The three companies had accused IBM of anti-competitive practices relating to its mainframe business. European regulators did not say whether they would drop their investigations.
Three
companies that had accused IBM of anticompetitive behavior in its mainframe
business are dropping the complaints they had filed with the European Union.
According to a
recent regulatory filing by IBM, two of the companies-T3 Technologies and Neon
Enterprise Software-either have or will withdraw their complaints with European
regulators. Meanwhile, officials with a third company-TurboHercules-said Aug. 3
they were no longer pursuing their complaint against IBM and its mainframe
business.
IBM officials declined
to comment on the issue.
The news comes
more than two months after Neon officials said they had
settled their legal disputes with IBM and were
taking their zPrime product off the market. Neon's software, which enables
users of IBM's System z mainframe systems to shift more workloads onto
specialty processors, was the key point of contention in the dispute between
the two companies, and Neon's decision to take the software off the market was
a significant win for IBM.
Both T3 and
TurboHercules also offered technology designed to make it easier for businesses
to run their mainframe workloads on non-IBM systems.
The complaints
filed by the three companies kicked off at least two EU investigations into
IBM's mainframe business practices.
European regulators were noncommittal about
whether they would continue the investigations in light of the complaints being
dropped. T3 and Neon also had filed complaints with U.S. regulators.
Essentially
all the complaints were the same: They accused IBM of antitrust behavior
regarding its mainframe business, saying the tech giant used its dominant
position to unfairly hurt their companies by tying their System z machines to
its mainframe operating systems. IBM officials argued that the companies'
products violated IBM patents and, if used, would cause mainframe customers to
violate the terms of their licensing deals with IBM. The smaller companies
essentially were trying to make money off the billions of dollars IBM had
invested in the mainframe business, Big Blue officials said.
In addition,
IBM accused competitors-
in particular, Microsoft-of backing the
regulatory complaints for competitive reasons.
Despite the contention
among some industry observers that mainframe systems were being squeezed out
by the rise of more powerful x86 systems, IBM's System z servers continue to be
an important part of IBM's hardware portfolio. In the second quarter, IBM's System z mainframe
revenues rose 61 percent over the same period last year, while MIPS jumped 86
percent.
The products
put forth by T3, Neon and TurboHercules were designed to help businesses
continue to run their mainframe workloads, but for less money. Neon's zPrime
software lets companies move more of their System z applications off the
mainframes' expensive central processors and onto less costly IBM specialty
engines.
Meanwhile, T3
makes non-mainframe systems that can run mainframe applications, while
TurboHercules' emulation software-based on the open-source Hercules
technology-enables businesses to run their mainframe applications on less costly
servers, including mainstream x86 systems.
Neon in 2009 sued IBM, and IBM later
counter-sued. In May, Neon officials announced they had settled their legal
disputes with IBM and shelved zPrime. A U.S. District Court judge earlier had
ruled that only those workloads that IBM allowed could run on the specialty
engines and that System z customers using technology like zPrime were violating
their licenses with IBM.
The IBM
settlement does not impact any other Neon products other than zPrime, Neon
officials said.
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