(from top to bottom) Bryan Willman, John Manferdelli, Paul England, and Peter Biddle of Microsoft are helping to make PCs more secure
The Big Secret
An exclusive first look at Microsoft’s ambitious-and risky-plan to remake the personal computer to ensure security, privacy and intellectual property rights. Will you buy it?
By Steven Levy NEWSWEEK
July 1 issue — In ancient Troy stood the Palladium, a statue of the goddess Athena. Legend has it that the safety of the city depended on that icon’s preservation. Later the term came to mean a more generic safeguard.
HERE’S SOMETHING THAT cries for a safeguard: the world of computer bits. An endless roster of security holes allows cyber-thieves to fill up their buffers with credit-card numbers and corporate secrets. It’s easier to vandalize a Web site than to program a remote control. Entertainment moguls boil in their hot tubs as movies and music are swapped, gratis, on the Internet. Consumers fret about the loss of privacy. And computer viruses proliferate and mutate faster than they can be named.
“It’s one of the most technically complex things ever attempted on the PC,” says Gartner analyst Martin Reynolds. And the new additions will make your next computer a little more expensive. Will the added cost—or a potential earlier-than-otherwise upgrade—be worth it? Spend a day or two with the geeks implementing Palladium—thrilled to be talking to a reporter about the project—and you’ll hear an enticing litany of potential uses. Tells you who you’re dealing with—and what they’re doing. Palladium is all about deciding what’s trustworthy. It not only lets your computer know that you’re you , but also can limit what arrives (and runs on) your computer, verifying where it comes from and who created it. Protects information. The system uses high-level encryption to “seal” data so that snoops and thieves are thwarted. It also can protect the integrity of documents so that they can’t be altered without your knowledge. Stops viruses and worms. Palladium won’t run unauthorized programs, so viruses can’t trash protected parts of your system. Cans spam. Eventually, commercial pitches for recycled printer cartridges and barnyard porn can be stopped before they hit your inbox—while unsolicited mail that you might want to see can arrive if it has credentials that meet your standards. Safeguards privacy. With Palladium, it’s possible not only to seal data on your own computer, but also to send it out to “agents” who can distribute just the discreet pieces you want released to the proper people. Microsofties have nicknamed these services “My Man.” If you apply for a loan, you’d say to the lender, “Get my details from My Man,” which, upon your authorization, would then provide your bank information, etc. Best part: Da Man can’t read the information himself, and neither can a hacker who breaks into his system. Controls your information after you send it. Palladium is being offered to the studios and record labels as a way to distribute music and film with “digital rights management” (DRM). This could allow users to exercise “fair use” (like making personal copies of a CD) and publishers could at least start releasing works that cut a compromise between free and locked-down. But a more interesting possibility is that Palladium could help introduce DRM to business and just plain people. “It’s a funny thing,” says Bill Gates. “We came at this thinking about music, but then we realized that e-mail and documents were far more interesting domains.” For instance, Palladium might allow you to send out e-mail so that no one (or only certain people) can copy it or forward it to others. Or you could create Word documents that could be read only in the next week. In all cases, it would be the user, not Microsoft, who sets these policies.
Some of these ideas aren’t new—they’re part of the promise of public key cryptography, discovered 25 years back. Palladium is a dead-serious attempt to finally make it happen, with a secure basis and critical mass. But it didn’t start that way. In 1997, Peter Biddle, a Microsoft manager who used to run a paintball arena, was the company’s liason to the DVD-drive world. Naturally, he began to think of ways to address Hollywood’s fear of digital copying. He hooked up with ’ Softie researchers Paul England and John Manferdelli, and they set up a skunkworks operation, stealing time from their regular jobs to pursue a preposterously ambitious idea—creating virtual vaults in Windows to protect information. They quickly understood that the problems of intellectual property were linked to problems of security and privacy.
They also realized that if they wanted to foil hackers and intruders, at least part of the system had to be embedded in silicon, not software. This made their task incredibly daunting. Not only would they have to build new secrecy functions into Windows (without messing up any programs that run on the current versions), but then they’d have to convince the entire industry to, in effect, update the basic hardware setup of the PC. Intel originally turned down the idea before eventually embracing it. AMD had already been thinking along similar lines, and eagerly signed on. Biddle’s virtual team kept working, and in October 2001, it became a formal green-lighted project.
As now envisioned, Palladium will ship “in a future version of Windows.” (Perhaps in the next big revision, due around 2004.) By then the special security chips will be rolling out of the fabs, and the computer makers—salivating at an opportunity to sell more boxes—will have motherboards to accommodate them. There will also be components that encrypt information as it moves from keyboard to computer (to prevent someone from wiretapping or altering what you type) and from computer to screen (to prevent someone from generating a phony output to your monitor that can trick you into OKing something you hadn’t intended to). Only certain applications will access the part of Windows (nicknamed “the nub”) that performs Palladium’s functions with the help of the security chip—everything else will work exactly the same. The first adopters will probably be in financial services, health care and government—places where security and privacy are mandated. Then will come big corporations, where information-technology managers will find it easier to control and protect their networks. (Some employees may bridle at the system’s ability to ineluctably log their e-mail, Web browsing and even instant messages.) “I have a hard time imagining that businesses wouldn’t want this,” says Windows czar Jim Allchin. Finally, when tens of millions of the units are in circulation, Microsoft expects a flood of Palladium-savvy applications and services to spring up—that’s when consumers will join the game. None of this is a cinch. One hurdle is getting people to trust Microsoft . To diffuse the inevitable skepticism, the Redmondites have begun educational briefings of industry groups, security experts, government agencies and civil-liberties watchdogs. Early opinion makers are giving them the benefit of the doubt. “I’m willing to take a chance that the benefits are more than the potential downside,” says Dave Farber, a renowned Internet guru. “But if they screw up, I’ll squeal like a bloody pig.” Microsoft is also publishing the system’s source code. “We are trying to be transparent in all this,” says Allchin.
Tells you who you’re dealing with—and what they’re doing. Palladium is all about deciding what’s trustworthy. It not only lets your computer know that you’re you , but also can limit what arrives (and runs on) your computer, verifying where it comes from and who created it.
Traveling Sharks
