Original URL: http://www.theregister.co.uk/2008/07/02/ibm_buys_psi/
IBM rids world of mainframe up-start PSI, inherits Itanium server biz
If you can't beat them, buy them
Platform Solutions Inc. (PSI), the upstart mainframe house that's been leading international anti-trust charges against IBM, has today been bought by, er, IBM.
IBM refuses to disclose how much it paid for the start-up at this time. It did, however, confirm that the two companies have dropped their legal charges against each other now that they're one and the same.
PSI came to life tweaking HP's Itanium-based Superdome servers to run mainframe software through a fancy emulator. Later, it brought NEC on board as another server supplier. So, now IBM has HP's Itanium gear in-house, although a company spokesman declined to comment at this time as to whether or not IBM will keep selling the systems.
Itanium? God forbid.
HP attempted to acquire PSI for close to $200m, but the deal fell through, according to PSI, when IBM's lawyers arrived at PSI's door in 2006 with a patent infringement lawsuit, accusing the company of five IP-related offenses and breaching a licensing agreement for IBM software.
PSI shot back in 2007 claiming that IBM was abusing its mainframe monopoly to keep competitors out of the market. The sentiments were shared by others in the business, such as the leading mainframe reseller QSGI, which warned it would need to exit the mainframe business due to "a leading OEM" blocking its ability to sell refurbished boxes. T3 Technologies, another mainframe player, has also sought to join PSI's lawsuit against IBM.
The start-up also opened a European front against IBM last December, when it filed a similar antitrust complaint with the European Commission.
PSI's fight against IBM has attracted the attention of big names in the industry such as Microsoft, which invested $37m in PSI in November 2007.
"We will be around, and IBM will have to deal with us one way or another," said PSI CEO Michael Maulick at the time.
And indeed it has.
"I can say that we acquired PSI based on technologies and skill sets they bring to the IBM portfolio," said an IBM spokesman, "and that aspects of PSI's technologies will be integrated into future product strategy and product plans for the IBM system z."
PSI's mainframe emulation technology resulted from work done years ago by Amdahl. The company looked to attack the lower-end of IBM's mainframe business by bringing z/OS-friendly software onto Itanium-based servers, which in theory offered better performance at a lower price than IBM's hardware.
While IBM once allowed PSI to play in the mainframe market, it later stopped supporting software running on the PSI machines. This policy along with the lawsuit against PSI put the company in a limbo that made attracting mainframe customers very tough.
IBM should be congratulated for finding a way out of this very, very difficult situation by simply buying the only thing resembling a challenge to its mainframe monopoly. Way to show them who's boss, PSI. ®