The software giant said it had formed the Interoperability Customer Executive Council to identify areas for interoperability improvements across its products and the overall software industry.

The council will be hosted by Microsoft’s senior vice president of the server and tools business, Bob Muglia, and will meet twice a year to present the company’s executive and product teams with customer concerns regarding interoperability.

Members of the Council will include chief information and technology officers from Microsoft business and government customers. Founding members include Societe Generale, LexisNexis, Kohl’s Department Stores, Denmark’s Ministry of Finance, Spain’s Generalitat de Catalunya and Centro Nacional de Inteligencia, as well as the states of Wisconsin and Delaware.

Microsoft pitched the creation of the council as the continuation of a commitment to interoperability triggered by chairman Bill Gates’ February 2005 call for the company to use XML web services to enable its software to be interoperable by design.

Interoperability has also become a major stumbling block in the company’s antitrust settlement in the US, as well as a potentially costly battleground in its antitrust dealings with the European Commission.

The EC announced in December 2005 that it intended to fine Microsoft 2m euros ($2.4m) a day for not providing adequate documentation that would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers.

In January the company announced plans to license its Windows source code to developers and competitors in an effort to move beyond European Commission complaints about its documentation, while in March it said it would offer free, unlimited technical support to licensees seeking to implement Windows Server communications protocol.

A decision on Microsoft’s appeal against the fine is not expected until July at the earliest, but the EC is already looking beyond existing interoperability problems. In March European Competition Commissioner Neelie Kroes wrote to the company expressing concerns over the possible failure to disclose all technical information necessary for Vista to interoperate with competing products.

Microsoft’s antitrust dealings in the US have been more straight-forward, although the company was hit with a fresh complaint from Tangent, a small Burlingame, California-based hardware vendor in February that accused the company of withholding information that would enable third party applications from accessing Microsoft Office documents, among other things.

In January the company had been criticized by the Department of Justice for its failure to meet US antitrust remedy technical documentation submission guidelines, although its source code licensing plan was adjudged in February to have alleviated concerns.

While the company’s interoperability practices have been the subject of much controversy, the company has also had some high-profile breakthroughs. In April the company announced that it will provide technical support for Linux running on its Virtual Server 2005 software.

There have also been high-profile interoperability agreements with Hyperion Solutions Corp, Sun Microsystems Inc, and SAP AG, as well as more unlikely deals with open source CRM software vendor SugarCRM Inc, and open source Java middleware software vendor JBoss Inc.

As well as setting up the customer council, the Microsoft is also promising more to come. We are committed to interoperability for the long term, said Muglia. So watch this space.