients, and evenhigh-end consumer electronics.

• Windows CE .NET is a real-timeembedded operating system thatdelivers advanced technologies toenable innovative smart, connected, andsmall footprint devices. It also includespowerful development tools for bringingcustomized devices to market fast.Windows CE .NET powers smart deviceslike Voice over IP Phones, ResidentialGateways, set top boxes, and manyothers. In addition, it supports multipleprocessors (x86, SHx, ARM, MIPS).

BSQUARE has assisted hundreds of companies in the evaluationand selection of operating systems for embedded devices. Ourlicensing experts always advise OEM customers to start with asimple two-step decision process:

• First determine if the technical features required for the type of device youare developing are available with the Windows Embedded or embeddedLinux operating systems.

• If both operating systems meet your technical needs, then compare thebusiness requirements for each option by analyzing the �xed and variableproject costs.

Time to MarketTwo comparative studies of real-world embedded development projectsin 2003 both found that Windows Embedded engineering projects werebeing completed in a shorter amount of time than embedded Linux.One study by Venture Data Corporation (VDC) found that a substantiallyhigher percentage of Windows Embedded projects were completedin less than 6 months than were embedded Linux projects. A separatestudy by a di�erent organization, Embedded Market Forecasters (EMF),found similarly that the average embedded Linux development projecttook over six months longer to complete – 14.3 months, compared toan average of 8.1 for Windows Embedded projects.

Development Team SizeWindows Embedded projects also tend to require fewer developers.Both the VDC and EMF surveys of embedded development foundthe average number of software engineers per project to be lower forWindows Embedded projects than for embedded Linux projects.Depending on the survey, embedded Linux teams ranged from about30% to 80% larger than Windows Embedded teams.

Average Number of SoftwareEngineers Per Embedded Project*

Study Windows Embedded OtherEmbedded (N) Linux (N) Commercial OS (N)

EMF 2003 7.9 (50) 14.2 (50) N/AVDC 2003 3.7 (36) 4.8 (44) 6.6VDC 2002 4.2 (27) 6.3 (75) 5.4

*Note: N=Number of Respondents. The relatively larger team sizes reported by EMF may re�ect in partthe fact that EMF speci�cally included test and QA and project management in the count, while VDCwas more narrowly focused on actual software developers.

Total Cost of Developmentfor Windows Embedded and embedded Linux Compared

EMF Study Windows Windows XP All Windows EmbeddedData Results CE .NET Embedded Embedded Linux

Total Time to Market, 8.2 8.0 8.1 14.3months (mean)

Software Engineers/ 8.3 7.3 7.9 14.2Project, #

Development Man 68.1 58.4 64.0 203.1Months (mm)

Cost/mm of $7,500 $7,500 $7,500 $7,500developer’ s time

Total Cost of $510,450 $438,000 $479,925 $1,522,950Development

Comparative Savings 66.5% 71.2% 68.5%(relative to embedded Linux)

10.5%21.3%

34.3%38.3%

28.9%17.0%

0 5 10 15 20 25 30 35 40

1 to 6 months

7 to 12 months

13 to 18 months

Linux Windows Embedded

Percentage of Respondents

Time-to-Market, Embedded Projects

Source: Venture Development Corp., June 2003

CompareLicensing CostsWindows EmbeddedThe cost of licensing Windows Embedded depends on the operatingsystem, the version, and the quantity. In general Windows XP Embeddedwill cost about half as much as Windows XP Professional.

Windows CE .NET is substantially less expensive: the Core versioncan be licensed for less than $3, while the top-priced version, CEProfessional Plus, will run approximately $20.

BSQUARE can help you determine which version you need and howmuch it will cost.

Embedded LinuxThe starting price for embedded Linux appears to be zero, if youbegin with a free open source OS kernel and perform all the necessarywork to adapt it yourself. The amount of work required to bring theembedded Linux kernel up to the feature levels of today ’s embeddeddevices, however, can be prohibitive.

Many embedded devices require either real-time performance(bounded, deterministic) or advanced user features such as browsingand media streaming. The Linux kernel provides neither. Unless youwant to develop a browser or a real-time kernel yourself, licensingcosts will be involved.

In 2003 Embedded Market Forecasters (EMF) conducted a study of theaverage price per unit to license IP features that are already includedand integrated in Windows CE .NET. It turned out that licensing a real-time kernel for embedded Linux alone would actually cost more thanlicensing the whole Windows CE Core operating system.

Based on a volume assumption of 10,000 units, here are some of theaverage costs to license embedded Linux components your devicemight need:

CompareBusiness ModelsTotal cost is not the only consideration in choosing an embeddedoperating system for your device. Another important question you needto ask is: at what stage in the project will each of these costs be incurred?

Obviously the actual engineering costs will occur during the designand development stage, but what other payments will be due priorto the time your device goes to market and begins bringing in revenue?

Windows Embedded ModelThe Windows Embedded business model is principally based on runtimeroyalties and is structured to provide very low upfront costs includinglow cost tools, free maintenance for 7 years, and a “ pay as you go ”support model.

Microsoft and Windows Embedded licensing Value-Added Partnerssuch as BSQUARE only make money on royalties once an OEMsuccessfully ships a product. This model provides a vested interest andincentive for Microsoft to continually invest in and improve its toolsand products so that OEMs can get to market more quickly and shipin high volume. This is what Microsoft calls a “ shared success ” model.

Embedded Linux ModelEmbedded Linux can be generally characterized as more of a front-loaded cost model to the OEM with higher tools, support andmaintenance costs that an OEM must pay upfront regardless of whetherthe OEM ever ships a device or not.

In 2003 EMF studied real-world development projects and found thatembedded Linux OS and tool maintenance costs average $2,000 (andcan run as high as $10,000) per developer per year. Add another$1,000 per developer per year for average support costs and youhave nearly $4,000 per developer for average tool costs.

In this way the embedded Linux distributors ’ business model is basedlargely on revenue paid by OEMs early in the development cycle,regardless of the success of the project.

Intellectual Property RisksWhen comparing business models, smart device makers should alsobear in mind the issue of who owns the source code running theirembedded devices.

Open source code access has IP ownership risks and ambiguities. Thelegal consequences of using Embedded Linux may even involveinfringing on the intellectual property rights of large organizationsthat would not hesitate to protect themselves.

By contrast, Windows Embedded source code is protected byMicrosoft ’s commercially-proven licensing models that preserve OEMIP rights. BSQUARE acts as a trusted intermediary between OEMcustomers and Microsoft, further maintaining the con�dentiality of allparty ’s proprietary source code.

Real-time OS kernel $9.00Web Browser $8.12Media Player $2.00MP3 Decoder $0.75MPEG-4 Decoder $0.25Digital Rights Management $10.00Thin Client / Terminal $14.00Desktop Synchronization $10.00Residential Gateway stack $3.00

©2004 BSQUARE Corporation. All rights reserved. BSQUARE is a registered trademark of BSQUARE Corporation. All other names, product names and trade names are trademarksor registered trademarks of their respective holders.

BSQUARE Corporation • Bellevue, Washington • 888-820-4500 • 425-519-5900 • www.bsquare.com

About BSQUAREBSQUARE is a leading global provider of software, engineering services and consulting for the smart devicemarket. Since 1994, BSQUARE has provided world-class device makers with the building blocks necessary todesign, develop, and test innovative products quickly and cost effectively. A sample of BSQUARE customersincludes Motorola, Hewlett-Packard, Texas Instruments, Vodafone U.K., HTC, Microsoft and others. BSQUAREis one of Microsoft’s largest value-added partners worldwide for Windows Embedded software, a Gold-levelSystems Integrator of the year, and a leading Windows Mobile solutions provider for Smartphone and PocketPC.The company’s SDIO Now! technology has been adopted by over 50 top-tier smart device makers. For moreinformation, visit BSQUARE at www.BSQUARE.com, or call 888-820-4500 or 425-519-5900.

How to Get StartedThere are several ways you can learn more about the benefits of licensing Windows Embedded software anddevelopment tools from BSQUARE:

ResearchExplore the Microsoft Windowslicenses section on our web site atwww.bsquare.com/licenses.

• Get in-depth information aboutindividual Windows Embeddedand Classic operating systems

• Learn how to choose the rightoperating system for yourspecific embedded device

• Explore datasheets, white papers,and FAQs in our technicalresource center

AnalyzeHave one of our experts analyzeyour Microsoft Windows licensingneeds and provide you with theinformation and tools you need tomake the right choices.

• Call BSQUARE today at888-820-4500 or 425-519-5900

• Go towww.bsquare.com/licenses andclick on the Rapid Support link

EvaluateA free Software Evaluation Kitprovides an opportunity toexperience first-hand the powerand ease of developing withWindows Embedded.

• Call BSQUARE today at888-820-4500 or 425-519-5900

• Go towww.bsquare.com/licenses andclick on the Rapid Support linkor complete an EvaluationRequest form.

The Windows Embedded AdvantageWindows Embedded is… Enabling OEMs to…

Richer Rapidly deliver the applications, services, and experiencescustomers want and expect

Faster Get to market 44% faster, on average, than OEMs using embedded Linux

More Productive Employ software development teams that are 49% smaller, on average,than OEMs using embedded Linux

Lower Cost Achieve a Total Cost of Development 77% lower, on average,than OEMs using embedded Linux

Proven Rely on Microsoft’s demonstrated commitment, known pricing,and commercially proven licensing models that preserve OEM IP rights