PeopleSoft President and CEO Craig Conway and IBM Software Group SVP and Group Executive Steve Mills were both very pleased with the move.

"This is the largest and most significant agreement that PeopleSoft and IBM have ever made," said Conway. "Today we have eclipsed the competition by bringing together the most flexible and adaptable applications software with the strongest, most open middleware infrastructure in the world."

"Combining PeopleSoft's industry-leading applications with IBM's superior middleware provides customers with a significant opportunity to integrate business processes throughout their organization, leading them down the path to becoming an on demand business," Mills added. "Customers are seeking innovative solutions that won't lock them into a proprietary platform. Combining industry-leading applications and infrastructure technology provides customers with offerings that can help them solve their business challenges more quickly."

In a joint statement the companies said that the two companies will jointly market and deliver "integrated, cross-functional industry solutions targeted at solving some of the most difficult business process challenges facing companies today."

These solutions will apparently consist of PeopleSoft applications, IBM middleware, third party software, and services from IBM and PeopleSoft to provide customers with a complete solution offering.

The initial industry solutions, the companies said, will focus on banking, financial markets, insurance and telecommunications. Solutions for the telecommunications industry - built on IBM's Service Provider Delivery Environment framework - will include Customer Profitability Management, Network Lifecycle Management, and Customer Loyalty and Retention.

Other new industry solutions will include Distribution Channel Management for Insurance and Integrated Risk Management for Banking and Financial Markets.

PeopleSoft and IBM will also jointly establish the industry's first business process interoperability lab to drive integration and customization. PeopleSoft application developers, IBM, and other leading industry software vendors will test and certify application interoperability in real-world business environments. "The lab will reduce the time and effort required for pre-testing new standards and application integrations from multiple vendors," the companies said in a joint statement. "Customers and partners will be able to more rapidly respond to market dynamics and changing business needs through this open, standards-based platform."