One analyst said winning the support of Microsoft's biggest rivals, such as AOL Time Warner, may be a stretch. "I really think that AOL is going to have to be pushed real hard to sign on to this," said Chris Le Tocq, an analyst with Guernsey Research who has followed the development of Passport closely.
AOL has said it is working on its own single sign-on service based on technology used in the authentication system for its AOL Internet service. The company is also a strong opponent of Microsoft and has a history of being slow to open up its systems to competitors, such as its instant messaging services. AOL is currently under order by federal regulators to make its instant messaging systems work with rival services.
In addition to AOL, the open-source community is working on developing a single sign-on authentication system, and Sun Microsystems Inc. has said that it too could build a sign-on service that would compete with Passport.
For its part, Microsoft said opening up Passport through the use of open standards would give rivals and corporate partners control over many aspects of their own authentication systems. In addition, the company said it will consider allowing a neutral third party group, or a federation of companies that includes itself and industry rivals, to oversee Passport.
"What the federation approach does is provide the capability, through Passport, to make a single administration point for internal and external sites," Le Tocq said.
Microsoft would not commit to the idea of allowing a neutral group to oversee Passport, saying it is looking at other options as well. One such option would see competing authentication systems work like a peer-to-peer network, with each system storing its own users' personal information.
But with an independent authority managing the millions of user profiles, Microsoft could encourage customers to adopt Passport and relieve fears that Microsoft might control the personal information stored on central servers or charge for every transaction that passes through its system. The move could also relieve privacy critics' fears that Microsoft would use user information to build customer profiles for marketing purposes.
"We think that there's at least an interesting discussion to have in the industry as to whether or not there is a need to have this higher operating authority," Arbogast said.
Besides opening up an opportunity to enlist more subscribers for the Passport service, the announcement signals that the software maker is giving into legal pressure from its antitrust case, which continues this month in a U.S. District Court, Le Tocq said. The U.S. Department of Justice, which is a plaintiff in the case along with 18 U.S. state attorneys general, has said in court papers that it will ask the judge to consider issues pertaining to Windows XP when crafting a remedy to impose on Microsoft.