IBM and Google are cuddling up in a bid to set up a cloud computing system. The companies plan to roll out a worldwide network of servers based on Linux-based machines using Xen virtualization and Apache Hadoop.

Google has already set up cloud-based services for consumers, such as e-mail and storage, but Google CEO Eric Schmidt thinks it is the next big thing for the Internet.

IBM reckons that it will be the key to reaching small and midsize companies around the world and providing them with online software services which they can ‘buy on the cloud’. Under its Blue Business Platform, IBM plans to launch an online marketplace offering its own pre-integrated products and services, as well as those from other software developers.

Google and IBM both admit that they are different in the way they see the universe, but insist that they have similar views on technology. X