EC launches formal probes into IBM's mainframe biz
Emulators and maintenance services
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".
Apples and Oranges
So how is IBM tying z/OS licenses to IBM hardware any different from Apple tying MacOS licenses to Apple hardware?
And as long as the customer purchases a legit license, isn't talk of intellectual property rights irrelevant? Even if the clone-makers need to know the secret herbs and spices to support the OS, doesn't competition law allow the OS vendor to demand a "fair and non-discriminatory" license and NDA?
You, sir, have very much more eloquently pointed out what I intended to say. Thank You.
WTF ? Ever Heard Of The Term "Free Enterprise" ?
IBM does have the right to make product pricing and licensing decisions as they see fit. Apple exercises exactly the same right by requesting you to run MacOS only on Apple PCs.
Running it inside VMWare is illegal, though technically possible, as I verified personally.
IBM is totally correct in saying that they spent huge sums into the whole system and according to the commonly accepted rules of the Western World it is completely their property, so they have the right to determine how this property is used by other parties.
The Hercules people are just economic parasites who want to exploit the particular structure of IBMs pricing scheme. IBM has the legal and ethical right to deny this, as they employ thousands of highly skilled and paid people to develop the Marvel that is OS/390 and the S/390 system (I hate the meaningless a/b/c/z/i/k/mOS labels). Hercules only created an S/390 CPU emulator and now they want to use IBM software on that, which is vastly more expensive to develop.
The only exception to this rule would kick in if IBM were in a market-dominating position, which they are clearly not. Nobody is forced to buy a S/390 system - HP (e.g. a Superdome server), Oracle, Unisys, Teradata, Fujitsu, Groupe Bull, NEC and others provide very credible alternatives to IBM products.
Others like Google have proved that, given the right software architecture, one does not need a mainframe at all. Just a large set of cheap PCs can handle enormous workloads (say all of Europe's flight reservations) as reliable as a mainframe at 1/10th of cost. It does not matter that PCs have a much higher failure rate.
The basic idea is to split up a large problem and "map" the individual slices to the PCs. For example, each PC would handle just five aircrafts and the system would automatically route users to the correct PCs to make reservations. Harddisks would be mirrored with something like the Google File System and another PC would automatically take over and use on of the three mirror disks to continue operations. The GFS would also run on a PC cluster. All of those PCs are networked using standard 1GBit Ethernet switches and routers.
For a moderately sized mainframe, you can buy more than 500 High-End PCs, including all networking and run a much larger workload, assuming your software supports this system model.