Palladium is the codename for Microsoft's latest security initiative announced on Monday, which is designed to create a "trusted space" within a PC for certain programs and other sensitive operations to run in.
The system will require security hardware, in the form of a chip, as well as software. The combination of hardware and software security could allow users to create documents and e-mail messages that expire after a certain amount of time, Microsoft said.
It could also let music and movie companies take advantage of native support for digital rights management software that could let them limit how their content is copied or shared, and could stop users from running code that is not digitally signed, Microsoft said.
Windows users will get most of Palladium's benefits, at first, although Microsoft said that it plans to make the system interoperable with other platforms. Microsoft may publish the source code to to allow third parties, including competitors, to create systems that interoperate with Palladium.
Some Microsoft competitors were, unsurprisingly, less than excited about the announcement of Palladium.
"Microsoft is enamoured with the closed world it's built with the Xbox where it controls what software can run. It believes it can use that strategy to restrict competition and increase its control in the PC arena," said Michael Robertson, chief executive officer of Linux desktop operating system start-up Lindows.com.
"Open systems beat closed systems - it's what has made the PC and Internet so successful. Microsoft is proposing reduced consumer freedom over their computer and their media while cleverly disguising it as improved privacy," Robertson said.
Microsoft is engaged in legal action to bar Lindows from using that name for its Linux-based operating system, saying that it infringes on Microsoft's Windows trademark.
Sun Microsystems also took a swipe at the Palladium initiative. "We look forward to Microsoft addressing its immense security issues: bug fixes are only a temporary treatment for the symptoms of flawed product design and is not a permanent cure for the disease," the company said. "However, it is good to see Microsoft finally taking code quality seriously."
Third-party security companies have been the beneficiaries, and have borne some of the burden, of the security flaws in Microsoft's operating systems and applications. Although Microsoft may now be moving into its market, one such company, RSA Security, welcomed Palladium.
John Worrall, vice-president of product management at RSA, believed Palladium is "a great thing for security", adding, "Starting from the base hardware and building up is a great model."
Palladium could also re-ignite the issues that led to the antitrust legal action against Microsoft. However, Bob Schneider, a partner and the head of intellectual property department at the Chicago law firm Chapman & Cutler played down these concerns.
Palladium "could be [an extension of the Windows monopoly], but I don't think it has risen to that level," he said. Because Palladium depends so much on the hardware component, the system, as described, may not become an antitrust concern, he said.
"The answer depends more on how it's developed and how Microsoft uses it. [Microsoft's] innovation often leads to detrimental results for their competitors," Schneider added. One step that could minimise that impact would be publishing Palladium's source code, he said.