Gemplus, the leading manufacturer of smart cards for banking, telecommunications, and other types of transactions, has formed an alliance with a company that has established an entirely different context for the technology.

The ally, Security Dynamics Technologies Inc. of Bedford, Mass., has long offered its own brand of "smart card"-a metal device with a liquid crystal display that randomly generates a new password a minute for high- security operations like wire transfers.

The security token, SecurID, has helped establish Security Dynamics as the world leader in what it calls two-factor authentication, with 1.5 million users in 1,600 companies. By combining a computer operator's secret code with the random number, SecurID gets around one of the biggest security hazards in on-line networks-the reusable password, which is especially vulnerable to hacker attacks.

Security Dynamics also gained the preeminent position in the data encryption market through its July 1996 acquisition of RSA Data Security Inc., Redwood City, Calif.

With Gemplus, based in Gemenos, France, Security Dynamics said it intends to add plastic cards with embedded chips to its SecurID line. The portability and flexibility of chip cards fit in with Security Dynamics' "enterprise security services framework," which will allow companies to extend their internal controls to methods of remote access and Internet activity.

"The market demand for secure access to the Internet, intranets, and physical resources is accelerating," said Thomas Hissam, business development director for Gemplus' multimedia division. The companies expect to find numerous opportunities to combine their respective smart card and network authentication expertise, he said.

They said a first-generation card will be integrated in Security Dynamics' Ace/Server system, providing two-factor authentication through a smart card reader. Later, combined with RSA technology, the smart cards could store private keys, digital certificates, user privileges, and other security information.

Other product and partnership announcements will follow this year in the enterprise security area, said Dave Powers, Security Dynamics' vice president of marketing and corporate development.

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