NEWS & ANALYSIS

EU Commission initiates formal investigations against IBM in two cases of suspected abuse of dominant market position

by Directorate General for Competition of the European Commission

(26 July, 2010)

The European Commission has decided to initiate formal antitrust investigations against IBM Corporation in two separate cases of alleged infringements of EU antitrust rules related to the abuse of a dominant market position (Article 102 TFEU). Both cases are related to IBM's conduct on the market for mainframe computers. The first case follows complaints by emulator software vendors T3 and Turbo Hercules, and focuses on IBM's alleged tying of mainframe hardware to its mainframe operating system. The second is an investigation begun on the Commission's own initiative of IBM's alleged discriminatory behaviour towards competing suppliers of mainframe maintenance services.

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BowlerRoger Bowler Responds to IBM Patent Attack on Open Source

by Roger Bowler Creator of Hercules and Co-founder of TurboHercules

(Posted in News & Blogs section of turbohercules.com on 6 April, 2010)

As many of you know, the company I founded to promote the Hercules open source mainframe emulator, TurboHercules SAS, has filed an antitrust complaint against IBM with the European Commission in Brussels. We are not asking that IBM be subjected to punishing fines or anything like that. We simply want IBM to agree to allow legitimate paying customers of its z/OS mainframe operating system to deploy that software on the hardware platforms of their choice – including, should they so choose, on low-cost servers using Intel or AMD microprocessors and Hercules.

I want to make clear that we undertook this action reluctantly, and only after a long period of reflection during which we reached out to IBM to see if there was some way to resolve our differences amicably. I regret to report that IBM rebuffed our efforts at conciliation, and even added fuel to the fire by launching accusations against Hercules. I would like to take this opportunity to respond to some of those charges.

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The Issues of Competition in Mainframe and Associated Services in India

by Indian Council for Research on International Economic Relations and Indicus Analytics

Very little is known about the extent and nature of competition in the mainframe and associated services market in India. This is the first study to analyze competition and related issues in the Indian server market, with an extensive focus on mainframe computing.

Download the report PDF (4MB)

Steven FriedmanThe T3 Technologies story

by Steven Friedman, T3 Technologies

For over 15 years, my company was a successful IBM Business Partner. I used to have a thriving company with over 50 employees, nearly 1,000 customers in 28 countries (including 200 customers in 15 European Community states) and a profitable revenue stream earned through selling mainframe solutions to IBM customers. However, now our company is effectively out of business due to the direct actions of the company I used to be closely aligned with: IBM.

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About OpenMainframe.org

OpenMainframe.org is a forum for exchanging news, views and information related to creating an open market for IBM-compatible mainframe solutions.

The OpenMainframe.org website has been built by a community of individuals and companies who share a common interest in promoting a fair, open and diverse marketplace for mainframe solutions. The creators of this site wish to thank T3 Technologies, Microsoft Corporation, the Computer & Communications Industry Association, Peerstone Research, TurboHercules and others for their support in helping to make this site a reality. Together we believe that IT customers can benefit from lower costs, increased innovation, broader choice and better customer service when markets are truly open and multiple vendors compete for business.

An IBM-compatible mainframe is defined as a computer system capable of running IBM’s mainframe operating system software such as z/OS, z/VSE or TPF. This definition once included not only mainframe computers from IBM such as System z but also “IBM plug-compatible mainframes” from companies such as Amdahl or Hitachi, as well as mainframe software emulation systems from companies such as Platform Solutions Inc. and Fundamental Software Inc.

The creators of this site believe the following conditions exist in the mainframe market:

  • The IBM-compatible mainframe continues to play a critical role for businesses and governments worldwide. According to IBM, it is estimated that over 80% of corporate data and $5 trillion worth of business assets reside on IBM mainframe systems today.
  • IBM has repeatedly taken action against potential competitors in the mainframe market. These actions have directly and negatively impacted companies who have endeavored to respond to customer demand and deliver competitive offerings for mainframe users. As a result, IBM is now the only vendor of an IBM-compatible mainframe solution and therefore has a 100% monopoly for these types of systems.
  • Despite IBM’s stance that platforms should conform to open standards, the IBM mainframe is one of the most proprietary systems in use today with interfaces that typically do not conform to any established industry standards. As a result, applications that use mainframe interfaces are locked into the IBM mainframe and cannot be easily moved to other systems.
  • IBM has discontinued its past practice of licensing its mainframe system software and patents for use on alternative platforms, thereby extinguishing all possibilities for other vendors to build IBM-compatible mainframe platforms – even though such platforms are technically feasible and available.
  • IBM currently only permits the sale of its mainframe system software for use on its own mainframe hardware, a practice known as anticompetitive tying, which US courts have deemed to be illegal under the Sherman Act.
  • IBM’s actions are counter to the promises it made to both the European Union and the US Department of Justice when it settled past actions for anticompetitive behavior.
  • With no other options in the mainframe market, IBM is able to leverage its monopoly position and charge customers above-market prices for mainframe hardware, software and services. Even as new solutions, such as zPrime from NEON Enterprise Software, attempt to provide cost-reducing choices for locked-in customers, IBM has taken steps to remove these options for customers.

Given the current state of the IBM-compatible mainframe market, we believe that:

  • IBM mainframe system software, middleware and intellectual property should be available to all solution providers and customers for licensed use on alternative hardware platforms under reasonable and non-discriminatory terms.
  • In order to promote interoperability, compatibility and an open market for mainframe solutions, IBM should be required to publish interface and protocol information for mainframe technologies.
  • Given the strategic value of IBM-compatible mainframe systems for businesses and governments worldwide, multiple vendors should be allowed to participate in an open market for the supply of mainframe hardware, software, and services without interference from IBM. An open market will encourage price competition, differentiated innovation and broader solution choices to meet the needs of customers.

If you share this vision, we would love to hear from you. 

We welcome all parties to this site with the hope that through open information exchange and dialogue, healthy competition can be restored to the mainframe market. We encourage you to share your views and concerns our discussion forum.

Jeff Gould, Editor, OpenMainframe.org
Email OpenMainframe.org