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Will smart cards finally take off in 2004?

Industry experts ponder what the future holds for smart cards.

In recent years, and particularly after September 11, predictions called for the smart card industry to enjoy a surge in popularity as enterprises rushed to adopt the enhanced physical and network security the cards could offer.

Asia and Europe quickly moved to implement smart cards to address both physical and network security issues, and it's predicted the technology will gain traction in the U.S. in 2004 as some of the obstacles to widespread adoption are removed.

"Plenty of point solutions have been deployed here in the U.S., but we haven't gotten to the point where it's mainstream," says Peter Cattaneo, director of Sun Microsystems' Java Card business. "But it's coming, and I think you'll start to see some acceleration in 2004."

In fact, a new survey conducted by Frost & Sullivan found that smart cards enjoy 100% awareness among U.S Fortune 500 companies, with 63% of executives saying they had or would look into deploying smart cards for network security.

The survey, commissioned by smart card vendor Gemplus, found more than a third plan to begin deploying smart cards within the next three years.

Gartner Research Director Mark Nicolett says it will take time for smart cards to be widely used in the U.S., because unlike other regions, smart card readers aren't everywhere. And since widely accepted standards have only recently been developed, enterprises may have held off on spending until they felt more confident their purchases would stand the test of time.

Smart cards can simplify security and are convenient for users, Nicolett says, but despite growth areas such as health care and mobile networks, "the smart-card market will remain relatively small."

"If you look at the history of smart card deployment, pretty much every major deployment so far has been a custom development," Cattaneo says, citing users like the Department of Defense. "Those organizations can afford to spend millions to have it done their way. We're just starting to see some standardization which will help drive those costs down."

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