As part of the alliance ICL, with support from Microsoft, plans to open seven new centres around the world and train more than 4,000 staff to deliver the services.
The two companies will develop a new breed of "consumer focused" IT systems, based on Microsoft's Windows NT operating system, which will be targeted at four key market areas: retail, government, education and major companies.
Examples of new projects include online shopping, putting schools on the internet, distance learning and installing kiosk systems that provide access to government information.
Keith Todd, ICL's chief executive, said the company was already using Microsoft software to offer similar products. The company is introducing new electronic point-of-sale software for Marks & Spencer, while it is also bidding with Microsoft and Andersen Consulting, the outsourcing group, to install a new benefit payments system for the Department of Social Security.
Financial details of the deal were not disclosed, though Steve Ballmer, Microsoft's executive vice-president in charge of sales and support, said the US group was investing "tens of millions of dollars" in the project.
Most of that funding will go towards retraining staff to use Microsoft software, which ICL said would be the largest commercial IT training programme in Europe. Keith Todd, ICL's chief executive, said the company would take on 1,000 new staff across Europe, about half of which were expected to be in the UK.
He added that some staff would be skilled software engineers. However, he said the company would also be hiring unskilled workers, and planned to find at least 50 people through the government's welfare to work scheme.
Three of the seven new centres will be located in the UK, in Bracknell, Manchester and Belfast. Others will be opened in Stockholm in Sweden, Katowice in Poland, and Redmond and Wake Forest in the US.
Mr Todd said that using the Microsoft platform would allow ICL to offer flexibility and value for money to its customer base. He said the company would continue to support other operating systems, but that all new products would be based on Windows NT. In the past, ICL has offered products based on the Unix system, among others.
Analysts said the move was a boost for ICL's plans to float on the London Stock Exchange in the year 2000. However, they suggested the costs of retraining staff would initially depress ICL's profits.
Last year, the group made its first profit in years, reporting a pounds 32.5m operating profit on revenues of pounds 2.48bn.
Mr Todd said it was hard to determine whether the promised extra pounds 500m of revenues would not simply replace projects that ICL would have won anyway. However, he said he expected the company to continue to grow "ahead of the market rate."Reuse content