Microsoft and Fujitsu have expanded an existing relationship to work together on fusing Fujitsu's new Itanium servers with Microsoft's upcoming Longhorn Windows. The collaboration will also see Microsoft's .Net software tied in with Fujitsu's Triole infrastructure.

The two companies will create a joint engineering team that will "enable customers to implement flexible, trustworthy enterprise infrastructure and applications that support business objectives and processes in a highly efficient and effective way," according to a press statement.

"We are taking our global alliance to the next frontier, beyond enterprise computing and into mission-critical computing," said Microsoft head Steve Ballmer. "This has been a core business for Fujitsu for many years and is an emerging part of Microsoft's business." The first system developed as a result of the new alliance will be an Itanium-based server available in the first half of the next calendar year, said Fujitsu.

"This announcement is going to play a very important milestone in our strategy," said Naoyuki Akikusa, chairman of Fujitsu. "Intel is developing next-generation mission-critical servers and Microsoft is looking at Windows Server 2003 and the anticipated Longhorn operating system, and with those systems we hope to provide templates for mission-critical platforms for our customers. This is the third alliance with Microsoft and they have all been successful," he said. Fujitsu hopes to see worldwide revenue of ¥800 billion (£4.5 billion) by 2007 from sales of enterprise servers, software products and services as a result of the alliance, it said.

"I think Microsoft and Fujitsu have a real chance to go after the systems that run on IBM, and put those on the next-generation Fujitsu hardware and Microsoft's Windows," Ballmer said. "Our companies really have an opportunity to help customers as they look to move off of current IBM infrastructure."

The deal comes less than a month after Fujitsu committed to work more closely with Sun by merging their Sparc processor-based server product lines by 2006. The Sparc-based machines compete with Windows servers. Asked for a forecast of future sales of Windows and Sparc-based servers, Akikusa said he expects Fujitsu will be selling "similar" levels of each platform in 2007.