Smart Cards: Coming Soon to a Device Near You

REDMOND, Wash., Oct. 8, 1999 — While traveling in a strange city, a woman becomes ill, locates an urgent-care facility and hands the doctor on duty a plastic card. The doctor scans the card’s contents, reviews the woman’s medical history and quickly learns what he needs to know to confidently diagnose and treat his new patient. An hour later, a pharmacist scans the same card to make sure the patient isn’t taking medication that could react negatively with her new prescription.

A bicycle courier uses a mobile phone to receive e-mail securely and conveniently, check his calendar, add 100 shares of a new technology stock to his portfolio and play the lottery — all during his lunch hour.

A would-be hacker tries to bypass security protocols and gain access to sensitive data on a bank’s private network. Instead of seeing the instructions
“Please enter username and password”
on his monitor, however, he reads:
“Please insert your smart card.”

Move over ATM cards, credit cards and frequent-flier mileage cards. It’s time to make room in the wallet for a more multipurpose hunk of plastic.
“Smart cards”
will soon become commonplace — a prospect that should be welcome news for anyone affected by the current boom in e-commerce, networks, mobile devices and Web-based communication.

The momentum behind this new technology wave is in evidence at the Smart Card ’99 Business Development Conference, which concludes today at the Microsoft campus in Redmond, Wash. Co-sponsored by Infineon Technologies AG, a leading smart card chip manufacturer, the two-day event drew nearly 200 attendees, including smart card and chip manufacturers, smart card issuers, industry analysts and independent software vendors (ISVs).

The conference features insightful presentations on smart card technology as well as updates on Microsoft’s smart card activities — in particular, the company’s commitment to the Smart Card for Windows®
operating system, due to be released later this year. The conference showcases some of the intriguing smart card solutions that ISVs are developing for vertical markets. Among those demonstrating smart card solutions Thursday were Litronic, TTI, Utimaco, Authenic8, Cybermark and FDC.

Today’s conference agenda features a customer panel discussion, additional information on Microsoft programs designed to advance the fledgling smart card industry, and an address by Microsoft Chairman and CEO Bill Gates, who will explain why the company is backing smart card technology.

Microsoft believes that the intrinsic portability and security of smart cards makes this platform a logical next step at a time when people are seeking smaller, easier and more convenient ways to store, carry and access vital data.

A Smart Technology

A smart card is a device that looks and feels like a credit card but acts like a computer. It has a built-in microprocessor that can encrypt data and includes on-board storage. It’s also programmable, which means that applications and data can be downloaded onto the card for a wide range of uses.

A smart card works something like a prepaid phone card, but unlike a single-purpose card a smart card will enable multiple types of transactions. For example, a single card could contain a person’s electronic airline tickets and frequent flyer miles, money, itinerary and travel preferences. Or, one card could grant an employee access to an office building and verify that she’s authorized to log on to her PC and the company network.

Approximately 1.1 billion smart cards were in circulation in 1997. The vast majority were issued in Europe, where they are used routinely for banking, health care and other government-sponsored social programs.

One reason smart cards haven’t been adopted on a broader international scale is that historically they have been based on proprietary systems. Microsoft hopes to change that by investing significant resources in activities intended to foster growth of the smart card industry.

“Microsoft’s role in the smart card industry has three components,”
Gates said.
“We must provide core technologies as part of an end-to-end solution, we must enable smart card manufacturers and systems integrators to add value on top of this platform, and we must enable corporate customers to define their own solutions.”

A New Version of Windows Built for Smart Cards

Building an industry-accepted platform is a key thrust of Microsoft’s smart card initiative. Available in November to software developers and equipment manufacturers, Microsoft Windows for Smart Cards is a small-footprint operating system with a straightforward architecture, developed specifically for smart card solutions.

“Windows for Smart Cards extends the PC environment into the smart card arena and brings the benefits of the Windows architecture to this new platform,”
said Mike Dusche, product manager of Smart Card for Windows.
“By extending Windows to a small form factor, we are enabling end-to-end solutions that use a mature, accepted and familiar environment.”

The 8-bit, multi-application Windows for Smart Cards operating system is an open, low-cost and easy-to-program platform that runs applications written in the Microsoft Visual Basic® and Visual C++®
development systems. Thus, the newest member of the Windows operating system family capitalizes on the same development and debugging tools used by millions of ISVs and in-house developers writing software for the desktop and the back office.

“Smart cards powered by Windows for Smart Cards will rapidly become the de facto standard for network security and Internet applications,”
said Michel Roux, vice president of Strategic Alliances at Gemplus, a leading smart card solution provider headquartered in France.
“Close cooperation with smart card industry leaders such as Gemplus will rapidly bring Microsoft technology at the highest level of performance and security to the enterprise, while taking full advantage of the seamless integration with Windows-based architectures and unsurpassed ease of application development.”

Dusche noted that the Microsoft Windows Smart Card Toolkit, which will be released publicly in November, will provide a configurable operating system and tools for building and deploying smart card solutions for corporate network security, data encryption, health care, finance and consumer applications.

In addition to
“putting Windows on a card,”
he said, Microsoft is also
“putting the card into Windows.” Microsoft has been building smart card functionality into all Windows operating systems for the past two years, including Windows 95/98, Windows NT®
4.0, Windows 2000 and Windows CE 3.0.

Open-Ended Application Potential

This week’s Smart Card Business Development Conference offered ample opportunity to demonstrate the flexibility, utility and power of the new Windows for Smart Cards operating system. Conference attendees learned that smart cards can be used for secure and portable data access in a countless range of applications.

According to Ovum Ltd., the most promising applications for smart card technology are prepaid services, electronic cash and controlling access to buildings, computers and networks. Ovum predicts that the market for smart card units will reach 2.7 billion by 2003. Potentially, the platform could be used to help distribute food stamps, store traffic violations, or verify a consumer’s age for tobacco and alcohol purchases. Internet merchants could use smart cards to obtain a digital signature when consumers buy goods or services.

The Smart Card ’99 conference also presented information on the Windows for Smart Cards platform’s new native support for GSM (Global System for Mobile Communications), an advanced, open European telecommunications standard that has proven highly successful in mobile phone markets. Adding GSM support to Windows for Smart Cards dramatically broadens the marketplace for smart card manufacturers.

“The Microsoft Windows Smart Card Toolkit has been a preferred platform with smart card applications for Sagem because of its strong tools, ease of use and industry-standard technology,”
observed Philippe D’Andrea, vice president of marketing at Sagem, a high-technology company headquartered in France.
“Now that Microsoft has expanded it to include GSM support, we look forward to shorter time to market while building highly customized mobile solutions for the GSM carriers we are working with.”

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