Microsoft (NASDAQ:MSFT) has said it intends to have one operating system for all types of devices. It apparently takes that promise seriously. The company, which has announced that Windows 10 will power not only PCs but also tablets, phones, and even Xbox, will also make a version of the OS for Internet of Things connected devices.

These machines -- which include things like smart thermostats and other household appliances -- won't run the full operating system. Instead, they will run customized versions of Windows 10 designed to enable their functionality. Whether it's a smart toaster or a complicated piece of machinery in a factory, Windows 10 will power it -- or at least that's what Microsoft hopes will happen.

Microsoft laid out how the operating system will work on the IoT at its recent Build developer's conference in a presentation led by Sam George and Steve Teixeira, two executives from its IoT group.

IoT is an opportunity
The presentation started with George and Teixeira laying out what Microsoft sees as the opportunity created by the IoT. The pair showed a number of reasons why the the world is moving rapidly toward a connected future, as seen in the graphic below.

Source: Microsoft

Teixeira explained that it is the confluence of these factors that drives demand and creates opportunity. For example, connectivity used to be slow and expensive, he said, "Today between 3G, 4G, mobile data as well as broad Wi-Fi coverage, data is almost there and you can depend on that for building new solutions."

Add in cheaper hardware, easier development, and increasing demand, and you have market forces pushing the IoT forward.

"We can marry all these together. It's no longer just about these devices in the world kind of working independent of one another," George said. "It's these devices connected to one another, connected to the cloud producing a solution that really exceeds the sum of all the parts ... People see the value and it fuels the demand for more."

George cited a statistic from Gartner saying that there will be 25 billion IoT-connected devices by 2020. He also referenced an IDC study which says the market will grow to $7.2 trillion by that year.

"We are convinced that we are in the next generation of computing and that it's going to be big," he said. 

Comprehensive solutions from device to cloud
However big the market gets, Microsoft intends to serve it through Windows 10 from "the smallest devices through the large devices to massive hyper-scale cloud," Teixeira said.

The company will do that, he stressed, using one platform.

"Whether its Hololens or Raspberry Pi or WIndows desktop or phone [it's all one platform], he said. "You can extend that to the IoT editions ... It's the same platform ... and it's Windows, so you know it can go into enterprise."

It's free for IoT
The "IoT Core Edition" of Windows 10 will be free. (This was expected, since Microsoft has stopped charging for Windows on certain tablets made by its OEM partners.)

That's a seemingly minor concession, but it's important because even a small charge might make Windows a less attractive option for developers.

Security is key
"We're putting a big priority on end-to-end security," George said while speaking about how Windows and IoT will work on the company's Azure cloud platform. 

He noted that IoT is a new world when it comes to keeping devices safe. Because of that, Microsoft is "following all of the industry best practices, but we have some ideas to take it further," he said. 

What one OS means
No matter what the hardware platform, Microsoft will have universal apps, universal drivers, and a universal interface that adapts for the screen you are using it on. That does not mean your smart coffee machine will be able to play Angry Birds, but you will be able to communicate with it across your phone, tablet, PC, or even some wearables.

The goal of the universal platform Teixeira explained is simplifying things for developers. "I apologize. We made you guys write multiple, different drivers to get one piece of hardware to work across the ecosystem," he said after detailing just how much work it used to take to work in the previous Windows setup. 

He added that in the end, the whole goal of Windows 10 for IoT is building better, more responsive hardware.

"I don't just want to make devices necessarily that are just sitting passively in the corner," Teixeira said. "I want devices that I can talk to, that can see me, that can understand my gestures."