Applied Microsystems and BSQUARE Ally to Provide Software and Tools for Intelligent Device Development.

Business Editors/High Tech Writers

REDMOND, Wash.--(BUSINESS WIRE)--Jan. 12, 2000

The Partners Now Offer Comprehensive Software-Hardware

Approach for Developing Devices Based On the

Windows CE and Windows NT Embedded Operating Systems

Applied Microsystems Corp. (AMC) (Nasdaq:APMC), a leading innovator in software development solutions, and BSQUARE Corp. (Nasdaq:BSQR) have agreed to cross-reference each other's products.

Both will now be able to provide their respective customers across-the-board, one-stop shopping for development of Windows CE- or Windows NT-based intelligent computing devices. The broad solutions now offered include everything a developer will need for expediting a project, including operating system licenses, software development tools, software engineering services, platform testing, application verification, emulators, debugging tools, and more.

This agreement helps developers of products as diverse as mobile networked computers, set-top boxes, Web-aware telephones, and other Internet-related products, to save time in two different ways: 1) One-stop shopping means they will be able to acquire everything they need to get a project up and running more rapidly; 2) Immediately thereafter, the ease-of-use and power of the AMC's and BSQUARE's tools will allow them to develop their applications faster and more efficiently.

AMC will refer its customers to BSQUARE's Windows(R) CE licensing capability, Windows CE and Windows NT Embedded professional engineering services, CE Xpress(TM) Platform Development Kits, and CEValidator Quality Assurance tools for the two Microsoft operating systems. BSQUARE will refer its customers to AMC's emulator debugging tools as well as its CodeTEST(R) and LiveCODE(TM) tools.

One of the biggest advantages of the alliance will be the complementary nature of the two companies' products and the availability of complete development solutions for the customer. In a typical development scenario, developers will use a combination of AMC's debugging tools together with BSQUARE's CE Xpress Kits and CEValidator to ensure robust Windows CE hardware adaptations. At the application development stage, customers use BSQUARE's CEValidator's Application Test Library to automatically verify the functionality of the application and use AMC's CodeTEST to analyze the application's performance, trace and verify code coverage. The end result is a completely validated hardware and software system brought to market in the shortest possible time.

"Many of the engineers who are using our debugging tools to develop CE-based and NT-based products are looking for the additional services and support that BSQUARE excels at providing," said Mark Budzinski, Applied Microsystems' vice president of marketing. "Our customers will be well-served through our partnership with the leading supplier of Windows CE operating systems and services."

According to David Bialer, BSQUARE's general manager, "We welcome the opportunity to provide additional tools to our customer base, and are pleased to form this strategic alliance with Applied Microsystems. With our product line spanning the entire development cycle for the new class of Windows CE- or Windows NT Embedded-based intelligent computing devices, the products from Applied complement our end-to-end solutions strategy well. Customers will benefit from one-stop shopping at BSQUARE."

About BSQUARE

BSQUARE is a dynamic software company working with Fortune 500 companies to enable the age of intelligent computing devices. Specializing in Windows CE and Windows NT Embedded, BSQUARE supplies software products and services for the development and use of PC Companions, Internet appliances, industrial automation devices, Windows-based terminals, and other intelligent computing devices. BSQUARE's expertise in embedded Windows is derived from years of contributing to the development of the Windows CE operating system, from serving as a Microsoft preferred provider of Visual Tools for Windows CE, and from in-depth experience with Windows NT. BSQUARE is a Microsoft-sanctioned systems integrator and distributor.

For further information, visit BSQUARE at www.BSQUARE.com or call 888/820-4500.

About Applied Microsystems

Applied Microsystems is a leader and innovator in software development tools and technologies. AMC's products help OEM customers bring products to market faster by providing innovative tools to develop, debug and test products faster, more reliably and at a lower cost. AMC's embedded development solutions currently include the following:

-- CodeOPTIX(TM) high-level software visibility tools based on

instrumentation for application software verification, analysis

and test as well as in-target, on-the-fly debugging;

-- Development tools for 3rd party operating systems such as

Microsoft Windows(R) CE, WindRiver's VxWorks(R), Integrated

Systems' pSOS(TM), and Lynx Real-Time Systems' LynxOS(TM)

operating systems;

-- Support for development, debug and testing of advanced 32-bit

microprocessors such as the PowerPC and Pentium II; and

-- Custom engineering capability to provide OEM customers with

specialized tools, intellectual property and design services.

The company can be reached at P.O. Box 97002, Redmond, Wash. 98073-9702. Telephone: [phone]. E-mail [e-mail]. Browse: www.amc.com.

Forward-looking statements in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. These factors include, without limitation, future market opportunities for products and relationships with third parties in the U.S. and internationally, customer order cycles and product acceptance, the Company's ability to manage growth, sufficient availability and retention of qualified personnel, changes in international operations, foreign exchange rate risks, changes in market conditions for the Company's products, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.

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