Start-up throws Liberty, Integrity and HP at IBM's lawyers

PSI has struggled to get its gear out the door, most recently due to the delays behind Intel's dual-core "Montecito" version of Itanic. But HP started slotting that chip into its Superdome systems late last year, and PSI hit the ground selling.

PSI claims that it offers the only real alternative to IBM's mainframe business and that it can save customers a ton of cash. "We compete very well with the z9 business class systems from IBM and very well with the lower-end enterprise class systems," Zider said.

As computer legend has it, Amdahl sales folk used to leave branded coffee mugs with customers so the IBM sales reps would know the competition was in town. The mugs became known as the "million dollar coffee cups" due to the amount a customer could save during negotiations with IBM.

Amdahl and Fujitsu managed to claim close to 25 per cent of the mainframe market, during their hey-day, but no such competition exists today. Instead, IBM has built up a multi-billion dollar empire full of hardware, software and services sales.

"The million dollar coffee cup is worth a lot more today than it was then," Zider said.

Beyond cost, PSI claims a performance advantage over IBM since it runs on speedy Itanium chips. The PSI-branded boxes add variety as well, running z/OS, WIndows, Linux and soon HP-UX.

IBM is clearly concerned by the combination of PSI's software and Itanium-based hardware. The last thing IBM wants is Intel's 64-bit chip marching into the lucrative core of the mainframe market.

And so, in late 2006, IBM nailed PSI with a lawsuit and decided it would not support customers running PSI's software.

"PSI seeks to usurp the value of IBM's investment," IBM said in the lawsuit. "PSI has developed and is bringing to market and offering for sale computer systems ('emulator systems') that seek to imitate IBM's computers and that PSI claims will run IBM's copyrighted operating systems and other software programs on computers other than the ones for which the IBM software was written.

"PSI has license that is has violated by doing the emulation. IBM looks to terminate the license. PSI also infringes on IBM's patents."

IBM found a whopping total of five patents that PSI allegedly violates. PSI denies such claims.

PSI struck back in a most expected fashion, bringing anti-trust charges against IBM.