Sandisk has announced that they're partnered with Microsoft to develop a replacement for their existing U3 Smart Technology. Expanding upon U3's current capabilities, this new hardware and software based solution will let users store data, applications and their own custom computing environment on a flash storage device.
Microsoft and SanDisk Corporation (NASDAQ:SNDK) today announced they have signed an agreement to deliver a next-generation software and hardware solution to place application programs and personal customization on USB flash drives and flash memory cards, expanding on and replacing SanDisk’s existing U3 Smart Technology.

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.
While U3 has been around for a few years, the technology really hasn't taken off. Hopefully, with Microsoft's help, Sandisk can make this new technology go mainstream. If you'd like to read more, Sandisk's entire press release can be found here.