Microsoft, SanDisk team on flash drive, card customization

Microsoft and SanDisk said Friday that the two companies have teamed to deliver software and personal customization on USB flash drives and memory cards.

Under the deal, Microsoft's software will replace SanDisk's existing U3 Smart Technology, software that is currently included on SanDisk flash memory gear. U3 smart drives (see reviews) allow customers to carry files, Windows software and their associated settings. When a U3 smart drive is plugged into a Windows PC all settings are carried over with the documents.

The arrangement allows the two camps to specialize on their core strengths. Microsoft does the software and SanDisk will develop the hardware. U3 technology was developed by U3 LLC, a joint venture of SanDisk and m-systems, and became available in 2005. SanDisk acquired m-systems in November 2006, and U3 LLC today is a wholly owned subsidiary of SanDisk. SanDisk said it will support the U3 division and product until the Microsoft offering is launched.

According to a statement by the companies:

Under the terms of the agreement, Microsoft will develop a new software experience and SanDisk will develop new hardware capabilities, including the addition of TrustedFlash security technology. SanDisk will incorporate the combined software and hardware solution on removable flash memory cards and Cruzer USB flash drives. The new offering is expected to be commercially available starting in the second half of 2008.

Microsoft will begin licensing its new software to third parties and a joint venture will license other intellectual property, hardware designs and TrustedFlash.

Essentially, Microsoft is taking over and then replacing SanDisk's U3 platform. The company said the 20,000 U3 developers will be given a migration path to the new Microsoft-powered platform.