In-Depth

PSI Strikes Back Against IBM

PSI strikes back, charging IBM with antitrust violations, unfair competition, and business torts

• By Stephen Swoyer
• 01/30/2007

Things are heating up in IBM Corp.’s patent infringement case against mainframe emulation specialist Platform Solutions Inc. (PSI).

Late last year, Big Blue filed suit against PSI, charging it with breach of contract and patent infringement (see http://www.esj.com/Case_Study/article.aspx?EditorialsID=2327). Last week, PSI struck back, filing a countersuit in which it charged IBM with antitrust violations, unfair competition, and business torts. PSI also denied IBM’s charges.

"PSI believes it has a compelling legal position and that it will prevail in court," said Christian Reilly, PSI’s vice president of product management and marketing, in a statement. "This conflict is really all about the fundamental values of consumer choice and competition benefiting customers throughout the world who use mainframe computers to run and manage mission-critical applications."

PSI resells Itanium-based servers manufactured by Hewlett-Packard Co. (HP)—and badged with HP logos—as its "mainframe" hardware power plants. PSI targets a sub-100 MIPS space which it says is ill-served by IBM’s existing mainframe systems. In addition, and thanks largely to the availability of Intel Corp.’s dual-core Itanium2 chips, PSI now says it can address about 90 percent of mainframe computing requirements.

The prospect of robust competition is just what concerns IBM, PSI officials claim. "IBM’s lawsuit against PSI is part of a concerted effort to eliminate competition for mainframe computers, and its refusal to provide the operating systems needed to run mainframe computers to PSI customers is blatantly anti-competitive," said Reilly. "IBM’s claims also reflect a reversal of its long-standing practice of licensing its intellectual property on reasonable and non-discriminatory terms—a policy that it trumpeted on its Web site until last year."

PSI takes such rhetoric to another level in its legal filing. "IBM has and is engaged in anticompetitive, deceptive and tortious acts intended to eliminate competition and prolong its monopoly in the worldwide market for mainframe computers compatible with IBM applications and software," the filing reads. "For decades, IBM has held a dominant position in the worldwide markets for mainframe computers and operating systems, and continues to have monopoly power in the markets for IBM-compatible mainframes and operating systems."

Big Blue does seem somewhat leery of mainframe emulation. Last year, for example, it killed the idea of high-end (64-bit) emulation, wrangled with PSI, and was at loggerheads with another emulation specialist—Fundamental Software Inc., developer of a z/OS software-emulator called the FLEXible Enterprise Solution (FLEX-ES).

What is Big Blue’s beef with emulation? Gordon Haff, a senior analyst with consultancy Illuminata, cites a one reason why IBM is so cool to the idea of affordable mainframe emulation: such solutions also eat into Big Blue’s own hardware sales. "Obviously, anyone who buys one of these [emulation systems] isn’t going to buy an equivalent, if pricier, IBM mainframe," Haff said in an interview late last year.

On the other hand, mainframe boosters have long complained about the lack of scalable and affordable mainframe hardware.

"I'm … concerned about the lapsing of the agreement with Fundamental Software and the FLEX-ES platform licensing. Although it's rumored that IBM will have a small system for its PWD developers in the future, those same rumors say that it is not near," said Ray Mullins, a mainframe technologist with a Big Iron ISV that he asked not be named. "IBM is making it damn near impossible for a small, independent developer without much cash to work on creating products for [an] operating systems that [doesn’t] have Linux in its name."

Stephen Frazier, a mainframe pro with a state government agency based in the Southwest, agrees. "IBM's refusal to allow 64-bit systems to run on commercial FLEX-ES machines is one of the worst and most short-sighted decisions in IBM's history," he contends. "This means that small businesses will never be able to use mainframes. As small businesses grow into large businesses, they will not be IBM mainframe customers. IBM's moves in 2006—if not reversed—will lead to the destruction of the company."