Microsoft is set to drop Windows Media Centre as a seperate package instead they will bundle it into the next Windows Vista operating system which is expected to jump-start the software giant’s home entertainment software business.

System builders briefed in the US last night on Microsoft’s plans to put the software directly into consumer editions of Windows Vista later this year say the move will also spark their businesses.

The recent appointment of Windows Media Center Product Manager Justin Hutchinson to lead the channel charge could also drive more business for OEMs, ISVs and digital integrators. Hutchinson said that the deep resources and formidable marketing power ofWinTel to drive a mainstream Windows upgrade into the home will accelerate adoption of Media Center features significantly.  “The fact that Microsoft and Intel are teaming on digital entertainment means nothing but great things for the channel,” he says.

Many partners that built their first Media Center Edition systems in 2005 exited the market soon after due to lackluster sales, which they blame in part on poor demand generation from Microsoft and inconsistent support for system builders. They also say Microsoft’s failure to appoint a channel leader for its Media Center efforts caused confusion and inertia. The appointment of Hutchinson will erase some of that frustration, partners say.

“This is a huge benefit for resellers,” says Kevin Hartin at Altech “It will not differentiate much from what we have now. What you will have is different flavours of Vista Consmer edition with Media Centre features. We are currently running aq beta version of the new software. It has better DRM features. One can RIP a DVD to the Media Centre hard disc butusers will not be able to copy it. They will be able to see it over an extender network”. he said

Hartin also admitted that Altech are looking to expand there Media Centre offerings and are currently considering talking to Nivius a Company that already has a dealer relationship with Pioneer Australia. “WE have made no decisions on this box but we are looking at the possibility  of trying to distribute it in Australia as Pioneer do not have it exclusive. Harin also said that Altech was moving to new Zalman casings for its Media Centre Maestro range. Analysts agree. “Microsoft is long overdue in creating a consumer operating system that includes core features for media, entertainment, and family security, and Vista will include much of this ability,” says Ted Schadler, vice president of Consumer Technology at Forrester Research.

Intel’s Viiv is a big factor driving channel acceptance of the Vista plan. Many builders are in the process of designing next-gen Media Center systems based on the platform. Viiv, for example, requires use of Windows XP Media Center Edition 2005 Update Rollup 2 or Windows Vista.  “I don’t see where we wasted any time because the existing Media Center has run its course. It’s not a negative thing,” says Denzel Lane, manager of Digital Home PC, Witchita, Kansas. “The 2005 edition has been around long enough so it’s time for a change.”

And change is what partners will get. Partners who tested Community Technology Previews (CTP) of Windows Vista in late 2005 and early 2006 saw early incarnations of the expanded Media Center user interface and new functions for recorded programs. Vista Media Center UI, for example, allows users to navigate menus horizontally. Microsoft also plans to offer high-definition TV support over the air, native digital cable support and tight synergies with Windows Media Player 11 and Vista’s search and organize features. That will give users Tivo-like functionality and iTunes-like functionality.

Version 1.5 of Viiv, due in the middle of the year, will be optimized for Vista and include digital rights management features to allow sharing of content over Microsoft’s media extender technology. This alone makes Media Center more palatable to home users.

System builders also expect that the combination of Viiv and Vista will enable partners to create new form factors–and thus more powerful and consumer-friendly home entertainment appliances than in the past.

The Viiv platform is “really bringing Media Center into its own,” says Steve Bohman, vice president of operations for Columbus Micro, Ohio, adding that system builders are not going to be shocked because they must redesign and re-qualify their systems to make them Viivi-compliant. “Most system builders won’t be surprised that Vista is rolling in those media center capabilities. It’s reached the point where that’s what consumers expect.”

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