The two technology giants, which have in the past clashed in the operating system, database and desktop software markets, are collaborating on potential Web standards aimed at simplifying the delivery of each company's future software fine-tuned for the Web.
Microsoft and IBM remain fierce competitors in the race to build Web-based services. Microsoft recently announced its massive Microsoft.Net plan to Web-enable its entire product lineup and move the bulk of its business onto the Web. IBM is hoping to unite its multiple hardware systems through integration software that will make its products more attractive to buyers setting up e-commerce sites and other Web-based services.
But each company needs a common infrastructure to make new services a reality, and Extensible Markup Language (XML) appears to be the consensus choice. IBM and Microsoft executives acknowledge that a common Web standard, developed through a cooperative effort, could improve the chances for each company's product to succeed in the market.
"Microsoft and IBM are still competitors, of course," Paul Maritz, senior vice president of Microsoft's platform group, told CNET News.com. "But our tech people have come to some of the same technology points of view as IBM's people. It's been sort of a meeting of the minds at a very high level."
Bob Sutor, IBM's program director of XML technologies, agrees.
"It's important for us to get together with Microsoft. It's admittedly a big player, and the more we can get good technology agreed upon, the faster the whole area can grow," Sutor said.
"If we get agreement, Microsoft, Sun, Oracle and the industry will say, 'This is something we can trust. This is something that has legs.' That's why it's important we continue to talk to Microsoft."
Analysts see the alliance as a marriage of necessity.
"It's a bit like when the United States cozied up to China during the Cold War to counter the Soviets," said analyst Mike Gilpin of Giga Information Group. It was "not like we were best buddies with the Chinese government. (It was) just power politics."
The new collaboration is ironic given that the companies were once bitter enemies. IBM and Microsoft battled over a well-publicized split in the development of IBM's OS/2 operating system before Microsoft ditched OS/2 efforts to make Windows dominant. The pair continue to compete in e-commerce and database software technology that allows businesses to create e-commerce Web sites.
"It's good news (for the industry) that they'll get together sooner rather than later," Gartner analyst David Smith said.
IBM's budding relationship with Microsoft may also be the result of Big Blue's friction with Sun Microsystems, creator of the Java programming language, analysts said. Over the past few years, IBM has invested millions in adapting Java as a common language for use across its mainframe and PC server systems. In recent months, IBM has indicated it may favor XML to perform that task.
While IBM is a strong supporter of Java, IBM has disagreed with Sun's handling of the Java standard and the company's refusal to hand over control of the technology to an industry standards group.
Now, both Microsoft and IBM are working on their own XML specifications that will be built into future products.
One of the leading communications technologies to make that vision a reality is called Simple Object Access Protocol (SOAP). The technology allows businesses to link different computing systems over the Net, so they can conduct online transactions. It has been submitted to the Internet standards group, the World Wide Web Consortium, as a potential standard.
Microsoft and IBM have recently released or announced several new XML specifications that would work with SOAP. David Turner, Microsoft's XML product manager, said that Web services can be created today with current technology but that new XML specifications will simplify the process.
Any of the XML specifications would have to be submitted and approved by a standards body before they become official standards.
Executives at both companies "are taking a look at each other's specifications and seeing where there's crossover and where things can come together," said a source who requested anonymity.
Both Microsoft and IBM executives declined to be specific about their collaboration, but both sides said it makes sense to have a common set of XML standards.
"There's a common approach in the direction around Web services from a high level. Some of the concepts aren't that far apart," said Marie Wieck, IBM's director of e-markets infrastructure. "We strongly believe open standards are the only way the Internet can work. You need to cooperate on standards and compete on the implementation."
Executives on both sides also warn that the newfound cooperation could dissolve. Microsoft's Turner said it's too soon to know what will result from the latest round of collaboration. "We may have started discussions, but there are no guarantees. Things could fall through for any number of reasons."