Microsoft, VeriSign team on e-commerce security

The software trio is aiming to make the new technology, called the XML (Extensible Markup Language) key management specification (XKMS), a standard. The technology is intended to help programmers easily add digital signatures and data encryption to their e-commerce applications. Security software like digital signatures, online authentication and data encryption help secure contracts and transactions carried out on popular online marketplaces and other e-commerce sites.

The companies said XKMS is available Wednesday and they intend to submit it to the appropriate Web standards bodies for consideration as an open Internet standard.

Companies like security software makers VeriSign, based in Mountain View, Calif., and rival Entrust Technologies have already laid the groundwork in the growing area of digital signatures, which look nothing like the traditional handwritten version. Digital signatures rely on encrypted algorithms that must be used with a password, meaning people do not actually have to sign their name on the dotted line to make a contract or transaction legitimate and official.

Online security is becoming increasingly important to companies that intend to build their business over the Internet, especially with the sudden boom of online marketplaces.

Both Fairfax, Va.-based WebMethods, which assists companies in setting up business-to-business online marketplaces, and Microsoft, based in Redmond, Wash., have been active in the growing industry.

With the rising popularity of these marketplaces, most of which are still in the development stage, providing official authorization through some type of digital signature will probably become more important as the volume of transactions from companies online continues to increase.

"A new standard for the XML-based trust services architecture will enable trust through stronger authentication and will ultimately help deliver XML's promise of expanded e-commerce across the board," Jeremy Epstein, principal security architect at WebMethods, said in a statement.

With the XKMS specification, software developers will be able to combine some of these newer technologies, like digital signatures, into their Web-based applications, the companies said.

Meta Group analyst David Thompson said that for the most part, companies have put online security on the back burner, choosing first to iron out other concerns such as gaining marketplace participants and determining which sites to join.

"Security is generally ignored; it's an afterthought to most companies," Thompson said. "We're seeing the same (attitude) in the online marketplace environment. Security is important, but companies (tend to) move forward without the best solution in place."

But as security software in general continues to mature--especially with the growing importance digital signatures and authentication will have on online trading exchanges--companies are quickly realizing online security is essential, he added.

Analysts say that by having a standard such as XKMS in place, companies will have the potential to speed the process of finalizing an online contract or completing a transaction by being able to accept a legitimate signature electronically, as opposed to sending a fax with a handwritten one.

"There's been a growing acceptance of" digital signatures, said Kimberly Knickle, an analyst at AMR Research. "With a digital signature attached to a specific transaction, (companies) will know that the transaction came from the right person and that it's authorized."

With so many transactions expected to be conducted online, digital signatures can effectively make the process easier and faster, Knickle added.

Knickle also said the technology's XML-based framework is a plus, having the potential to more easily link companies' disparate applications. XML is a Web standard that has quickly become the language for e-business, allowing businesses to exchange data.

Integration issues are a major challenge among all companies that intend to participate in online marketplaces, she said, and it is no different when it comes to security tools.