The alliance, which was widely expected, includes collaborative development, global marketing and sales, and support for corporate customers.
The companies said the alliance is an expansion of an existing relationship, but that now Siebel's applications will be designed for .Net. Engineers from the two companies will work together to conduct benchmark tests and to integrate and cross-certify Siebel applications with Microsoft's software.
Siebel will invest US$250 million in development and marketing of .Net as a platform for its customer relationship management (CRM) applications, Siebel Chief Executive Tom Siebel said in a keynote speech at the Siebel user conference Monday in Los Angeles.
Microsoft is also investing in the partnership, but representatives would not comment on the specific amount the company plans to spend.
Some analysts questioned how Siebel would benefit from such a large investment in the partnership.
".Net is not at all advantageous to Siebel," said Joshua Greenbaum, an analyst at Enterprise Applications Consulting. "In my opinion, it's the equivalent of making a press release about the color of the paper you're going to print your checks on. It's not strategic. .Net is not high on anyone's list in corporate America of must-have technologies."
Siebel has high-level platform partnerships with a number of other major IT companies, including Hewlett Packard, IBM, and Sun Microsystems. None of the work Siebel is doing with Microsoft is exclusive of these other alliances, a Siebel representative said.
Based on Extensible Markup Language (XML) and Web services standards, Siebel's Universal Application Network is designed to let enterprises choose the best applications for their needs and integrate them into their existing information technology architecture. BizTalk Server, Microsoft's integration server, is designed to help companies connect computing systems to conduct e-commerce transactions using XML.
As more companies take their businesses to the Web, systems that were never meant to talk to one another, must now be tied together. To this end, Siebel has agreed to use Microsoft Visual Studio .Net as its primary development toolset. For Microsoft, the alliance serves as a showcase for how .Net can work and how it can operate with systems built using rival Java-based technology.
Microsoft is planning its own CRM software. Over the past two years, Microsoft has acquired two business software companies: Great Plains Software and Navision. The two companies, which make accounting and other software, form the core of Microsoft's long-planned move into enterprise applications--complex programs designed to help companies do such things as close books, process orders, manage inventory, and track customers, suppliers and employee.
But as a provider of infrastructure software, such as operating systems and database management software, the software giant is also keen to gain business for its .Net generation of products.
The .Net system includes new releases of the company's Windows operating system and server application software. It also embraces other server software, along with development tools and a framework to link programs to the Internet.
Web services is a new way to build software that has been espoused by leading technology companies for connecting business software over the Internet. Most businesses are either still investigating Web services or are just beginning to use the software to link their internal systems.
The two companies said the alliance positions them to take advantage of the Web services interest with applications that capitalize on the standards-based interoperability of Web services.
Siebel is the biggest player in a multibillion-dollar segment of the CRM applications market. Microsoft is planning to break into that market later this year with the introduction of its own CRM applications, designed to help companies streamline sales, marketing and customer service activities.
News.com's Alorie Gilbert contributed to this report.
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