Article

IBM fights mainframe monopoly claims in antitrust investigation

Mark Fontecchio

The Justice Department is investigating complaints that IBM's mainframe business constitutes a monopoly, but some end users and analysts consider them largely baseless.

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The federal government's query stems from complaints from current and former rivals of IBM, who have claimed in civil lawsuits that IBM is monopolizing the mainframe market by not licensing its z/OS operating environment on non-IBM hardware. In large part, IBM has countered by saying that the mainframe is just another computer server, and that it has a right to license z/OS, which is its intellectual property.

"Ultimately, the biggest question on the table is whether other vendors should have a right to deploy z/OS on other platforms," analyst Joe Clabby wrote in a recent report. "If allowed to do so, competing vendors could undermine IBM's mainframe pricing structure by delivering lower cost alternatives to mainframe hardware. And, to [me], that would be unfair."

Even end users that are migrating off the platform think the claims are weak.

"I think this is baseless," Rob Zelinka, infrastructure director Chicago-based freight car company TTX Co., which is migrating off the mainframe to HP servers. "I feel companies buy the mainframe because the OS is integrated with hardware giving it reliability. I don't think many companies would consider using z/OS on other hardware."

Are claims of monopoly baseless?
The Justice Department's inquiry follows on the heels of a federal judge dismissing a complaint by mainframe competitor T3 Technologies. That complaint stemmed from back-and-forth lawsuits that IBM and Platform Solutions Inc., filed against one another in late 2006. IBM sued PSI for patent infringement on its z/OS mainframe operating system, and PSI fired back with a countersuit, claiming that IBM was shutting out competition by coupling z/OS with its mainframe hardware. When IBM subsequently bought PSI, that fight was settled.

I don't think many companies would consider using z/OS on other hardware.
Rob Zelinka,
infrastructure directorTTX Co.
Both PSI and T3 wanted their customers to be able to license z/OS on their Intel-based server hardware.

When PSI sued, T3 Technologies filed its own motion in support of PSI. T3 had a licensing agreement to resell PSI technology under its Liberty Server brand, and planned to continue to support its existing customer base. In addition to T3's actions in the U.S., the company has also filed antitrust complaints with the European Commission.

The Computer & Communications Industry Association -- which has a history of conflict with companies it considers to be monopolies -- has also jumped into the mix. For its part, IBM has said in a statement that T3's claims have no merit and that it will cooperate with the Justice Department's inquiry.

"We understand the Department of Justice has asked T3 for documents from the litigation," says the IBM statement. "We continue to believe there is no merit to T3's claims and that IBM is fully entitled to enforce our intellectual property rights and protect the investments that we have made in our technologies."

Charles King, an IT analyst at Pund-IT Inc., said he thinks the result of the inquiry will be a litmus test on the Obama administration's attitudes toward businesses and market competition. King also said he thought the claims were baseless.

But Robert Rosen, a mainframer and the CIO at the National Institute of Arthritis and Musculoskeletal and Skin Diseases of the National Institutes of Health, said it's probably too early to discern the quality of the claims.

Because Rosen works for the federal government, he wouldn't discuss the case in detail. But he did say that "unless you have access to the documents [the Department of Justice] has, you can't really conclude anything."

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.

Related Topics: Unix servers, VIEW ALL TOPICS

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