updated 6/28/2004 5:43:47 PM ET 2004-06-28T21:43:47

U.S. software giant Microsoft Corp. and Japanese electronics maker Fujitsu Ltd. will collaborate to develop servers for the next-generation Windows operating system, the companies said Monday.

Fujitsu has already said it will offer servers that run on earlier versions of Microsoft Windows, as well as the Linux open-source operating systems.

Microsoft chief executive Steve Ballmer and Fujitsu chairman Naoyuki Akikusa said at a joint news conference their alliance set up in 2002 will be strengthened by working together to develop servers for the new version of Windows, known as Longhorn.

The two companies are targeting 800 billion yen ($7.2 billion) in sales from the development of servers with Longhorn, along with other business agreements.

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