Update: Microsoft plans security chip for next Windows

IDG News Service - Microsoft Corp. wants to change the fundamental architecture of the PC, adding security hardware prior to a future release of its Windows operating system, the company acknowledged today after a media report and an analyst briefed by the company said as much.
The company wants future PCs to contain a security technology called Palladium and is in discussions with Intel Corp. and Sunnyvale, Calif.-based Advanced Micro Devices Inc. to develop the chips, according to a report in the July 1 issue of Newsweek magazine published Sunday on the MSNBC Web site. Microsoft owns a stake in MSNBC.

Palladium "is really about security, privacy and system integrity," said Mario Juarez, group product manager for the content security business unit at Microsoft. "We're talking here about rearchitecting the PC platform."

The new architecture, as described by Juarez, would see a new security chip used for encryption added to PCs, along with new application programming interfaces (API) created to allow programs to be written to take advantage of Palladium, he said. Palladium may also cover chip sets, graphics processors and Universal Serial Bus (USB) I/O systems, he said.

Though Intel and AMD have been involved in design discussions to ensure that Palladium will work with existing processor architectures, it is too early to say whether they will manufacture the encryption chip, Juarez said. Other companies have also been involved in the design of the system and will continue to be part of the process, he said.

Palladium will create a secure space within a PC in which users will be able to run applications and store data, he said. The secure space will not be accessible to the rest of the PC, meaning that a virus infecting the non-Palladium part of the computer wouldn't make its way into the secure area, Juarez said.

The time frame for Palladium's inclusion into Windows is uncertain for now, as the initiative is only in its early stages, he said.

Among possible applications of the technology are authentication of communications and code, data encryption, privacy control and digital rights management (DRM), according to the Newsweek report. Microsoft was awarded a U.S. patent on a "digital rights management operating system" in December, though Juarez could not definitely say that that patent was directly related to Palladium.

The system incorporates three components: an authentication system, hardware chips and software, called the "nub," that handles the security tasks, according to Martin Reynolds, an analyst at Gartner Inc. in Stamford, Conn. Reynolds was briefed on Palladium by Microsoft.

The three components

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