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IBM guns down Neon's mainframe accelerator in Texas

SET zPrime SHUTDOWN

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The hired legal guns were blazing, and when the smoke cleared, the US District Court for the Western District of Texas, located in Austin, granted a permanent injunction in favor of IBM in a long-running lawsuit Neon Enterprise Software, killing the controversial zPrime mainframe acceleration program.

The zPrime tool was launched in July 2009 in the middle of the Great Recession and a lull in System z mainframe sales as customers awaited the System zEnterprise 196 mainframes that came out a year later, when the economy recovered somewhat. IBM was in no mood for such shenanigans: it never is when it comes to its mainframe business.

The zPrime tool allowed portions of workloads that run on standard System z mainframe engines using the z/OS operating system to be run on so-called specialty engines that are approximately one-quarter to one-fifth of the price of a standard engine.

Specifically, the zPrime tool got around governors IBM put into its mainframes restricting such offloading – to System z Application Assist Processor (zAAP) for offloading Java and XML workloads, or to the System z Integrated Information Processor (zIIP) to accelerate DB2 databases.

Because mainframe shops generally pay metered usage fees for mainframe systems software, such zPrime offloading cuts into IBM's hardware spending and, more importantly, puts a big bite in the monthly software bill that Big Blue can send out to mainframe shops using zPrime.

Soon after zPrime's launch, IBM started telling customers that their license agreements for mainframe software prevented them from using zIIP and zAAP engines using the zPrime tool, which Neon countered was not the case at all.

By December 2009, quite predictably, the lawyers were called in, with Neon suing IBM in the Texas court basically arguing that there were no provisions restricting the use of zPrime in IBM's mainframe software contracts and that in essence IBM's mainframe barn door was open, the horse was out, and IBM was trying to seal off the exit after the fact.

Neon alleged that IBM's unfair business practices (trying to scare off zPrime buyers) was in violation of the Lanham Act and of the unfair competition laws in California, and that threats of litigation against mainframe shops who used the zPrime tool violated the Texas Deceptive Trade Practices Act and provisions of the act that created the Federal Trade Commission.

In January 2010, IBM countersued, alleging that "Neon's business model expressly depends upon Neon inducing IBM's customers to violate their agreements with IBM" and somewhat comically said that Neon was "no different than that of a crafty technician who promises, for a fee, to rig your cable box so you can watch premium TV channels without paying the cable company."

Obviously, the US District court in Texas agreed. Neon issued a statement late yesterday saying that the court had issued a permanent injunction against Neon and its distribution partners and affiliates that precludes them from marketing, selling, licensing, renewing, installing, distributing, importing, or exporting the zPrime tool.

A salient chunk of the injunction was reprinted in the statement:

"The US District Court has ruled that (1) only workloads expressly authorized by IBM may be processed on Specialty Engines (including zIIPs and zAAPs) and (2) IBM's contracts, including the IBM Customer Agreement and the License Agreement for Machine Code, prohibit software (a) that enables workloads not expressly authorized by IBM to be processed on Specialty Engines or (b) that circumvents IBM's technological measures in Machine Code that protect the Built-in Capacity of Specialty Engines and enables workloads not expressly authorized by IBM to be processed on Specialty Engines."

That settles that.

Neon has agreed to ask licensees and customers to remove and destroy their copies of the zPrime tool, and Neon will not renew, extend, or transfer any existing zPrime licenses or warranties.

Although the settlement did not say this, it is likely that IBM itself has control of the zPrime code. Neither IBM nor Neon were available at press time for comment. ®

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