Microsoft plays smart card leapfrog

Microsoft will literally have a licence to print money if joint venture talks with De La Rue come off. The software giant is prepared to take a "strategic stake" in De La Rue to underwrite the co-operation of Europe’s biggest banknote printer in developing Windows for Smart Cards. De La Rue is big in bank note printing (a curiously unprofitable business) security printing, and in magnetic swipe cards. But it simply does not have enough money to compete successfully in the smart card market, according to yesterday’s Financial Mail on Sunday. De La Rue’s financial PR spin doctors appear to be working overtime on this one. Reports of a De La Rue deal first surfaced in The Sunday Times in October and faithlessly reported here. The story now has more meat on the bone with the FMoS leak. De La Rue prints security certificates for Microsoft, but it now seems that the software giant’s real interest lies less in Coca Cola–style bottling plant vertical integration -- than in opening up new territories for the Windows OS. Microsoft “has been a late entrant into smartcard software, with De La Rue its most enthusiastic backer”, according to the FMoS. It notes a "strained relationship" between Microsoft and the financial services industry. De La Rue has by contrast "a longstanding relationship with most of the world’s banks". Schlumberger of the US and GemPlus of France account for 75 per cent of the world’s smartcards, sales of which are expected to grow nearly 400 per cent to £4.25 billion by 2002, the FMoS reports. ®