The IBM-led resolution – dubbed the Open Cloud Manifesto – calls for making cloud computing products compatible with each other to boost their appeal to businesses. Companies are generally reluctant to adopt proprietary new technologies where they feel locked into one provider out of concern they won’t have the option to switch to another vendor if things go sour or better options arise. “It’s not that everything is going to be perfectly compatible, but it is going to be somewhat similar so that you can move from one vendor to another. It gives businesses the comfort level they need to buy,” said Stephen O’Grady, an analyst with technology research firm RedMonk.

The tech industry is under pressure to encourage businesses to adopt cloud computing technologies, which could help them save money by outsourcing part of their IT operations to mega-data centers that can achieve huge economies of scale. Besides issues of compatibility, companies worry about the security implications of storing information at remote computer centers and moving it across the Internet. Tech researcher Gartner Inc estimates that the market for cloud-based business software, computing services and storage from companies including Salesforce.com Inc, Amazon.com Inc, Microsoft and IBM will total about $10 billion this year. That’s just a fraction of the $223 billion that Gartner is projecting for the business software market alone. IBM sees the manifesto as a first step toward establishing specific standards so customers can confidently switch between cloud-computing providers, said Irving Wladawski-Berger, chairman emeritus of the IBM Academy of Technology. O’Grady of RedMonk expects that some of the standards would focus on security areas such as data protection and identity verification, alleviating some of the biggest concerns. Backers of the manifesto include AT&T Corp, Cisco Systems Inc, EMC Corp, Novell Inc, Red Hat Inc, Sun Microsystems Inc and VMware Inc. A spokeswoman for Amazon said her company was reviewing the document.

A Google spokesman said his company decided not to support the manifesto, but did not give a reason. A spokesman for Salesforce.com could not be reached for comment. But Microsoft vocally criticized IBM’s role in drafting the manifesto, saying Microsoft was only asked to sign on at the last minute. “It appears to us that one company or just a few companies would prefer to control the evolution of cloud computing, as opposed to reaching a consensus across key stakeholders (including cloud users) through an ‘open’ process,” Microsoft executive Steven Martin said in a blog posting. Wladawski-Berger at IBM said his company was one of the key leaders of the project, but that other organizers included Google. He added that he was surprised Google decided not to sign the document. He said that he believed Microsoft and IBM would eventually work out their differences over the emerging standards. “I’ve been around for a long time. There are always food fights at the beginning,” he said. “This will get worked out.”

The job cuts will account for over 4 per cent of IBM’s US workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorised to speak publicly on the issue, said the cuts will mostly be in IBM’s global services business, which includes outsourcing and consulting services.

An International Business Machines Corp spokesman declined to comment. The company, which had a total workforce of 398,455 as of end 2008, has not disclosed how many jobs it has cut so far this year, but has said it was making “structural changes” to reduce spending and improve productivity.

IBM, which now earns around two-thirds of its revenue from outside the United States, has been expanding its workforce in emerging markets like India and China.

At the end of 2008, employment in the BRIC countries – Brazil, Russia, India and China — totaled around 113,000.

IBM has been hit by slower US technology spending, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.

A month ago, IBM affirmed its full-year forecast of $9.20 earnings per share, and said contract signings for its business services had grown so far this year.

IBM is in exclusive talks to buy Sun Microsystems Inc, according to sources familiar with the matter, a move that would create a clear leader in the high-end computer server market.

According to The Australian, the decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres.

IBM GS staff was told the scratching of the vendor’s software support would represent about 50 per cent of its one billion dollar, six-year deal with Telstra, signed in early 2006.

Telstra’s decision to drop IBM was a big surprise to IBM GS staff, who expected the contract to continue until 2012.

The deal was lost not because of performance issues but because Infosys low-balled the IBM offer, sources said.

Telstra has been reviewing its IT outsourcing contracts with Satyam, EDS, IBM GS and Infosys since last year, when the telco announced it would trim its list of major IT suppliers from four to two in an effort to reduce costs and streamline its providers.

IBM is likely to pay at least $6.5 billion in cash to acquire Sun, sources told the paper.

That would translate into a premium of about 100 per cent over Sun’s closing price on Tuesday of $4.97 a share on the Nasdaq, the paper said.

In recent months, Sun has approached a number of large tech companies in the hopes of being acquired, the paper said. Hewlett-Packard Co declined the offer, the paper said.

Sun is a maker of software and high-end computers. A spokesman for IBM declined to comment to the paper on questions about any talks with Sun. IBM and Sun could not be immediately be reached for comment.