With the acquisition of PhoneFactor by Microsoft last year two-factor authentication for the companies Cloud offerings looked a likely development and it looks as though it maybe closer to release.
The authentication is similar to those used by rivals such as Google and Dropbox, in essence the users device is also authenticated as well as the users account. Some applications will not work seamlessly with this new scheme and passwords will need to be generated on the Microsoft site.
Although no confirmation has been released by Microsoft it is an important step in terms of increased security by them. It seems they have recognized that single password authentication is no longer secure enough or reliable enough for a majority of systems.
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