Microsoft reportedly is investing in TurboHercules SAS, whose software enables enterprises to run mainframe applications on non-mainframe systems. The investment in TurboHercules marks the latest move by Microsoft to weaken IBM's dominance of the mainframe space.
According to several reports, Microsoft has invested an undisclosed amount in TurboHercules, which is one of several companies in a legal dispute with IBM over System z licensing issues.
TurboHercules makes emulation software based on the open-source Hercules technology that enables businesses to run their mainframe applications on less-costly servers, including mainstream x86 systems that run Microsoft Windows as well as Linux. The company in March filed a complaint with the European Commission-the antitrust arm of the European Union-accusing IBM of tying its z/OS mainframe operating system to its big iron machines.
Other vendors, including Neon Systems and T3, whose technologies also are designed to help mainframe users reduce their costs, also have taken issue with IBM System z business. T3, which makes non-mainframe systems that can run mainframe applications, also has filed a complaint with the EC after having its lawsuit against IBM in the United States thrown out of court last year.
Neon, whose zPrime software is designed to let businesses move more of their System z applications off the mainframe's expensive central processor and onto less costly IBM specialty engines, has sued IBM. Big Blue has in turned countersued Neon.
IBM spokesman have said that vendors like Neon and TurboHercules are doing nothing more than trying make money off of the billions of dollars IBM has spent investing in the mainframe architecture over the years. IBM has said it determined to protect those investments.
When TurboHercules filed its complaint with the EC, IBM also took the opportunity to single out Microsoft as being behind the efforts of TurboHercules and others in an effort to further its own agenda.
"TurboHercules is a member of organizations founded and funded by IBM competitors such as Microsoft to attack the mainframe," the IBM statement said at the time. "Such an anti-trust accusation is not being driven by the interests of consumers and mainframe customers-who benefit from intellectual property laws and the innovation that they foster-but rather by entities that seek to use governmental intervention to advance their own commercial interests."
Microsoft also is an investor in T3, and a member of the CCIA, an industry trade group that has been an outspoken critic of such major vendors as IBM and Intel for what the group says are anticompetitive business practices. The CCIA has pushed U.S. regulators to look into IBM's mainframe business, efforts that reportedly led to the Department of Justice to investigate for antitrust issues.
Microsoft has issued statements saying that investments in companies such as TurboHercules and T3 come from a desire to see greater openness in the mainframe space and more interoperability between mainframes and other server platforms.
IBM also is getting heat from regulators overseas. The EC in July said it was opening two investigations into Big Blues System z business, one stemming from the complaints filed by TurboHercules and T3, and the other that the commission open on its own.
European regulators want to determine if IBM is illegally tying its OS to its hardware, and whether it is hindering competition by delaying access to spare parts that are available only from IBM.
IBM has pushed to grow and modernize its mainframe business, most recently rolling out its zEnterprise platform in July that essentially enables the Big Iron system to be the central management point for all enterprise data centers and letting other systems leverage the mainframe's attributes. IBM officials claim that by enabling enterprises to manage workloads across multiple systems through the zEnterprise, businesses can reduce data center labor costs by as much as 70 percent.
IBM's efforts are working. According to market research firms Gartner and IDC, in the third quarter IBM saw revenue growth in its System z business. IDC gave much of the credit to the zEnterprise launch, and noted that third-quarter revenue for IBM's z/OS server business jumped 14.8 percent over the same period last year, growing to $1 billion.