Microsoft and flash memory maker SanDisk are making a new generation of USB drives and memory cards that let users carry a personalised desktop and applications to any Windows PC.

The joint effort will devise a replacement for SanDisk's U3 Smart Technology, the existing platform for securing USB and memory card data, running applications directly from a flash drive and customising public computers with a user's own settings. Microsoft will be responsible for the software side of the new, as-yet-unnamed platform, while SanDisk will handle the hardware.

The two companies have said they hope to launch by the second half of 2008.

"Think of this as taking U3 to the next level," said SanDisk spokesman Mike Langberg. "Microsoft's involvement is important because it will bring better integration with the operating system; it's a name other hardware manufacturers know and it's not a competitor. For software developers, they will create a development environment that makes it easy to create [flash-able] apps or make existing ones flash-drive compatible."

Emphasis will be put on boosting the personal environment concept, where flash drives or memory cards store a customised interface or launch pad, user-selected applications and data. Users will be able to carry this ‘computer-on-a-stick’ to any public or shared Windows XP or Vista machine, plug it in, and begin working with familiar tools and personalised settings. When the drive or card is removed, there is no trace of the user's work left on the PC.

"Your whole computing environment will be on this drive and go with you," said Langberg.

The data will be encrypted, and the drive or card contents protected from malware by integrated security software through the TrustedFlash technology, the companies said in a joint statement. TrustedFlash, another SanDisk invention, secures content stored on the drive or card. "The new platform will allow applications that weren't possible with U3: E-commerce or personal finance or corporate applications storing data securely, or premium content, like movies, downloaded to the drive," said Langberg. "You'll be able to walk into an internet cafe and play the movie on any machine, without the rights holder getting nervous."

Current U3 applications - SanDisk claims there 20,000 developers working with the platform - will be provided with a migration path, said Microsoft and SanDisk.

Open-source applications such as Mozilla's Firefox and's same-named business suite are among those that can now be launched from a U3 drive. Microsoft software, however, hasn't made the transition. Among the possibilities that have been bandied around in the past: portable settings that would temporarily customise Office applications on the plugged-in PC.

Microsoft and SanDisk hinted that that might be in the cards. "The new offering will be designed so that users can carry their personal computing environment - including a customised and familiar user interface, applications and data - on a flash storage device," said the two companies. Microsoft, however, declined to disclose any additional details or confirm that it's considering making Office applications suitable for flash drives.

The pair will set up a joint venture to license hardware designs, TrustedFlash and other intellectual property, and will share revenues.