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EC launches formal probes into IBM's mainframe biz

Emulators and maintenance services

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Antitrust authorities at the European Commission have been listening to clone mainframe seller T3 Technologies' cries after IBM ate and killed clone mainframe maker Platform Solutions a few years back. Complaints from TurboHercules, a supplier of a mainframe hardware emulator for x64 servers that IBM refuses to license software for, have also come to the EC's notice.

Today, the EC initiated a formal antitrust investigation into IBM for infringing antitrust rules relating to the abuse of a dominant market position, according to a statement. T3 filed a complaint in 2007 and kept it alive after its former partner, Platform Solutions, settled its lawsuits and was eaten by Big Blue, thus killing off a line of clone mainframes.

TurboHercules is a commercial implementation of the open source Hercules mainframe hardware emulator, which lets IBM's mainframe systems software run on x64 and Itanium processors and which was launched in September 2009. TurboHercules, which has been unable to get IBM to agree to sell its mainframe software on top of its eponymous emulator, filed a complaint with the EC antitrust authorities in March of this year.

IBM has plenty of legal headaches in its System z mainframe business. Back in October 2009, the US Department of Justice also opened up an investigation into IBM's mainframe business practices. And Neon Enterprise Software, which makes a tool called zPrime for offloading work from standard mainframe engines to cheaper specialty engines in the box, said last month it would be filing a complaint with the EC. In December 2009, Neon sued IBM in the US District Court for the Western District of Texas for its anticompetitive practices in the mainframe market.

In the investigation announced today, the EC said it was focusing its investigation on IBM's alleged tying of mainframe hardware sales to is mainframe operating systems. (It's actually the other way around. You can buy a mainframe without an operating system - TurboHercules and T3 both want to sell you one - but you cannot buy the mainframe operating system license and put it on a non-IBM mainframe, except in rare cases on ancient Amdahl and Hitachi iron running in some corner of a data center somewhere.)

The EC said that in 2009 approximately €8.5bn worldwide and €3bn in the European economic area were spent on new mainframe hardware and operating systems, so this is not a small potatoes issue.

"IBM is alleged to have engaged in illegal tying of its mainframe hardware products to its dominant mainframe operating system," said the EC statement. "The complaints contend that the tying shuts out providers of emulation technology which could enable the users to run critical applications on non-IBM hardware."

The EC opened up a second investigation into IBM's maintenance services practices. In its statement, the EC said it "has concerns that IBM may have engaged in anti-competitive practices with a view to foreclosing the market for maintenance services (i.e. keeping potential competitors out of the market), in particular by restricting or delaying access to spare parts for which IBM is the only source".

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