Click here to close now.

Welcome!

Websphere Authors: Liz McMillan, Elizabeth White, Baruch Sadogursky, Pat Romanski, Yeshim Deniz

Related Topics: ColdFusion, Websphere, Virtualization

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
Wearable devices have come of age. The primary applications of wearables so far have been "the Quantified Self" or the tracking of one's fitness and health status. We propose the evolution of wearables into social and emotional communication devices. Our BE(tm) sensor uses light to visualize the skin conductance response. Our sensors are very inexpensive and can be massively distributed to audiences or groups of any size, in order to gauge reactions to performances, video, or any kind of presentation. In her session at @ThingsExpo, Jocelyn Scheirer, CEO & Founder of Bionolux, will discuss ho...
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impact.
Every day we read jaw-dropping stats on the explosion of data. We allocate significant resources to harness and better understand it. We build businesses around it. But we’ve only just begun. For big payoffs in Big Data, CIOs are turning to cognitive computing. Cognitive computing’s ability to securely extract insights, understand natural language, and get smarter each time it’s used is the next, logical step for Big Data.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
17th Cloud Expo, taking place Nov 3-5, 2015, 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 enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, data security and privacy.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps 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 opportunity. Submit your speaking proposal today!
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Converging digital disruptions is creating a major sea change - Cisco calls this the Internet of Everything (IoE). IoE is the network connection of People, Process, Data and Things, fueled by Cloud, Mobile, Social, Analytics and Security, and it represents a $19Trillion value-at-stake over the next 10 years. In her keynote at @ThingsExpo, Manjula Talreja, VP of Cisco Consulting Services, will discuss IoE and the enormous opportunities it provides to public and private firms alike. She will share what businesses must do to thrive in the IoE economy, citing examples from several industry sector...
Container frameworks, such as Docker, provide a variety of benefits, including density of deployment across infrastructure, convenience for application developers to push updates with low operational hand-holding, and a fairly well-defined deployment workflow that can be orchestrated. Container frameworks also enable a DevOps approach to application development by cleanly separating concerns between operations and development teams. But running multi-container, multi-server apps with containers is very hard. You have to learn five new and different technologies and best practices (libswarm, sy...
SYS-CON Events announced today that DragonGlass, an enterprise search platform, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. After eleven years of designing and building custom applications, OpenCrowd has launched DragonGlass, a cloud-based platform that enables the development of search-based applications. These are a new breed of applications that utilize a search index as their backbone for data retrieval. They can easily adapt to new data sets and provide access to both structured and unstruc...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th 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 an...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
SYS-CON Events announced today that the "First Containers & Microservices Conference" will take place June 9-11, 2015, at the Javits Center in New York City. The “Second Containers & Microservices Conference” will take place November 3-5, 2015, at Santa Clara Convention Center, Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...