Hitachi, IBM may forge development alliance

Hitachi and IBM are set to begin negotiations on a strategic alliance that would see the two competitors collaborate in the areas of development, manufacturing and purchasing power, company officials said in a statement Tuesday.

The pair have signed a memorandum of understanding to negotiate the strategic relationship. The alliance could link Hitachi and IBM for development, manufacturing, OEM (original equipment manufacturer) purchases of future information technology systems and a supplier relationship for key components, company officials said in the statement.

If an alliance does blossom, company officials said in the statement that it would improve efficiencies in manufacturing and development and result in both firms being able to more quickly bring products to market.

Rod Thorn, IBM's director of communications for the company's enterprise system group, said no other information on the potential alliance was being released while negotiations are ongoing.

However, in the Tuesday edition of Japanese business publication Nihon Keizai Shimbun, it was reported that the two companies had agreed to develop a CPU (central processing unit) for a new mainframe that Hitachi will release in the second quarter of 2001. IBM and Hitachi are rival players in the mainframe market.

The same report also indicated that Hitachi would supply IBM with encryption technology and other network-related software. In exchange, IBM would supply the Japanese firm with hardware, the report said.

Company officials hope to provide more details on the potential alliance by the end of 2000, said Gerard Corbett, general manager of Hitachi North America Ltd.

IBM's Thorn and Hitachi's Corbett both said they could not confirm any specifics of the alliance as reported in the Japanese publication.

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