Among the many reactions to Microsoft Corp.'s entry this week into the smart card market, the one from the London-based research firm Ovum Ltd. stood out.

Except for Sun Microsystems Inc. and its allies, who would be expected to be critical because they buy into the Java programming language and a philosophy very different from Microsoft's, many reviews were positive, and Ovum's was remarkably so.

Though Ovum offered a balanced assessment, raising questions about the state of Microsoft's relationships with banks and its tendency to be late with product deliveries, the research group concluded that the extension of the Windows operating system to smart cards "has an exceptional chance to become the de facto standard ... for network (including Internet) access applications."

Ovum has been in the thick of the smart card operating system debate. A report earlier this year questioned the readiness of the Java Card API, or applications programming interface. The conclusion did not go over well with Sun Microsystems, the technology companies that have joined its Java Card Forum, or Visa International, which based its Open Platform specification on Java.

Ovum tilted in favor of Multos, the choice of MasterCard International and its Mondex International venture, which have been joined by American Express Co. and several technology vendors in Maosco Ltd., the consortium overseeing Multos and its enhancements.

After briefings by Microsoft over the last two weeks, Ovum officials said they concluded this is not simply a "two-horse race becoming a three- horse race."

Duncan Brown, senior consultant of Ovum Inc., the company's North American unit in Burlington, Mass., was given a prominent place in Microsoft's press release about Smart Cards for Windows on Tuesday, when the strategy was unveiled at the Cartes '98 exposition in Paris.

Mr. Brown was quoted on one aspect of what has quickly become known as Windows Card: the ability to write software using Visual C++ and Visual Basic tools that are at the fingertips of Windows developers everywhere.

"The release of development tools to accompany Smart Cards for Windows makes it easier for card issuers to design, create, and deploy smart card solutions," said Mr. Brown.

William Randle, executive vice president of Huntington Bancshares of Columbus, Ohio, endorsed the same point: "We can take advantage of our existing developer expertise to customize the operating system and quickly develop applications for our cards."

Also pluses, according to an Ovum assessment distributed via e-mail, are Microsoft's extensive network of independent software vendors, the tight integration of Windows Card with other architectures such as Windows NT (just renamed Windows 2000) and Internet Explorer, and the Redmond, Wash., company's willingness to "throw money and time at perfecting Windows Card."

Sticking to its guns on Java Card, Ovum called it a "vague specification (that) does not guarantee interoperability-the problem it was designed to solve."

"Multos is the more mature technology" and addresses interoperability, Ovum said. But it suffers from lack of acceptance outside the MasterCard- Mondex circle and its reliance on a "low-level programming language" of its own creation, Multos Executable Language, or MEL.

Ovum pointed to the irony that Multos had been touted as a Windows equivalent for smart cards.

Patrice Peyret of Sun Microsystems said Microsoft is presumptuous to expect that a common interface will be adopted across all platforms and devices from telephones to set-top television boxes to chip cards.

Nick Habgood, chief executive officer of London-based Maosco, said programs on different technical platforms can still be interoperable. He said multiple "open standards" for smart cards can coexist, and he wondered if "something wholly controlled by Microsoft can be an open standard."

Banks should be more comfortable with the fact that "Multos is industry- controlled," he added.

Two of the leading smart card systems providers, Gemplus and Schlumberger, were billed as "partners" in Microsoft's Paris announcement. With their fingers in multiple technology pies, they spoke favorably of Windows Card.

But Gemplus also had an aggressive Java Card initiative up its sleeve. (See article below.) Gemplus "cannot afford to choose any one exclusive partner," said executive vice president Jacques Seneca.

Microsoft's initial application area seems to be security and authentication, which can be deployed within companies as a prelude to entering the wider electronic cash or commerce markets. Senior vice president Craig Mundie referred to "secure access to on-line resources as part of an end-to-end solution" leading to "value-added opportunities for our vendors" and eventually "expanding the smart card market on an international basis."

"Microsoft has an uncanny ability to know when a market is ready," said Ben Miller, the veteran industry observer who runs the Cardtech/Securtech conferences. It is responding to "pent-up demand from corporations for security in networks." The electronic purse and other applications that Windows Card can handle would be longer-term prospects.

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