IBM Mainframe Business Under Fire in Europe

 
 
By Jeffrey Burt  |  Posted 2010-03-23
 
 
 

IBM is facing another antitrust complaint around its mainframe business, this one in Europe.

Officials with TurboHercules SAS, which offers an open-source mainframe emulator that lets businesses run mainframe applications on less expensive non-mainframe systems, said March 23 that they've filed the complaint with the European Commission, the European Union's antitrust arm.

The complaint alleges that IBM is unfairly tying its mainframe operating system, the z/OS, to its System z mainframe systems.

"This conduct prevents TurboHercules from providing its product to mainframe customers desiring an open-source solution," Roger Bowler, the original developer of the Hercules open-source project and chairman of TurboHercules.

Hercules is a 10-year-old technology maintained by a volunteer community, according to TurboHercules. There are between 5,000 and 10,000 users. Bowler said the company had contacted IBM asking that Big Blue license its mainframe OS to customers for use with Hercules. IBM denied the request, and claimed that Hercules violates IBM intellectual property, he said.

"We then realized that our only hope as a small company was to file a complaint with the European Commission," Bowler said.

IBM's mainframe business has been the target of lawsuits and regulators over the past year or so. More recently, Neon Systems filed a lawsuit claiming that IBM was illegally using its market dominance to hurt sales of Neon's zPrime software, which is designed to let businesses move more of their System z applications off the expensive central processor and onto less costly specialty processors.

IBM has since countersued Neon.

IBM's response to TurboHercules was similar to that to Neon: that the company is looking to build its business atop of the intellectual property that IBM was spent billions of dollars to create.

"TurboHercules is an -emulation' company that seeks a free ride on IBM's massive investments in the mainframe by marketing systems that attempt to mimic the functionality of IBM mainframes," IBM officials said in a statement. "This is not really any different from those who seek to market cheap knock-offs of brand-name clothing or apparel."

IBM also is also accusing Microsoft and other competitors of using such lawsuits filed by smaller companies to back their 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. "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."

IBM over the past decade has grown its mainframe business during a time when most industry observers expected it would die off in the face of growing competition from smaller, less expensive systems. IBM, through varied offerings, better pricing and specialty processors designed to let the massive systems run more modern workloads like Linux and Java, has kept the mainframe relevant.

Over the years, businesses have looked for ways to help mainframe customers cut their computing costs, including companies like Platform Solutions and T3 Technologies, which made non-IBM systems that could run mainframe applications.

IBM bought Platform, and T3 in the fall had its lawsuit against IBM thrown out of court.

However, other vendors, including Neon and TurboHercules, are pursuing antitrust claims against IBM, and the Department of Justice reportedly is looking into IBM's business practices around its System z business.

In addition, an Indian research group, the Indian Council for Research on International Economic Relations, said in a report that IBM's mainframe business practices are hurting competition in that country. IBM fired back, noting that OpenMainframe.org, which sponsored the study, "is bought and paid for" by Microsoft, and that the report had no credibility.

Officials with the CCIA (Computer and Communications Industry Association), long-critics of the business practices of major tech players like IBM and chip maker Intel, said the documents in the TurboHercules case and other complaints illustrate IBM's antitrust actions.

"IBM is preventing customers from moving mainframe applications-applications that the customers own and many times even programmed themselves-to the computer platform of their choice," CCIA President & CEO Ed Black said in a statement. "Without emulators such as Hercules, these applications would remain locked-in to mainframe."

Black argued that if IBM's mainframe business were opened up to legitimate competition, users would save billions of dollars.

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