Welcome!

IBM Cloud Authors: Sematext Blog, Pat Romanski, Elizabeth White, Liz McMillan, JP Morgenthal

Related Topics: ColdFusion, IBM Cloud, Containers Expo Blog

ColdFusion: Article

T3 Sues IBM To Break its Mainframe Monopoly

Its 47-page suit filed in district court in New York the other day says IBM has been squeezing out any competition

T3 Technologies Inc., once the world's second-largest mainframe systems integrator, has sued IBM for destroying its business, charging it, for starters, with tying, monopoly maintenance and leveraging, denying access to an essential facility and restraint of trade.

It has asked the court for permission to join the massive, very similar antitrust suit that mainframe wannabe Platform Solution Inc. (PSI) filed against IBM earlier this year.

T3, a PSI reseller, wants a jury trial, treble damages, IBM's anticompetitive practices permanently enjoined and the court to order IBM to license its mainframe patents, which it says are an essential facility, on reasonable and non-discriminatory terms.

Its 47-page suit filed in district court in New York the other day says that since IBM's consent decree with the United States government was phased out in 2001 IBM has been systemically squeezing out any competition to its mainframe monopoly and that it has reneged on its undertaking to the government to keep its mainframe operating system available on RAND licensing terms after the decree expired.

It accuses IBM of conning the market into standardizing on IBM mainframe architecture by freely and broadly disseminating its hardware and software specifications and then pulling the rug out from under it by refusing previously guaranteed licenses.

"IBM's policy of RAND licensing and system openness was integral to its success, public image and reputation," it says. "Consumers have been deceived into purchasing IBM's products based on its reputation and representations of openness and fairness."

T3 is particularly incensed that "IBM postures itself as a champion of 'open systems and standards,'" demanding that competitors like Microsoft provide reasonable and non-discriminatory access to interoperability information but won't do it itself. It's a fraud and a hypocrite, it says.

And T3 points out that the market is completely captive to IBM. There are no reasonable PCM substitutes; the TCO of an IBM z/990 is 30%-60% cheaper than combining 30 Sun or Linux boxes to do the same task. And upwards of a trillion dollars worth of mainframe software, mostly written in COBOL, can't be rewritten and run on other machines.

Its suit reminds the court that when the DOJ agreed to dissolve IBM's consent decree the DOJ warned that "should IBM engage in anticompetitive tying - be it to parts or operating system - the United States could bring an action for injunction relief…" and that "IBM would be liable to a host of potential private treble damage actions."

QSGI, a buyer, refurbisher and reseller of IBM zSeries mainframes, also said IBM is forcing it out of business during its Q3 conference call with Wall Street a few weeks ago.

It blamed IBM's use of "actionable anticompetitive business practices" that "have impacted the entire industry for remarketing of these zSeries mainframe systems."

T3 says money is behind IBM's monopoly protection. "If the downward trend in price per MIPS between 1960 and 2000 had continued from 2000 to 2006, the price per MIPS should now be approximately $165 - but today it is more than six times that amount at approximately $1,000." As a result, the largest systems today cost closer to $18 million rather than $3 million.

According to the story T3 told the court, it used to resell low-end sub-50 MIPS IBM mainframes mostly to SMBs and state and local governments while IBM concentrated on the Fortune 500, that is it did until IBM eliminated all its sub-60 MIPS products in 1999. T3 claims the move forced small users to buy bigger, pricier machines than they needed.

So without that IBM product to sell, T3 started selling its own Intel-based tServer in 2000.

With software from Fundamental Software Inc. (FSI) the tServer could run IBM's 31-bit mainframe operating system. It was a cheaper sub-80MIPS stand-in for IBM mainframes - and since Amdahl and Hitachi had just exited the mainframe market - T3 was the only alternative to IBM's larger machines.

The FSI software was created under a patent license from IBM and IBM's PC unit even created a product out of it that T3 was going to resell until IBM discontinued the product six months later.

Anyway, T3 sold 600 of its tServers worldwide to accounts like the US Air Force for AWAC and nuclear weapons control applications.

Then the consent decree was dissolved and less than a year later, the suit says, IBM VP of North American mainframe channel sales Richard Cummings and IBM VP of US mainframe channel sales told T3 president Steven Friedman that IBM didn't like T3 selling those tServers even if IBM didn't offer products with similar power or pricing.

And if T3 didn't stop selling them, they allegedly said, IBM would prohibit T3 from selling its mainframes. T3 refused and IBM canceled its sales contract at the end of 2002.

But T3's tServer business was good and revenues increased. It was selling 100-150 machines a year and FSI's technology improved so it could scale to 100 MIPS.

Then, in 2004, IBM discontinued the 31-bit OS on which the tServer was based and contrary to its usual practice ceased to support all its older mainframe operating systems. The z/OS became its only mainframe operating system.

IBM also announced that z/OS would only be supported on 64-bit hardware and it refused to license FSI the IP underneath z/OS so FSI could make its software compatible and run it on alternate 64-bit hardware.

Left without a product again, T3 tried selling PSI servers, which run z/OS, z/VSE, OS/390 and VSE in 31- or 64-bit technologies - as well as Windows, Linux and Unix - and scale up to 260 MIPS.

IBM ran hot and cold in license discussions with PSI for a few years and it ultimately refused to license the start-up its older OS/390-related patents or z/OS discontinuing a decades-long practice. IBM even took down the web site where it represented that it licenses its patents on a non-discriminatory basis.

It refused to license z/OS to users unless they bought IBM hardware and it refused to provide PSI with the critical interface information that IBM used to provide, stuff that's needed to develop a compatible mainframe operating system. It also demanded proprietary information from PSI without promising not to use it as a precondition to further negotiations.

And then when they started marketing the systems anyway IBM allegedly told T3 customers that using the PSI Liberty Servers would result in a loss of reliability, availability and serviceability (RAS) and that IBM is "committed to putting PSI out of business."

T3 calculates the market-wide cost of IBM's "exclusionary campaign" in the billions of dollars passed on to the consumer. It wants damages based on lost profits and loss business opportunities.

It repeats IDC calculation that the market for systems up to 350 MIPS approaches 1,000 systems a year worth $500 million in sales.

For more information about Kidaro's virtualization solutions, please contact Nazli Ekim at SS PR, (646) 278 6014 -office (917) 355 9650 -cell nekim@sspr.com.


More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

Comments (1) View Comments

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Most Recent Comments
Kevin Kinney 12/01/07 12:21:45 PM EST

Another puppy on the tit turns into a leech on the ass.

@ThingsExpo Stories
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Is the ongoing quest for agility in the data center forcing you to evaluate how to be a part of infrastructure automation efforts? As organizations evolve toward bimodal IT operations, they are embracing new service delivery models and leveraging virtualization to increase infrastructure agility. Therefore, the network must evolve in parallel to become equally agile. Read this essential piece of Gartner research for recommendations on achieving greater agility.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....