Technology giants Cisco and Microsoft have pledged to co-operate on technology standards in the interests of customers.

The largest maker of internet hardware and the largest software developer are increasingly competing in “unified communications” – systems that combine e-mail and telephony tools.

In their first joint public discussion, John Chambers, the Cisco chief executive, and Steve Ballmer, his opposite number at Microsoft, said they would meet demands from customers who want to pick and choose technology from both companies.

Mr Ballmer said: “[Customers are] saying, ‘Give me the choice. Don’t give me the all or nothing choice'.”

Mr Chambers added: “Even where we’re going to compete, what the customer wants to know is, ‘Tell me how to interoperate. Don’t make me throw away one relationship because of the other.’”

However, analysts said building systems that worked with each other would present a challenge for two companies used to working alone.

Jan Dawson, an analyst for Ovum, the telecoms research group, said: “Cisco and Microsoft hold hands while kicking each other under the table.”

He added: “Hopefully, they will both move a little further in the direction of interoperability, but they will both also continue to do their best to create a world where the other isn’t needed."

The comments came as both companies introduced new products and formed alliances that point to a growing rivalry.

Microsoft and network equipment maker Nortel Networks, a Cisco competitor, announced a broad alliance in unified communications last year. Cisco, meanwhile, has been expanding its association with IBM.

Each company is also seen trying to bolster its unified communications offerings through recent acquisitions.

Microsoft bought Tellme Networks, a privately held speech technology company, in March. The move was announced a day before Cisco said it would buy online video conferencing company WebEx Communications Inc.

Cisco also bought a stake in software maker VMware shortly ahead of its float on the stock market last week.

VMware’s software allows several operating systems to be run on a single server, cutting hardware and maintenance costs. VMware competes with similar tools offered by Microsoft.

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