Silicon vendors, device manufacturers, and system integrators who work with Windows CE now have the right to commercially redistribute versions of Microsoft’s source code that include custom modifications. The measure is part of an initiative to give the Windows CE development community access to virtually all of the source code for the system, and to compete with open-source OSs like Linux in the embedded space by enabling licensees to contribute more to Windows CE development and better differentiate their products. However, Microsoft also gets the right to redistribute, royalty-free, any source-code modifications made by licensees.

Derivatives Licensing Programs

The changes are included in two additions to Microsoft’s Shared Source Initiative, the umbrella under which Microsoft manages about a dozen specific programs for licensing access to the source code for Microsoft’s OSs and its Passport single-sign-on technology.

The two new programs—the Windows CE Shared Source Premium Derivatives Licensing Program (CEPD) and the Windows CE Shared Source Premium Derivatives Redistribution Licensing Program (CEPDR)—share the following major features:

• All CE source code, except source code for third-party software that Microsoft does not have rights to redistribute, is now available to licensees in the new programs. Previous programs offered access to most, but not all, of the CE source code.
• Developers can modify and compile the source code to create "derivative" works based on CE and can demonstrate devices that contain these modified versions.

Licensees in the CEPDR program can, in addition, sell chips, devices, or solutions that include their modified source code. This is the first time Microsoft has permitted commercial redistribution of modified source code. (Licensees in other CE source code programs can distribute modified source code to other licensees for noncommercial use, such as research.)

However, any such modifications that are derived from Microsoft’s source code must be submitted to Microsoft for inclusion, royalty free, in future versions of CE. Developers of modifications that differentiate their products from others will be given a window of at least six months during which they will have exclusive rights to distribute devices that include their modifications.

Development Opportunities

Compared with other CE source-code sharing programs, the new programs will offer advantages in three areas: ensuring that CE runs better on particular chips, improving application debugging, and creating more scope for manufacturers to differentiate their devices to gain a competitive advantage.

Optimizing chip performance. The new programs are likely to be particularly popular with silicon vendors, who can modify the CE source code to optimize it for their chips, and then return the changes to Microsoft for distribution to customers who build devices around these chips.

For example, ARM, a designer of popular microprocessors for embedded systems, modified the CE source code to improve multimedia performance on devices that use the ARM chip. Those changes were incorporated into Microsoft’s source code and are available to any developer targeting the ARM platform.

Better software. As is the case with any source-code access program, systems integrators and OEMs can better debug and optimize their own applications if they have access to source code. By expanding the amount of source code to which they have access, Microsoft has increased their ability to optimize application stability and performance.

Product differentiation. Given their ability to create and distribute modified versions of the CE source code, manufacturers with OEM licenses will have greater opportunity to differentiate their devices from the competition. This could be important for manufacturers in competitive markets, such as CE-based displays. Note that reference platforms such as Pocket PC and Smartphone, though based on Windows CE, are not covered by the new licensing programs; thus the new licensing restrictions are unlikely to unleash any major OEM differentiation on these platforms.

Licensing Intellectual Property

The rules for licensing modifications back to Microsoft are among the most interesting—and controversial—elements of the new programs. Companies must get Microsoft’s permission before redistributing any modifications to its source code, and Microsoft divides potential modifications into several categories: "platform modifications," "company improvements," and "enhancements." Each type of change has different implications for licensees.

Platform modifications. Changes that improve Windows CE itself are considered platform modifications. Ownership of such changes must be assigned to Microsoft, which can then include them in future versions of Windows CE, make them available for all CE licensees, and provide technical support for them.

Company improvements. Changes to the source code that permit an OEM to differentiate a product from competitors’ products, without necessarily improving CE, are considered to be company improvements. While developers retain ownership of intellectual property that they create in this way, they are required to give Microsoft a royalty-free license to use their modifications. Microsoft will give the developer exclusive rights to company improvements for a period of time, and Microsoft will guarantee the developer exclusive rights to distribute devices that contain company improvements for a minimum of six months. Then, it may include the improvements in the next major release of CE.

Developers must notify Microsoft of their intent to distribute derivative works, and if there is a dispute between the developer and Microsoft about whether a change is a platform modification or a company improvement, the developer may not redistribute the change.

Enhancements. Developers who use Microsoft’s source code to debug their applications, but who do not incorporate any of Microsoft’s source code in the application, have created an enhancement. They have ownership rights to that enhancement and can freely distribute without giving Microsoft any rights or access to the code.

In general, the owners of company improvements and enhancements (Microsoft is the owner of platform modifications) may patent their work, but they cannot assert any patent claims against Microsoft or other licensees of Windows CE, except for OEMs; they must, however, license their patents to OEMs on reasonable and nondiscriminatory terms.

Looking Ahead

The CEPD and CEPDR offer CE licensees new scope for innovation, but the rules around ownership and licensing of intellectual property are only a first step. In spite of Microsoft’s promotion of the Shared Source Initiative as a boon for the "commercial software model," the rules governing redistribution of changes to the source code do not offer commercial developers much advantage, in the long run, over open-source licenses, such as the GNU Public License (which governs Linux). Both licenses require that modifications to source code be freely licensed to the entities that developed the OS, thus limiting the opportunity for commercial developers to benefit financially from changes that differentiate their products from others.

However, the CEPD and CEPDR are undeniably more liberal programs than Microsoft has offered in the past, and Microsoft calls its CE source-code licensing programs an "evolving framework," so further modifications are possible.

More information about Microsoft’s Shared Source Initiative and the new CE licensing programs is at www.microsoft.com/sharedsource.