US DoJ investigates IBM mainframe biz
Big Blue faces probes from both ends
The US Department of Justice has opened an investigation into IBM's mainframe business at the instigation of the CCIA.
The move means IBM faces the prospect of competitions probes from both sides of the Atlantic, after rack server company t3 filed a complaint with the EU over IBM's mainframe business practices back in January.
Comunications and Computer Industry Association's chairman Ed Black told Reuters yesterday that the DoJ was investigating whether IBM had committed a number of abuses of its dominant position.
These include withdrawing licenses from customers who use non-IBM hardware, squeezing "disloyal" partners, offering bundling deals, and acquiring upstart mainframe developer PSI last year.
A central accusation is that IBM refused licenses to users who wanted to run the mainframe OS on x86-based hardware using the open source emulator Hercules.
The team behind Hercules went commercial last month, launching TurboHercules, which they pitched as a "platform for disaster recovery and for "education", largely to avoid a direct confrontation with Big Blue.
An IBM spokesman told Reuters: "IBM intends to cooperate with any inquiries from the Department of Justice. 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."
The firm also said that a New York court threw out an antitrust complaint from t3 last month. The judge decided that a refusal to license its OS did not constitute anti-competitive conduct.
It's not hard to see why IBM might be concerned about its mainframe ecosystem being seduced away from its scarily expensive hardware onto (arguably) less expensive industry standard platforms. As well as losing hardware revenues, service and maintenance revenues would also be at risk.
It was threatened enough by PSI, which used an emulator to run mainframe software on HP's Superdomes, to launch a long-running patent infringement spat, before simply hoovering up the firm for an undisclosed sum last year.
In many ways, this is all a case of back to the future. IBM was fighting with competition authorities right from the birth of its computing business back in the 1950s. It was the 1970s before the US DoJ finally brought IBM to heel and forced the opening-up of the mainframe market.
As the PC came into vogue and other vendors left the mainframe market, it seemed as if IBM's big iron business would eventually decline too. But big businesses, and big government, remained strangely attached to their mainframes, and firms like PSi started to look at the market anew. ®
IBM DOJ probe indirectly related to ongoing Apple and AutoDesk lawsuits
Author writes, "A central accusation is that IBM refused licenses to users who wanted to run the mainframe OS on x86-based hardware using the open source emulator Hercules."
Sounds like Apple MacOSX... Apple refuses to license MacOSX on non-Apple hardware.
This also seems somewhat related to the AutoDesk lawsuit.
The impacts to the industry could be pretty far-reaching.
Yes, the HARDWARE may be cheaper, in terms of raw computing power per dollar, however, that is NOT what makes Mainframes using OS390 a good deal, its the way the CPU's in a mainframe are licensed...
We're moving MASSIVE numbers of systems to zVM linux virtualization on our big iron and we estimate we've saved over $10M this year doing so vs licensing WebSphere, Oracle, DB2, etc on other platforms.
Also, common hardware simply can't compete when it comes to true mass performance MIPS calculations. Handling billions of transactions per quarter is not something a standalone cluster, or even grid, of x64 can do at any reasonable price. Again, hardware can be had, but licensing all those individual cores is a killer, and handling IOPS load spread across dozens of chassis (or racks of chassis) in complex grid systems requiring custom code, custom support, and custom hardware, is simply not ideal when compared to an extensible highly available big iron chassis.
The mainframe is not going away anytime soon for one other reason: legacy code. We alone have 7+ million lines of cobol code, the conversion of which is a unimaginable effort, and upon which over 2,000 other servers depend (which also would require significant rewrites of more than 450 other applications (another several million lines of editing). The development cost of replacing our code on the 8 mainframes with common hardware would be in the $100 million of dollar range, could take a decade to complete, and would require the deployment of a complete parallel infrastructure (another 150-200 million) until the new code was stable and the applicarions could seamlessly take over for the old hat. Our annual total IT budget is barely $50 million...
Slowly we're migrating services to Java and other platform independent code bases for endpoint applicartions. We're migrating to newer database platforms that could one day be moved off this hardware platform. We're deploying new DCM applications that are eliminating some older cobol code slowly but surely, but all the new stuff is still being virtualized on the Host platform. It;s a rolling cycle, and in 15 years, give or take industry trends, we might be able to give up on the big iron for most services, but they we'd still have to find good solutions for multisite replication, disaster recovery, and archiving of nearly a petabyte of data) that's growing 50% anually).
While the mainframe is considered to be obsolete, people use PCs as servers, and the server is not obsolete. For IBM to leverage their System/360 legacy into a more reliable form of server is a reasonable enough thing to do.
And since they have chosen to distinguish emulations using just-in-time compilation from hardware emulations, not licensing software to the former, there is a legitimate competition issue to be investigated... incredible as it may seem.