The agreement calls for J.D. Edwards, which makes software for enterprise resource planning, to integrate its products with IBM's middleware products, including its WebSphere portal, security and application server products, and DB2 database management software.
Financial details of the deal were not released. J.D. Edwards and IBM are selling combinations of the software products now. The fully integrated versions are expected to be available starting later this year.
"One of the key decisions that drove us to IBM was their commitment to open standards and their leadership position on open standards," said Lenley Hensarling, vice president of product management for tools and technologies at J.D. Edwards. "And Web services is a key driver in this decision as well. This will make it easier for customers to coordinate with components of our software as well as (other software) throughout their organization."
The middleware market is growing, and IBM has been facing off against competitors including Microsoft, BEA Systems and Sun Microsystems.
IBM does not sell its own business applications. Instead, the company forges partnerships to drive sales of its software and hardware. While the company has deals with other business software makers, the arrangement with J.D. Edwards is ?greater than with any other application software company that we have done work with," said Steve Mills, senior vice president of IBM's software group.
J.D. Edwards customers will still be able to use the software with applications from companies such as Microsoft and Oracle, but will have to buy those products on top of the IBM package.
But the integrated package will be cheaper, J.D. Edwards CEO Robert M. Dutkowsky said.
"The costs to the customers will be lower than if they were buying piece parts, and the integration costs to the customer will be lower than if they were buying piece parts," he said.
Hensarling said he did not think that the exclusive deal with IBM would limit the software's appeal in any way. "One of the things that we looked at here...is that IBM is a multi-platform software vendor supporting Unix, Intel and IBM platforms. So we look at this as not limiting in terms of platforms that we can target.?News.com's Mike Ricciuti contributed to this report.