A venture capital firm has given $10 million to a Swedish company that is set to launch an operating system to challenge Microsoft.
Xcerion will emerge from stealth mode to launch its web-based OS and a marketplace for hosted software later this year, backed by Swedish venture company Northzone Ventures, Xcerion CEO Daniel Arthursson said in an interview.
The company already has some big-name investors backing it, including one of the original architects of Windows NT and a former Microsoft general manager, Lou Perazzoli, and former Microsoft CFO John Connors.
Arthursson said Xcerion, which was formed in 2001, set up an office in Seattle two years ago, and its founders began networking in the area to gain the support of the former Microsoft executives.
Xcerion has developed an OS that works in the browser, which developers can use to build web-based versions of existing software or new applications quickly and without having to port them to different OSes, he said. The company will also host the applications and make them available in an online marketplace.
Users can choose to either run ad-supported versions of the applications for free, or pay a small fee - about $5 or $10 per year - to run them ad-free, Arthursson said. The company will manage subscriptions for third-party vendors and give them about 80 percent or 90 percent of the subscription revenue, while keeping a small percentage for its hosting and management services, he said.
"If you [look at] the current marketplace, there are probably only about 50 to 300 applications that are the main ones people use today on their desktop computers," he said. "If you can recreate these and use it within our own OS, people won't have to use those applications on the desktop and can stop buying licensed software."
Users also can run applications built on Xcerion's XML Internet OS when they are offline, Arthursson said. Any information saved when they are running the application offline will be immediately updated to the online version when they reconnect to the internet.
Xcerion is hoping to do for web-based application development what Microsoft did for applications development on the desktop, Arthursson said. "In some sense, we're working in the same direction [as Microsoft]," he said.
Google also has promoted itself as a platform on which developers can build web applications, but so far the company's services have not really caught on with business users.
Arthursson said he hopes Xcerion will partner with many of Microsoft's ISVs so they can offer versions of their software online. He said he expects ads sold for applications offered through Xcerion's marketplace will likely be the No. 1 source of revenue for the company, while subscription services managed for third-party applications will be its second biggest revenue stream.
Microsoft, too, has been ramping up its strategy to offer web-based applications.
When Xcerion launches its Internet OS - which is expected by the end of the third calendar quarter - it also will launch its own web-based office productivity suite that will run on it. The suite will include a word processor, a spreadsheet, a PowerPoint clone and an email and calendar application, Arthursson said.
The differentiator between Xcerion's productivity application and Google Apps is the ability for it to run when a user is offline, he said. Microsoft, too, is said to be developing a web-based version of its Office suite, but has not officially made an announcement about the product.
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