TOKYO -- Microsoft Corp. and Fujitsu Ltd. are expanding an existing global systems integration alliance to work together on software and hardware for mission-critical systems, the two companies announced Monday.
Under the alliance, the companies will collaborate on the development of Fujitsu servers based on Intel Corp.'s Itanium processors and Microsoft's Windows Server 2003 and next-generation operating system code-named Longhorn and work on improving interoperability between their respective software applications. Fujitsu will also place engineers in Microsoft's Redmond, Washington, campus and integrate .Net into its Triole software suite.
"We are taking our global alliance to the next frontier, beyond enterprise computing and into mission-critical computing," said Steve Ballmer, chief executive officer of Microsoft, speaking at a news conference in Tokyo. "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 ($7.2 billion) by 2007 from sales of enterprise servers, software products and services as a result of the alliance, it said. Their existing alliance has already reported revenues of $2.2 billion in fiscal year 2002 and $2.3 billion in 2003, according to Fujitsu, and counts Japan's TKC Corp. and the Department of Licensing in the U.S. state of Washington as major customer wins.
"I think Microsoft and Fujitsu have a real chance to go after the systems that run on IBM (Corp.), 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."
Announcement of the deal comes less than a month after Fujitsu committed to work more closely with Sun Microsystems Inc. through 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.
Shipments in Japan of servers running Windows are expected to grow from 335,000 units last year to 389,000 units in 2007, according to figures from market research company IDC Japan. Over the same period shipments of machines based on the freely-available Linux operating system are expected to more than double from 35,000 units to 81,000 units.
IDC predicts the Japanese server market will see total shipments of 518,000 units in 2007 of which around 75 percent will be Windows machines. On a factory revenue base, the domestic market will be worth ¥671 billion in 2007 of which around one-third will be accounted for by Windows systems, said IDC.