SaaS data loss: The problem you didn’t know you had

Analysis A quick stroll through Platform Solutions Inc.'s (PSI) data center reveals why IBM has sued the start-up. There's a hulking HP Superdome system with a tiny PSI label on it, and this box promises to do much of a mainframe's work for a fraction of the cost.

IBM and PSI have spent most of their public facing time pointing to IBM's Nov. 2006 lawsuit against PSI, and PSI's Jan. 2007 countersuit against IBM. The majority of Big Blue's gripes center on breach of contract and patent infringement claims, while PSI charges IBM with anti-trust violations and unfair competition. The involvement of HP doesn't tend to come up from either side.

PSI had made it possible to run IBM's mainframe operating system and mainframe applications on top of an Itanium-based server. Such a system could come from any Itanium vendor - Hitachi, Fujitsu, HP and others. But, as it turns out, PSI has the closest relationship with HP.

With PSI at its side, HP would gain a direct link to IBM's mainframe customer base. This could prove fruitful in the short-term, as IBM plans to end support for older 32-bit systems and software in March. Customers looking to upgrade their aging systems would have nowhere else to turn but IBM if not for the presence of the HP/PSI combination.

The PSI lawsuit reveals that at least one Itanium vendor - HP, we're looking at you - realized the potential sales at hand. The start-up claims that IBM's original lawsuit "interfered with the prospective sale of PSI to another large technology firm"- a move that caused "hundreds of millions of dollars in damages."

HP VP Mark Hudson declined to comment on the IBM and PSI litigation or whether it had interest in buying PSI.

Back Channels

PSI emerged from the swamp created by Fujitsu and Hitachi's decision to exit the mainframe market in the late 1990s instead of venturing forward to compete with IBM on the 64-bit system front.

A group of engineers who worked at Amdahl and then Fujitsu had been exploring a project code-named Stingray to bring mainframe software onto Itanium. When Fujitsu killed its mainframe operations, the engineers sensed an opportunity to pursue the Itanium plan on their own.

Due to repeated Itanium delays and some funding constraints, PSI took a while to get going. Eventually, however, the company got on board with the release of Intel's Madison flavor of Itanium in 2003.

For awhile, PSI and IBM enjoyed something approaching a working relationship. PSI secured a license to IBM's mainframe z/OS operating system. It also believed the path was clear to have IBM support customers running mainframe applications on a Itanium-based system running PSI's firmware.

"That's true," said Linda Zider, an EVP at PSI, during an interview with us. "It was a normal business relationship. IBM was supporting us with licenses, and they knew we had the Amdahl intellectual property. It is only recently that things have not worked so smoothly."

And how.

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