It proposes to enhance future PCs with a security technology called Palladium in conjunction with Intel and AMD.
The new architecture would see a special security chip used for encryption added to PCs, along with new APIs (Application-Program Interfaces) created to allow programs to be written to take advantage of Palladium.
According to Microsoft, Palladium will create a secure space within a PC in which users will be able to run applications and store data. The secure space will not be accessible to the rest of the PC. One of the goals of the architecture is to prevent a virus that has infected the non-Palladium part of the computer from spreading into the secure Palladium area.
Among possible applications of the technology are authentication of communications and code, data encryption, privacy control and digital rights management (DRM).
The system is composed of three components, an authentication system, hardware chips and software, called the "nub", which handles the security tasks. The three components work in parallel with the operating system, with security tasks moved out of the operating system onto the "secure" Palladium system.
Martin Reynolds, a research fellow with market analysis firm Gartner who was briefed on Palladium, said,"It is a very clever system," adding, "you can't crack it in the conventional sense."
Conventional cracking of the technology would be difficult because when an attacker tries to forge or attack the digital signatures used in the authentication component, the nub loses its encryption keys, making the system unable to communicate, he said.