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Microsoft-Backed Firm Says IBM Is Anticompetitive
BBCWatcher writes "Microsoft has long claimed that the mainframe is dead, slain by the company's Windows monopoly. Yet, apparently without any mirror nearby, Microsoft is now complaining through the Microsoft-funded Computer & Communications Industry Association that not only are mainframes not dead, but IBM is so anticompetitive that governments should intervene in the hyper-competitive server market. The Wall Street Journal reports that Microsoft is worried that the trend toward cloud computing is introducing competition to the Windows franchise, favoring better-positioned companies including IBM and Cisco. HP now talks about almost nothing but the IBM mainframe, with no Tukwila CPUs to sell until 2010. The global recession is encouraging more mainframe adoption as businesses slash IT costs, dominated by labor costs, and improve business execution. In 2008, IBM mainframe revenues rose 12.5% even whilst mainframe prices fell. (IBM shipped 25% more mainframe capacity than in 2007. Other server sales reports are not so good.) IBM mainframes can run multiple operating systems concurrently, including Linux and, more recently, OpenSolaris."
Talk about the pot calling the kettle black!
Wait, if the server market is hyper-competetive, then there's no serious anti-trust issue right? I mean, would you call the desktop OS market "hyper-competetive"?
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We need more details about what anti-competitive things IBM is doing. OK, it sells machines that seem to give customers more value for money, in their perception, while still making massive profits. Lucky IBM, but isn't that what business is all about? What have they been doing to stop others competing with them - if they can? Have they been saying that you cannot connect Windows machines to their mainframes? Have they been refusing to run Microsoft software (if you can get the appropriate license) on their virtual machines? Or what else?
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The sad part is that IBM only became a monopoly in the mainframe market because no one else wanted to make and sell them anymore. So now people are thinking about mainframes again for things like cloud computer and suddenly the argument is that IBM is not allowing competition in the market. Maybe if other companies didn't abandon the mainframe market, there would be more than just IBM left standing in it. The issue though is not whether they are a monopoly in that market (which they are, probably just as much as Microsoft is on the desktop market), but are they using it to prevent competition from others or in other markets?
How does IBM's practices in the 1960s and 1970s relate to the companies that were competing with IBM in the mainframe marketplace in the 1990s? Fujitsu and Hitachi, both huge corporations with substantial financial resources, were competing with IBM in the 1990s with mainframe compatible systems. Both Fujitsu and Hitachi decided they had better places to invest funds than developing mainframe servers. Both Fujitsu and Hitachi lacked IBM's faith in the technology and vision of where it could go. IBM is now reaping the benefits of its decision to continue investing substantial funds in mainframe R&D while many in the industry were declaring the technology a relic of a bygone era.