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IBM Faces DOJ Antitrust Inquiry On Mainframes
Several sources are reporting that IBM is facing an antitrust inquiry from the US Department of Justice due to a supposed refusal to issue mainframe OS licenses to competitors. "Part of CCIA's complaint stems from the tech giant's treatment of former competitor Platform Solutions. IBM had little competition in the mainframe market when Platform Solutions, early this decade, began work on servers that could mimic the behavior of more expensive IBM mainframes, CCIA said. Platform Solutions, based on past mainframe agreements between IBM and the DOJ, requested copies of IBM's OS and technical information under a licensing agreement. IBM declined to grant Platform Solutions a license and prohibited customers from transferring IBM software licenses to Platform Solutions machines, said CCIA, which has members that are potential competitors of IBM."
We spent years trying to get IBM to stop being a monopolistic and evil company, finally got them to change (a bit).
Then Ma Bell, resulting in them being broken up.
Now ATT/Bell is back to being a gigantic mega-company again, and IBM is back to the same stuff they tried against DEC and others.
The more things change...
An operating system should be like a light switch... simple, effective, easy to use, and designed for everyone.
How is this different from what Apple does with OS X and Macs?
Antitrust jurisprudence has changed a lot since the '60s. IBM's current behavior is most likely legal under current law. There is generally nothing wrong with unilateral refusals to deal, and I don't see how this situation deserves special treatment.
The problem here is that even though IBM's behavior is almost certainly legal, the DOJ could force IBM to spend a lot of money on essentially frivolous litigation. Anyone who favors the rule of law should be against these tactics. If the Obama administration wants to change the law, they should do it through Congress. The Congressional route is more efficient and fair, and won't punish companies for behavior that is legal under current law.
I don't see why IBM should have to license anything they don't want to, especially if it's someone who is going to try and take business away from them. I wouldn't shoot myself in the foot, why should IBM be forced to?
Just because IBM mainframe/support is expensive doesn't seem like a valid enough reason to whine to the DOJ. The article even says that the original agreement made in the 70s is no longer in effect.
Cloning a mainframe doesn't mean cloning the operating system. Cloning a mac doesn't mean cloning the OS - I can make a workalike mac but apple still wont license me the software. Game machines have built in non portable operating systems. XB360s have operating systems married to their disc drives! In order to clone a game machine I'd have to clone the built in operating system which cannot be done due to copyright restrictions.
What I find interesting is how someone can make a workalike mainframe without violating IBM patents on some CPU/management/I/Oprocessing hardware. AMD and Cyrix have been able to "clone" Intel functionality only because of past agreements and licensing deals and lawsuits.
The Congressional route is more efficient and fair when it isn't full to the rafters with inefficient corporate puppets that IBM can eagerly stuff full of cash to prevent any sort of trouble coming there way.
. Many mainframe customers would like to find cheaper alternatives, but IBM has prevented them from doing so, he said.
"There's a number of things they have done to numerous companies," he said. "In a time of economic troubles, government deficits and corporate problems, there's a lot of customers that [would find] a choice and lower costs really desirable."
Develop a "mainframe" computer - whatever that means these days, create an OS derived from Linux and develop a COBOL compiler and CICS system for it. I'm sure Websphere can be incorporated too.
Exactly, what's the big deal - technically?
Business: IBM's contracts run out, and move in with a cheaper alternative.
It's NOT me! It's the meds! I'm on 1000mg of Fukitol.
Give the hardware away for free with each OS licence sold.
Or in other words, the pricing doesn't change for legitimate customers, but these guys have to eat the cost of a full system plus their own hardware per sale. That'll stop it pretty fast.
Why is this different from Apple not licensing use of it's OS on non-Apple computers?
Wasn't Irix only licensed to run on SGI machines?
HP-UX? Others?
This is not necessarily the case. Although it is correct to say that usually a company is under no "duty" to license out its IP, there are notable exceptions. One being, if a company has licensed its IP openly in the past and made assurances of future RAND licensing and a market/ecosystem has formed around it and then when it reaches a dominant position where the entry barriers are high (i.e. "installed base opportunism") and changes it strategy in order to make exorbitant profits--then antitrust might recognize a duty to deal.
In the mainframe space, IBM was under a consent decree (settlement with government) and government scrutiny until 2001, where it was deemed that due to changes in the IT world - the decree was no longer necessary b/c IBM faced new sources of competition. This competition never materialized--and in fact the few competitors who were in the market exited because they were no longer guaranteed interface specifications and licensing necessary to make compatible machines.
From the customer side, the vast majority of the world's corporate and public sector data is locked-into the mainframe--especially areas that require high-levels of batch processing--financial institutions, airlines, credit card companies, health care, social security administration, etc. It is incredibly hard to "migrate" off of a mainframe--sometimes impossible. This is why IBM can charge so much to legacy users--a gig of RAM on a mainframe costs almost $6,000--a little bit of a markup. In fact, mainframes apparently account for nearly a 1/4 of IBM's nearly $100 million annual revenue. The world is so tied to mainframes behind the scenes--IBM has even said on its own website: "It is no exaggeration to say that, without the Internet, many businesses would suffer but, without the IBM mainframe, the global financial system would collapse."
The companies at which IBM has allegedly taken this action against have all focused on helping customers migrate off the mainframe and allow this data to move to other, less expensive machines. It would definitely make business sense for IBM to do that--however, I also believe it is a likely violation of antitrust law--both here and in Europe.
But if this was Apple vs Palm and iTunes instead of IBM and a mainframe OS, the fanboi's would be saying but Apple developed their software and have the right to deny the use of it to anyone else. Since this is IBM I bet the debate is going the other way... Lets go take a peek....
"GET / HTTP/1.0" 200 51230 "-" "Mozilla/4.0 (compatible; Setec Astronomy)"