A collaborative agreement between Microsoft and National ICT Australia (NICTA) will fund research into advanced web services security.
The main aims of the agreement are to identify gaps in web services security, develop security architectures and management policies and protocols, according to a statement from NICTA.
Research and development is funded for three years, with the $2 million project cost split 50/50 between Microsoft and NICTA.
Steve Vamos, managing director at Microsoft Australia said: "With the emergence of web services as the most significant development in our industry it is important to get the right and best minds so we can secure the environment going forward to benefit business and consumers."
Ownership of any intellectual property which stems from the project vests with NICTA. Microsoft will retain a non-exclusive license.
Professor Vijay Varadharajan is named as project leader, heading up a team of five researchers.