SanDisk, Microsoft join hands to develop next-gen smart drives

Flash memory maker SanDisk on Friday has joined forces with the world's largest software maker Microsoft to build a new generation of USB Flash Drives and Flash Memory Cards that let users carry a personalized desktop and applications to any Windows PC.

Under the agreement, the Milpitas-based SanDisk, a maker of flash-memory chips that also builds the Sansa line of MP3 players, will develop the hardware capabilities, including the addition of TrustedFlash security technology, and Redmond, Washington-based Microsoft will develop the software for the platform of flash memory cards and USB flash drives.

Companies’ latest move expands on, and will finally replace SanDisk's existing U3 Smart Technology, which allows users to transfer personal Windows applications, including Web browsers, e-mail programs, multimedia apps and productivity tools onto flash drives, without leaving behind information on the computer they plugged the drive into.

Users will be able to plug a card into a reader, or a drive into a USB port, on machines packed with Microsoft’s flagship software Windows Vista or Windows XP, so they can access their personal files, and can keep the information on the portable devices encrypted and safe.

"SanDisk and U3 forged the category of smart USB devices, elevating simple flash storage to a whole new level of customer benefit," said Will Poole, corporate vice president of Market Expansion Group at Microsoft. "We are excited to work with SanDisk on this next-generation experience, which will allow hardware manufacturers to better differentiate their products and provide an even richer software and services experience for customers."

SanDisk will integrate the combined software and hardware solution on removable flash memory cards and Cruzer USB Flash drives. Powered by TrustedFlash, the new technology will also feature enhanced security measures that SanDisk claims will be able to protect user files with personal information from malware on public or shared computers.

"The U3 platform was established with the vision of giving customers a consistent and portable computing experience. The existing 20,000 U3 software developers that joined us show the potential for smart flash memory devices," said Yoram Cedar, executive vice president of SanDisk’s mobile business unit and corporate engineering. "We expect this relationship with Microsoft will raise the overall experience for consumers given Microsoft's unique software expertise, and grow the momentum given the large community of 3rd party companies capable of utilizing Microsoft's technologies."

Launched in 2005, U3 technology was developed by U3 LLC, a joint venture of SanDisk and m-systems. SanDisk acquired m-systems last year in November, and U3 LLC today is a wholly owned subsidiary of SanDisk.

SanDisk, the original inventor of flash storage cards, will continue to actively support the U3 organization and product until the new offering is released to the public next year. SanDisk is the world's largest supplier of flash data storage card products using its patented, high-density flash memory and controller technology.

Founded in 1975, Microsoft is the worldwide leader in software, standing firm on their mission to provide top-tier technology, deliver great software and reliable services.

Both companies expect to make the new flash drives available in the second half of 2008.

SanDisk shares were trading at $44.90 in the pre-market session, up 80 cents, from Thursday's closing price of $44.10.