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Compuware Brings IBM to Antitrust Court
pcs305 writes "
According to a news article at Yahoo, Compuware is accusing IBM of stealing code and copying Compuware manuals. They also accuse IBM of being a monopoly in the mainframe market and of anti-competitive behaviour.
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Well being a mainframe programmer, and on top of that, being an employee of Compuware, I know that in many shops, source code is included with the product to allow the client to make modifications to suit their own unique environment. In addition to that, IBM Global Services maintain the data centers where a lot of these applications are housed so they could easily gotten their hands on any applicable source code. Don't think of these applications like you would personal application on your home PC. Lisences can cost tens or even hundreds of thousands of dollars and with that price often comes the ability to alter code to meet specifications. In order to do that Source code must be provided.
I still find it interesting that only a few years ago the rumors were flying that IBM may possibly purchase Compuware. Who knows how much truth there is to those rumors. We may not have the clout that IBM has but I know our CEO to be a much more personalble individual that ALWAYS stands up for what he believes in.
Sad as it sounds, this case doesn't have the same level of interest as a Microsoft case.
Granted, IBM may well dominate in the market, but I think the case that they say that they didn't want to lower costs and then IBM entered the software market shows just how silly this case is. IBM was likely willing to work with them, but not willing to keep the prices where they were just to lose market share.
I guess we'll see how this pans out, but I bet there will be a settlement within 6 months and not a peep out of Compuware again.
The power of accurate observation is commonly called cynicism by those who have not got it. - G.B. Shaw
Rather unfortunate. Of course, the article is scant on details, but on the face of it it just seems that IBM delivered what customers wanted, and their competitors waffled. mmmmmm free market.
As for the copying, I sure hope nobody posts any opinions, because there isn't enough information here to even form one about that question.
Ryan T. Sammartino
"Ancora imparo"
"The Compuware suit says Armonk, New York-based IBM uses its massive Global Services arm, the world's largest computer consultancy, to steer customers to its own products even when products made by other software vendors may be more suitable."
How is this somehow wrong? This is called "sales" in the real world. Sales people specialize in getting potential customers to use their product even "when products made by other software vendors may be more suitable", it's what they're paid to do. Yes, IBM may have a large sales department, and yes, maybe they do try to get people to buy their products even when a competitor's products might work better, but this the nature of sales, and is hardly anti-competitive.
There's still a mainframe market?
Just the cost of switching to another OS for the mainframe, not to mention if you wanted to switch hardware, would be outrageous. Like the article says not to many companies besides Microsoft have such a hold.
Peter Karmanos is probably just upset because his company is going down the tubes right in the middle of building a huge new world HQ in Detroit and they need some loot to finish the project.
mainframe windows... just the sound of it makes me want to cry.
Yup. People are always suing Sony. That's what happens when you own everything.
"If he thinks he can hide and run from the United States and our allies, he's sorely mistaken." Bush on bin Laden
I wonder if this damning evidence was the result of a moron or by some employee pissed off cause he was forced to rip someone elses sh!t.
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What is the sound of this sentence?
For years IBM stayed well out of the mainframe database tools market, instead it was dominated by tools from Platinum (now CA, I believe), BMC, Compuware and others. To be realistic, you couldn't really run DB2 effectively without some of these tools.
Then all of a sudden IBM announces that they are going to begin selling competing tools (not bundled, but separately priced products) and the 3rd party vendors were screaming.
Why? Yes, they would have cause to be unhappy about the new competition, but one would think that their products would be technically superior in the short term (having been around for 10 years) and too well-entrenched in many shops to be easily surplanted.
Well, it actually turns out that some of these products actually didn't do much themselves. They were basically fancy front ends to code that IBM supplied with DB2 that wasn't entirely easy to access (only programmatically). We are not talking just basic funtionality here, were talking enhanced processing. IBM discovers this, and realizes that these vendors are really riding IBM's gravy train (and anyone who has ever looked at mainframe software costs will understand how much these vendors charge for a 'front-end'). So now IBM separates that code from DB2 and ships it (and their own front end) as a separate product. What does that mean for a 3rd party vendor? That if you want to use their product, you also have to have the equivalent IBM product installed. No brainer, really.
As far as I'm concerned, the 3rd party vendors deserve to get shafted here. I've seen how much they charge - and they couldn't even be bothered to write a decent tool that could ever possibly compete with an IBM supplied one...
Anyway, that's the story as I heard it..... YMMV.
What do they hope to gain from having someone telling IBM "you're evil" every time they violate antitrust laws, without the power to do anything else?
Oh, wait, IBM didn't put as much money into the governments as Microsoft...
This message is provided under the terms outlined at http://www.bero.org/terms.html
It's clear that IBM has a monopoly in the mainframe market, or at least something close to it. You can deduce this simply by looking at their pricing policies.
If you buy a mainframe then it often comes with say six CPUs, of which only one is activated. If you pay IBM some extra subscription money they will send an engineer round to activate the second CPU, or up to all six depending on how much you pay. It costs them almost nothing to do this, and it would cost nothing extra to simply have all six enabled when the machine leaves the factory, but IBM charges extra for it.
You can consider this as market segmentation - selling the same product to different parts of the market and charging different prices, so as to squeeze the most out of each consumer. If there were plenty of competition in the market, then IBM would need to sell mainframes with the best price/performance possible and would ship with six CPUs by default, at a price close to the manufacturing cost. The fact that they can get away with this pricing scheme shows they have considerable market power, if not an outright monopoly.
A more positive way of looking at the situation is that the cost of a mainframe reflects less the manufacturing costs (marginal cost), and more the R&D effort that went into desigining it or the expense of building the factory (fixed costs). In this case IBM's charging different prices, despite the marginal cost to them being no different, is just like Novell charging different prices for a 10-client Netware licence and a 100-client licence. So IBM has a monopoly on that particular mainframe design in the same way Novell has a monopoly on Netware. This is still not ideal for the consumer, but it's often considered a necessary evil to provide incentive to invest in new designs.
-- Ed Avis ed@membled.com
It has nothing todo with this article, which means its an advertisement. Such an action calls in to question the validity(sp?) of the AC's post. I suggest he be modded down.
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What is the sound of this sentence?
What happens if a non-IBM person activates the other processors. Now that hard and software support can be completely unbundled and even passed away from IBM - can they stop a customer from upgrading their system?
actually developed from the ground up for commercial use, not in the theoretical world of a university
Maybe, but it's still the theoretical world of IBM...
Yours Sincerely, Michael.
I got excited! But:
...it does not provide any operating system facilities...
(shame) and:
QPL
bleuughh....
Yours Sincerely, Michael.
I imagine that any self respecting country would have some kind of indigenous dino maker. Let's see. Germany? Nope. UK? Nope. Similar pages can be found for France. Bully for Germany and Japan for at least trying, but it looks like the US kicks ass in this field. I suppose that you can charge alot when you make something others have a hard time keeping up with.
We shall see the merits of the case.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
It may be a bit offtopic, but since you asked (and hey, this is Slashdot after all)...
Sony Pictures settles suit over phony reviews
Monopoly in the mainframe market? If the other (now mostly dead) mainframe companies would have focused on technology, instead of becoming the 'next IBM', they may not have died. Look at what Getronics did with the Wang VS mainframe - cut R&D, stopped marketing, etc.. It was ahead of it's time back in the 80's. Had they embraced open standards, and kept the emphasis on technology, they might still be around. Complain about IBM all you want, they have always (and still have) a big focus on R&D.
In other news, new antitrust lawsuits are being filed against Standard Oil, Carnegie Steel, and AT&T.
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I remember when RCA computers came in two models, a fast one and a slow one. You could upgrade the slow one into the fast one: A repairman came out and replaced a long cable with a shorter one. (I think this was models 2 and 3.)
RCA was never dominant, much less a monopoly, in the mainframe market.
This is not to doubt that IBM is a monopoly. I know that they used to be. It's just that this isn't proof (though it is evidence).
And, to an extent, the price of mainframe tools is justifible on the basis that they can't expect to sell many of them. Large mainframes are rather like electricity distribution. They are a "natural monopoly" because the entry costs are huge, and there isn't a demand for a large number of them. The reason that they aren't a natural monopoly is basically that there are other ways of accomplishing the same end. Distributed network based computers, clusters of various sorts, etc. But these are recent developments, and are probably intrinsically less efficient than mainframes. So the mainframe area has become the turf of a few (quite few) huge companies that did most of their hardware development over a decade ago (so the costs are sunk) and are selling into a comparatively small market (though IBM seems to be trying to establish web servers as a reasonable extension of their market).
I'm not sure just how much regulation this kind of market warrants. Would the companies actively develop for such a small market? Or are they basically recovering costs for software that they build before the recent structural changes in the market? Not all markets deserve to be protected against monopolies. Consider the market of producing "Metallica" albums. That is basically a monopoly (at least if I got the name right). But in this case the government hasn't decided to insist that the market be protected against the monopoly. Instead they've choosen to strengthen the monopoly. I'm not sure how much effort is justified here, either, but perhaps there is a kind of a continuum from monopolies that deserve governmental support to monopolies that deserve governmental suppression. Perhaps. I tend to believe that over most of the spectrum the appropriat reaction is for the government to ignore the monopoly, and that it should act to suppress widely spread monopolies (i.e., to cause them to cease being monopolies), and that it should support the monopolies in the use of trademarks. And that's about it.
Of course, implementation details are important, but that's the general tenor of my feelings.
I think we've pushed this "anyone can grow up to be president" thing too far.
I believe that they *do* release the source code, though I did see a reference that indicated that they kept the source for some drivers secret. Still, they are far from the only company to do that. And I wouldn't be surprised if you could get the source to those if you bought the hardware that the drivers support (probably under an NDA however.)
I believe that the MOST that the GPL could be construed to require would be that the drivers be suppliec on a separate tape (or included in the rom hardware). And they probably are. I'm not in that price range, so I wouldn't know, but IBM usually respects the laws when it's at all convenient. (Their marketing department probably got a disapproving note added to their personnel file for the grafitti campaign, even if it was an effective campaign. "It did not cause the company to be perceived in a desireable light by the respectable section of the business community." or some such.) Watson man no longer rule, but I bet his ghost has a lot of influence.
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I think we've pushed this "anyone can grow up to be president" thing too far.
I agree, this is sales. But, I should point out that Global Services (for the most part) is staffed by non-sales-types. I've done a ton of work with Global Services over the years and found (in my case anyways) they've never singled out their own products. That said, we have a standard clause we use in any of our contracts with them that clearly states they will have no contact with IBM Marketing (a separate arm) in regards to any consultantcy work with our company. Seems to work fine.
CrazyLegs
"Pork!!" said the Fish, and we all laughed.
I agree that this lawsuit is unnecessary. Unlike the Microsoft case, where the company used it's position to illegally expand it's monopoly (I.E. using licensing schemes to prevent OEM companies from shipping a second operating system with their computers), I don't think IBM has done anything similar in the past few decades. At least, I have no knowledge of them doing so. What I do know is that IBM has been really careful not to tread on other companies' toes since the first Antitrust scare brought against them, at one time refusing to drop prices to stay below costs -- for fear of being seen as a large company waging a price war -- and that cost them dearly.
The government does need to step in every once and a while to keep capitalism from growing too big. But not here, not now.
Remember "Bring 'em on"? *sigh
IANAL, but...
While IBM is still a MAJOR player in the mainframe and minifraim markets, it seems to me that they no longer have market power (they may have at one time in the ancient history of computers). IIRC, IBM was the second largest player in the server market last year, and came in behind Sun, who also manufactures mainframe and miniframe computers.
Furthermore, I am not convinced that the mainframe and miniframe markets are distinct enough to qualify for anti-trust action, though at one time they are. Comparable alternative solutions do exist with farms of commodity servers, so the hardware market is not exactly a distinct market here.
The time for anti-trust lawsuits vs IBM has passed. Get over it.
LedgerSMB: Open source Accounting/ERP
This is called a sales pitch. If I make and sell product A and a customer comes to me and wants a basic server, I don't have to tell him about another companies product, B. It's not my job. If product A will do it but it's overkill, I don't have any reason not to want to sell it. If I sell Chevy's and a customer's description of what they're needing is a Ford, I'll still sell them a Chevy. I have no reason to want to sell them a Ford, even if the Ford is the perfect fit with their needs.
Secondly, IBM ties or bundles its software products into its machines, making it difficult for independent software suppliers to compete in the mainframe market, the suit said.
It's IBM's hardware. They can bundle whatever the hell they want to bundle with it. This would be comparable to M$ suing Apple because Apple doesn't sell a G4 without the MacOS. Apple makes their hardware and the software. If they want to stop selling the hardware, jack up the software price to $2k, and bundle the hardware with it, they are perfectly within their rights to do so.
Are these people really that stupid? Are they just bucking for some publicity?
Now I don't know anything about code stealing or manual plagarism. They might very well have done that. I think these other two key points are frivolous though.
What happens is if a component fails, and needs replacing, they cannot call IBM to get the replacement part, without forking over *loads* of money, as all guarantees and warranties become void
Imagine an Open Source business model working this way:
"Sorry Mr. Smith, we have to terminate your Redhat support contract."
"But why?"
"Because you downloaded a copy for Fred's workstation, instead of buying directly from us. Didn't you read your support license?"
A Government Is a Body of People, Usually Notably Ungoverned