EDS and Sun unite to fight IBM

EDS and Sun Microsystems have reached an agreement that will see the two companies sell each other's goods and services.

The venture, which will be officially announced later today, is hoped by EDS and Sun to raise around $3bn over the next five years from providing a complete package of hardware, software and services to companies looking to run websites and datacentres.

The $3bn sum is based on the extrapolated value of contracts lost by both companies to the other - with customers having in the past left EDS in favour of Sun or vice versa.

By combining their respective strengths the companies believe they can make inroads into the market share of IBM, which has long-provided products and services and Compaq which is beginning to increase its own services offering.