According to Irving Wladawsky-Berger, Big Blue’s vice-president of strategy and technology, IBM is moving its grid computing technology, which combines the computing power of hundreds of computer systems, into the realm of business applications. Until now, that technology has been used in the scientific community because it provides supercomputing performance by harnessing together many less expensive computer systems.

IBM’s goal is to use grid computing and software, such as the free Linux operating system and its Websphere business application server, to provide a range of web services in a similar way to that of Microsoft’s dot.net strategy. It is releasing a set of standards and technologies that will combine grid computing with the internet standards used for web services.

Using grid computing, companies will be able to establish “virtual organizations” in which business applications can be shared within a company and also with its network of suppliers and customers. This is similar to Microsoft’s dot.net approach.

IBM would derive revenues from the sale of hardware and software as well as service opportunities to help companies establish their own computing grids.

The battle between Microsoft, IBM, Sun Microsystems, Oracle and others that are targeting the emerging web services field will be determined by the development tools. Microsoft recently debuted its dot.net tools. This is a battle for the software developers, since the tools they use will largely determine which type of web services technologies will lead the market.