The European Commission today announced the launch of two formal investigations into IBM's practices in the mainframe business, following complaints lodged by T3 Technologies last year and French open source startup TurboHercules in March.
By coincidence, this announcement was made just a few days after IBM launched its new generation of mainframe computers, an event that shows mainframes are still big business and far from obsolescence. There are estimates that the mainframe business (including software) generates about half of IBM's corporate-wide profits. The mainframe software market has an estimated size of $25 billion, about twice the size of the software market for Linux.
The Commission appears concerned about the tying of IBM's mainframe hardware products to its dominant mainframe operating system, z/OS. This is reminiscent of the Commission's previous objection to the tying of the Media Player to the Microsoft Windows operating system and the "browser case" that was settled last year and resulted in a browser choice dialog box for Windows.
In early April, I published a threat letter with which IBM tried to intimidate French open source startup TurboHercules SAS, whose founder started the Hercules open source mainframe emulator in 1999, with 106 patents and 67 patent applications. If you're interested in the correspondence between TurboHercules and IBM -- two letters from each company --, please look up this page.
There is a possibility of the Commission also formally investigating the complaint brought forward by NEON Enterprise Software, on which I reported here. The other complaints were filed earlier, and there's always some back-and-forth correspondence between a complainant and a defendant after a complaint. That process must still be going on with respect to NEON's very recent complaint, but I wouldn't be surprised if in a few months the Commission also picked up that case. Then there would be three parallel EU cases related to IBM's mainframe practices in light of the suspected abuse of IBM's dominant market position (a de facto monopoly, actually).
Moreover, the US Department of Justice announced in October that it investigated IBM's mainframe practices. Since then, there hasn't been any further announcement by the DoJ. It will be interesting to see if the DoJ makes a further announcement in the weeks or months ahead.
The open source aspect of the TurboHercules complaint and IBM's use of patents are the reasons for which I recently learned a lot about the situation in the mainframe market. I'm convinced that customers are locked in and milked shamelessly by IBM, and I hope that the outcome of the process will result in more customer choice, including the possibility to use the Hercules open source emulator to run legacy mainframe applications on affordable Intel-based servers.
For some time, IBM has been lobbying the EU as a self-proclaimed advocate of open source and open standards. I can't see how this antitrust probe will enhance IBM's credibility in that context.
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