Article

IBM countersued by PSI over plug-compatible mainframe

Mark Fontecchio

Platform Solutions Inc., a maker of plug-compatible mainframes, has countersued IT giant IBM for coupling its mainframe hardware with the z/OS to shut out competition.

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PSI filed the motion in U.S. District Court in New York in response to a lawsuit by IBM last month claiming that its patents for z/OS were violated by PSI to suit its own hardware. The Sunnyvale, Calif.-based PSI was formed in 1999 from the remnants of defunct plug-compatible mainframe vendor Amdahl, with backing from Intel Capital and other investors. The machine can run Windows, Linux, Unix and, most importantly to mainframers, z/OS on a single machine.

In its counterclaim, PSI claimed that IBM is trying to corner the market on its z/OS software by refusing to license it to other companies, therefore making it anticompetitive. In its court filing, PSI also claimed that it was on the verge of being acquired by a "major technology company" in October, but that the company backed off after IBM refused to sell its operating system and applications on PSI's hardware. PSI claimed that the move cost it "hundreds of millions of dollars."

Christian Reilly, PSI's vice president of product management, likened IBM's actions to Microsoft selling Windows only on its own hardware.

"Let's say hypothetically that Microsoft built its own PC hardware," Reilly said. "If they only sold the Windows operating system on its own hardware, they would be practicing in a way to control the market."

An IBM representative did not reply to a request for comment, but much of the lawsuit revolves around an agreement between the two companies granting licensed copies of z/OS to PSI. IBM claims that PSI has broken that agreement by "translating" the operating system to run on its Intel Itanium-based mainframe machines, therefore undermining its investment in mainframes.

PSI responds that the way in which it runs z/OS on its own hardware does not violate the agreement with IBM.

Reilly said that the timing of IBM's lawsuit -- just months before PSI plans to sell its mainframes under general availability -- was "curious," though he was quick to add that none of PSI's customers had defected for fear of the consequences the lawsuit could have.

Linda Zider, executive vice president of PSI and a former IBM employee, said that proves that mainframe customers out there want competition.

"In the past, it was pretty typical that Amdahl and Hitachi were pricing 10%-20% below the market," she said. PSI's discounts on its hardware are similar, though neither Zider nor Reilly would be specific. "What we can discount varies depending on how big the box is," Zider said.

Let us know what you think about the story; e-mail: Mark Fontecchio, News Writer.


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