Microsoft has announced plans to launch another version of its Windows XP operating system.

The operating system will feature plug-and-play functionality for easy integration of retail peripheral devices, such as scanners and cash drawers, support for the United Point of Service (UPOS) standard, and support both Win32-based applications and the .NET Framework. Also planned is support for emerging technologies, including Radio Frequency Identification (RFID), biometrics and wireless networking.

Backing the planned operating system are 30 retail and hospitality device and application manufacturers and systems integrators, working with Microsoft to develop systems based on Windows Embedded for Point of Service.

Microsoft already provides embedded operating systems, through Windows XP Embedded and Windows CE. Windows XP Embedded has been integrated with POS devices, like cash registers, while Windows CE runs on devices with small footprints. However, Microsoft appears to be making it easier for customers to integrate the operating system with a range of new and emerging retail technologies and point of sale devices.

Driving this, in part, is recent years’ growth in e-commerce combined with the emergence of handheld and wireless technologies leading to the rise of self-service kiosks and scanning devices, connected via base stations and wireless networks. Microsoft, though, also faces a growing challenge from Linux, used increasingly as an embedded operating system for retail devices to replace inhouse and proprietary operating systems.

Announcing Windows XP Embedded for Point of Services, Microsoft claimed that using familiar deployment technologies and support for management systems such as Software Update Services 2.0, Windows Update Services and Systems Management Server 2003 with a platform support policy of 10 years, reduces deployment, servicing and support costs through the POS’s lifecycle. Microsoft has argued its stack of integrated software produces reduced total cost of ownership compared to Linux elsewhere in the industry.

Windows Embedded for Point of Service also comes at a time when ISVs and platform providers are looking to provide software suited to specific needs of vertical sectors, moving beyond delivery of generic platform technologies. IBM has led the way, re-organizing its software sales force around vertical sectors late last year and recently launching 15 middleware packages for verticals, based on WebSphere, DB2, Tivoli, Lotus and Rational.