Start-up throws Liberty, Integrity and HP at IBM's lawyers

IBM sufferred through anti-trust remedies around its mainframe business in the past, although rulings against it were shelved in 2001, when all the mainframe competitors exited the market. At the time, the Department of Justice stated,

"If, after the Decree terminates, IBM engages in any anticompetitive activity that would violate the antitrust laws, it would immediately be liable to suit. For example, should IBM engage in anticompetitive tying—be it to parts or operating systems—the United States could bring an action for injunctive relief both to stop the illegal conduct and to get other, broader prophylactic relief."

By refusing to support customers using PSI-branded hardware, IBM violates the DOJ orders, according to PSI.

"IBM's action has impaired our business," said PSI vice president Christian Reilly.

Ultimately, PSI claims that IBM's actions hurt customers and hurt the vibrance of the mainframe market. Customers will be more inclined to stick with mainframes and be more enthusiastic about the aging technology if they see choice in the market, particularly choice based on a modern chip such as Itanium.

Maybe so, maybe not

While PSI talks a good, heart-warming story, the company's claims sound hollow to one analyst, especially with PSI going after the lower-end 400 MIPS and below market.

"As I've said on many occasions, if you give a small company a big machine for free, the software charges will bankrupt it," said Phil Payne of Isham Research. "You can now get medium-sized zArchitecture-capable machines - second-hand z800s - for $30,000 or so. The reason they're so cheap is that the software is so expensive."

Beyond that, "PSI isn't manufacturing systems. They're buying not especially cheap HP Superdomes and at the quantity they'll be buying, they'll not getting much discount.

"And the market is, over time, rejecting both IBM's mainframe architecture and Itanium."

Pretty Sly Inc.

Any chances PSI has at cutting into the mainframe market have obviously been hampered by the IBM lawsuit and forced the start-up into some crafty actions.

For example, a news statement this week made its way to mainframe customers announcing a deal between mainframe systems integrator T3 and PSI. T3 has secured four new customer shipments in the "past 60 days" - just about the amount of time since IBM first filed its lawsuit against PSI. The so-called Liberty Servers are, of course, HP's Itanium-based Integrity servers with PSI's firmware.

And one of the new customers happens to be the University of Alabama - the longtime home of the IBM mainframe mailing list.

To top it all off, the author of the T3 news statement - according to the properties tags in the document - is not a T3 representative but instead "christianr," who we're quite sure is PSI's VP Christian Reilly.

It seems clear that PSI won't back down from IBM without a serious fight. You can't help but wonder how such a battle would go with HP firmly backing PSI's stance in court. How could a combined PSI/HP lose with Liberty, Integrity, truth, justice and the American Way on their side? ®