Neon Software CEO rejects IBM warnings on mainframe licensing issues due to zPrime

Neon Enterprise Software says its zPrime software doesn't violate IBM intellectual property or licensing agreements, which Big Blue warned customers about in a recent letter.

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Lacy Edwards, CEO of mainframe software vendor Neon Enterprise Software, said Tuesday that its zPrime software doesn't violate IBM intellectual property, and end users can save millions a year by using it.

Neon announced a new application called zPrime at the end of June thatwhich purportedly helps users offload work from the mainframe's central processors to specialty engines such as the z Integrated Information Processor (zIIP) and the z Application Assist Processor (zAAP). Neon claims that zPrime can offload more than just DB2 and Java workloads, which is what the zIIP and zAAP are aimed at. One beta customer said they could save $10 million a year using zPrime, mostly on software maintenance fees.

But in a letter to customers dated July 10, IBM warned customers about the potential of zPrime's product to violate licensing agreements with IBM.

"IBM would also caution its customers regarding any claimed ability to reduce IBM Program license charges by off-loading workloads to Specialty Engines beyond the eligible workload identified by IBM," the letter read. "IBM's applicable pricing terms governing Eligible Workloads on zIIPs and zAAPs will not apply to zIIPs and zAAPs running anything other than IBM specified eligible workloads."

Edwards said zPrime does not violate any IBM intellectual property, nor does it violate any licensing agreements with Big Blue. And he added that of all the customers testing zPrime -- there are close to 60 -- none that have run it by their company's legal team have found violations of their licensing agreements with IBM.

"We're not in violation of anyone's rights or any contracts whatsoever," Edwards said. "Our response to customers is that they should review agreements and make sure they're not in violation. Every customer has come back and said there is no violation of any agreements using zPrime."

That said, it is still unclear what steps IBM might take, if any, to stop its customers from using zPrime. Edwards said Neon currently has 58 customers evaluating zPrime, with two scheduled to go into production in the next week.

How did the software come about? Edwards said it began two years ago, when he visited customers and asked them what they needed most. They said a common refrain among mainframers: control costs.

"The cost of mainframe computing is off the charts compared to other platforms," Edwards said. "Some said they were having to move applications off the mainframe that were perfectly suitable for the environment but the cost was too high."

Neon was aware of the mainframe specialty processors and started working on how to save customers money using them. They then developed software that could help users offload work to the specialty processors without using the IBM-provided API for those specialty processors, which let them offload a lot more than just data- or Java-related workloads.

Edwards likened the development to companies that have developed software to compress storage data so fewer storage devices are needed, or virtualization software that allows companies to consolidate servers and presumably reduce their hardware footprint.

"This is what software vendors do," Edwards said. "Our job is to build products that help customers get the job done more cost effectively. There are plenty of examples where companies have done what we've done."

Edwards said he has heard some wonder whether what zPrime does is fair.

"If you look at what mainframe customers have been paying for the last 20 years, is that fair?" he said. "The fees they're getting charged compared to other platforms are exorbitant."

Let us know what you think about the story; email Mark Fontecchio, News Writer. Also, check out our blogs: Data Center Facilities Pro, Mainframe Propeller Head, and Server Farming.

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