NEC has signed a ten-year development deal with server developer Stratus. The deal will include cross-licensing and see NEC increase its stake in Stratus with a $9 million investment.

NEC and Stratus have worked together on fault-tolerant server design and sales since 1999 and the new deal will extend that co-operation to high-availability servers.

NEC is developing a new LSI (large scale integrated circuit) chip that will form part of the heart of future fault tolerant computer systems that will be jointly developed by the two companies, said an NEC spokesman. The servers will be built by NEC in Japan and sold by Stratus in the US and by NEC in Japan.

The first machine jointly developed under the deal and equipped with the new LSI is expected in late 2006.

NEC has owned a small stake in Stratus since 1999 and its additional $9 million will increase its overall stake to 5.4 percent. Other shareholders in the company include venture capital firms Investcorp, Intel and Mid Ocean Partners.