NEW YORK IBM and Dell Computer Corporation on Thursday announced a strategic technology pact estimated to be worth $16 billion. Under the seven-year deal, believed to be the largest agreement of its kind in the information technology industry, Dell will purchase storage, microelectronics, networking, and display technology from IBM for integration into Dell computer systems. The agreement also calls for broad patent cross-licensing between the two companies and collaboration on the development of future product technology, the two firms said in a statement.

Initially, Dell will have access to IBM's high capacity disk drives, network adapter cards, flat panel displays, high performance static random access memory (SRAM) and custom chips. IBM's personal computer business has suffered over the last several years from a fall in prices and the appearance on the market of more flexible competitors, such as Dell. IBM last October created a new organization, the IBM Technology Group, to investigate new growth opportunities and to boost its presence in the market for original equipment.

IBM is already a major supplier of hard discs, memory chips and liquid crystal screens. Dell, Gateway and Compaq all use IBM hard discs in their portable computers. While Dell is the industry leader in direct sales of personal computers, its share of the market for larger, more powerful machines, known as servers, stands at only 5.6 percent, according to the research firm Dataquest. IBM, with 30.5 percent of the market, is the number one provider of servers.

(AFP)