Interestingly, there has been a similar slimming down in the embedded operating systems space, Gardner said. "It's really a natural occurrence" as a software applications gain features and become bloated, then make room for newer, leaner systems, he said. "Everytime it gets too big, there's going to be another opportunity in the market. "Some people want prix fixe, and some want ' la carte."

Xandros Server Standard Edition, which is in production and will be released May 1, will work with Windows, SUSE Linux, Red Hat Linux and other Linux distributions, according to the company. The server operating system will begin at US$449 per server and includes a groupware server, backup server, print server, streaming media server and more. A Web server and other versions are also being contemplated.

Xandros will release the next version of its desktop operating system, Xandros Linux 4.0, in June.