Microsoft and Siebel Systems on Monday announced an alliance that will tie Siebel's customer relationship management (CRM) software to Microsoft's .Net architecture.

The alliance, which was widely expected, includes collaborative development, global marketing and sales and support for corporate customers. Microsoft Chairman Bill Gates will deliver a keynote speech at a Siebel user conference later Monday.

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, integrate and cross-certify Siebel applications with Microsoft's software.

Markup Language (XML) and Web services standards, Siebel's Universal Application Network is designed to allow enterprises to 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 and allow communications 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 through its Great Plains division. 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.