Mainframe Emulation Specialist Target of IBM Lawsuit
IBM charges PSI with breach of contract and patent infringement
IBM last month filed suit against mainframe emulation specialist Platform Solutions Inc., charging PSI with breach of contract and patent infringement.
The suit, filed in late November, is the second prominent case in which Big Blue has pursued intellectual property litigation against a third party. In October, IBM sued Amazon.com, charging that the e-tail giant’s online sales features infringe on several of its own patents.
The PSI case is interesting for several reasons. PSI resells Itanium-based servers manufactured by Hewlett-Packard Co. (HP)—and festooned with HP logos—as its “mainframe” hardware power plants. That alone is enough to raise Big Blue’s hackles, but it’s far from an unprecedented case in the mainframe emulation space. Fundamental Software Inc., which markets a z/OS software-emulator called the FLEXible Enterprise Solution (FLEX-ES), once resold FLEX-ES on Dell and Compaq hardware before switching over to IBM’s own xSeries systems.
PSI also 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 company contends that it isn’t feeding off IBM in this space, either. As veteran mainframe watcher Phil Payne, a principal with UK consultancy Isham Research, has noted in his own writings, Big Blue has actively marketed mainframe hardware to the sub-100 MIPS market for some time now, explicitly targeting the midrange market with its z890 and new z9 Business Class (BC) mainframe systems.
There are other complications. For example, Payne writes, even though Fundamental Software did partner with vendors which resold Dell and Compaq systems, it also developed its own channel adapters, along with other proprietary complements for FLEX-ES. The implication, Payne notes, is that stock Itanium2 systems could run PSI’s emulation software, too. One upshot of this is, as Payne puts it, is that “[m]ainframe emulation shipped on a DVD.”
IBM’s filing doesn’t explicitly address any of these issues. Instead, Big Blue charges PSI with breach of contract and patent infringement.
“IBM has invested substantial amounts of time, effort, know-how, creativity, and money to develop its computer systems,” the filing reads. “As a result of IBM’s investment, IBM’s computer systems and programs provide unparalleled performance, reliability, availability, serviceability, and security and have been widely accepted for use by customers in environments where accuracy, data integrity, and reliability are critically important.”
Tarnishing IBM’s Image
That’s the rub, according to IBM, which says PSI’s mainframe emulators dilute or even tarnish its zSeries brand image.
“PSI seeks to usurp the value of IBM’s investment,” the complaint reads. “PSI has developed and is bringing to market and offering for sale computer systems … seek to imitate IBM’s computers and that PSI claims will run IBM’s copyrighted operating systems and other software programs on computers other than the ones for which the IBM software was written.”
PSI does this, IBM contends by promising customers that they can run z/OS and z/OS applications on hardware other than that for which they were specifically designed. Moreover, IBM says, PSI promises that customers who purchase its emulator systems (i.e., servers and emulation hardware) can license z/OS and other mainframe software from IBM.
“In developing, operating, and promoting its emulator systems, PSI has breached the contracts under which IBM has licensed PSI to use IBM software,” the complaint reads. “PSI has obtained licenses to use IBM software pursuant to an [IBM Customer Agreement] that expressly prohibits, among other things, translation of the licensed software programs.” By emulating—translating—IBM’s software such that it can run on IA-64, IBM charges, PSI is violating the terms of its ICA. Big Blue is seeking associated damages, as well as a declaration that it’s authorized to terminate PSI’s software licenses.
PSI was founded seven years ago by a group of former Amdahl executives. The company’s vice-president and general counsel, Greg Handschuh, is also an Amdahl veteran. (He was Amdahl’s corporate counsel, too.) In this respect, Isham Research’s Payne has noted, Handschuh is well-versed in dealing with IBM on the intellectual property front.
One strategy PSI appears to have considered is an antitrust case against IBM; Big Blue’s filing specifically seeks a declaration that its refusal to license its patents to PSI does not violate antitrust laws. “IBM has declined to grant the requested licenses because, among other reasons, PSI is infringing IBM’s patents,” the complaint alleges.
Representatives from PSI did not immediately respond to a request for comment. IBM declined to comment for the record.
A Double-Edged Sword?
The suit is, potentially, a double-edged sword for IBM. After all, mainframe boosters have long complained about the lack of affordable mainframe hardware, especially for novices, trainees, and ongoing educational purposes. While PSI’s Itanium2-powered mainframe emulators certainly aren’t cheap—nor are they as inexpensive as commodity (x86) server hardware—they still cost less than IBM’s offerings. This is a sensitive issue for IBM, but Gordon Haff, a senior analyst with consultancy Illuminata, says that’s not really what this case is about. Nor, for that matter, does Haff buy Big Blue’s argument that PSI’s emulation systems tarnish its zSeries brand image.
“These types of solutions have been around for a while, in various forms—things that let you run CICS applications and Unix—and there’s been a lot of this [mainframe emulation] around for a long time,” Haff argues. “I don’t know why IBM chose to file a suit in this particular case, but it really is incredible that suddenly IBM is worried about its reputation being besmirched by this one particular mainframe emulation vendor.”
More likely, Haff says, IBM is worried about PSI eating into its hardware sales. This doesn’t necessarily mean that PSI’s mainframe emulation systems are more credible—in other words, scalable, reliable, and available—than other emulation competitors, however.
“Maybe IBM believes there is some infringement here which other examples simply did not have,” he speculates. “IBM does defend its IP quite aggressively and when it does, it’s for what it believes to be fairly solid reasons. You don’t have frivolous or capricious filings from IBM.”