IBM on antitrust defense in Europe

IBM on antitrust defense in Europe

Summary: By tying use of its mainframe software to IBM hardware, TurboHercules charges, IBM is preventing open source from competing.

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Before there was a Microsoft, when Bill Gates was still in swaddling clothes, IBM was in the antitrust crosshairs.

Its 1956 consent decree aimed to keep IBM from controlling its whole ecosystem. It created markets for used machines and services IBM had been keeping down. The decree remained in force until 1996.

The aim of that decree, and of the Microsoft consent decree, signed in 1994, is to keep effective monopolies from being extended by tying them to other goods and services through contracts. Such deals are at the heart of U.S. antitrust law regarding technology, where change is constant and borders are constantly shifting.

IBM still dominates in the "big iron" sphere formerly called mainframes, and now it's on the defense in Europe, where a French company now charges IBM is preventing people from running its open source mainframe emulator.

TurboHercules thinks of itself as being in the mainframe disaster recovery business, not the mainframe business. Its Hercules is a software layer that sits between the mainframe software and a commercial system like Linux or Windows, and has been around for 10 years.

By tying use of its mainframe software to IBM hardware, TurboHercules charges, IBM is preventing open source from competing. The company's complaint said it tried to do business with IBM last year, but was met by an intellectual property complaint.

The U.S. Justice Department has been investigating IBM's mainframe business since last year, but given the EU's recent $1.45 billion fine against Intel, its antitrust regulators are now feared more than their U.S. counterparts.

This case may go deeper, however. IBM has become recognized as an open source leader. You can argue that open source saved IBM, allowing it to unify product lines under Linux, offload development costs, and create new alliances.

I think of IBM's mainframe business the way I would think of a newspaper chain tied to a larger media conglomerate. The newspaper business is dying and thus milked ruthlessly for profits, which are invested in areas with faster growth.

IBM has a lot to lose if it can't maintain that cash cow. But it also has a lot of credibility in open source, credibility that could dribble away if this case goes on or expands.

So is IBM a friend or foe of open source? [poll=115]

Topics: Open Source, Enterprise Software, Hardware, IBM, Security, Servers

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22 comments
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  • When it comes to hardware, open source looks like leaches

    That's always been the problem with open source. It's fine and dandy for programmers to work for free (if they want), but they always need access to hardware.

    Why don't they just make an open source mainframe? Why? Because the open source model doesn't work for tangible products; you can't build a product for free.
    croberts
    • And your point is what?

      HW is HW, SW is SW. The two are totally independent. If I buy the HW I will run on it whatever I choose, open source or not.
      Economister
      • Nope, you cant run whatever you want.

        You can run only the software that were built for that HW.
        --Ram--
        Ram U
        • I think you missed my point entirely

          "whatever I choose" does not include stupid or otherwise incompatible choices.
          Economister
        • IBM isn't letting people run software made for their HW.

          [b] [/b]
          AzuMao
    • Following your logic, anyone who makes any software is a leach. Even closed

      source products like Windows. They rely on hardware too, genius.
      AzuMao
    • RE: IBM on antitrust defense in Europe

      The newspaper business is dying and thus milked ruthlessly for profits, which are invested in areas with faster growth.<a href="http://ipadbagblog.com/"><font color="LightGrey"> k</font></a>
      zakkiromi
  • IBM is a friend of IBM

    It uses open source when it is in its own best interest (ie shareholders) to do so. Therefore it is neither a friend nor a foe.
    Economister
    • True dat [nt]

      nt
      bmonster
    • Agreed

      I would have at least a 3rd option on the poll for user (or power user for the size and scope of IBM)
      Boot_Agnostic
    • If its best interests involve..

      ..[i]actively[/i] impeding open source development, I think it's safe to call it an enemy.
      AzuMao
      • Nope

        Firstly, "if" does not establish a prima facie case. Even if they at times do, they may support OSS in other circumstances, which would make them a friend also. Therefore, I stand by my first post. They do what is best for IBM, end of story.
        Economister
        • When two parties have mutually exclusive interests..

          ..and one of them seeks what's best for itself, it's not an enemy of the other?
          AzuMao
  • RE: IBM on antitrust defense in Europe

    A friend!
    shelton.do
  • RE: IBM on antitrust defense in Europe

    IBM is a friend of open source.
    James Keller
  • RE: IBM on antitrust defense in Europe

    IBM have said "TurboHercules is an 'emulation' company that seeks a free ride on IBM's massive investments in the mainframe by marketing systems that attempt to mimic the functionality of IBM mainframes,"
    Gee I wonder if it thinks Linux is a knock off of UNIX?? Free ride on all that AT&T Bell Labs investment.
    dpcmiller@...
    • That's what confuses me

      I'd like IBM to tell us how much they've invested in mainframe development over the last, say, decade.
      DanaBlankenhorn
      • And what would you find acceptable in IBM's defense?

        2006 - how to divide a $5 billion to $6 billion yearly research budget across hardware, software and--increasingly--services.
        http://news.cnet.com/IBMs-research-juggling-act/2008-1011_3-6045459.html


        2007 - The firm spent $6.2 bn in 2007
        http://www.livemint.com/articles/2008/07/17222926/IBM-attributes-17-stock-gain.html


        The projects: inventing a successor to today's semiconductor, designing computers that process data much more efficiently, using math to solve complex business problems, and building massive clusters of computers that operate like a single machine?an approach called "cloud" computing. Central to the effort will be even more emphasis on basic scientific research, such as physics, chemistry, and math.
        http://www.businessweek.com/magazine/content/08_10/b4074063309405.htm


        So, looking at what numbers I could find in that search. The research budget has been in the billions. 5 to 6 billion is what I see for 2006/2007? Considering that

        Ok, from what I see above. How about we use the low number as a starting point. 5 billion in R&R.

        I haven't been able to find a percentae break down, so I'm going to do a calc to get it? Ok?
        What percent of total sales is hardware(servers) for IBM for 2009?
        http://www.forbes.com/2009/04/16/ibm-earnings-computers-technology-enterprise-tech-ibm.html
        22.6 billion in revenue.
        'but she expects revenues from IBM's hardware business--which typically represents around a fifth'

        So a 5th of 22 billion dollars is revenue from hardware.


        5 billion as a research number, 1/5 of that being a reasonable number to determine what is directed at hardware. 20 percent of 5 billion dollars is a billion dollars.

        I would consider that a heavy investment wouldn't you?

        2010/03/24 14:52EST Edit:
        That is a one year number I worked up. You may feel its high, I don't to be truthful. But even if that was a 10 year investment with that type of R&R budget, that's still a lot.
        DanLM
  • Apple and OS X

    So, what is the difference between IBM saying customers are only authorized to run IBM software on IBM hardware and Apple saying customers are only authorized to run OS X on Apple hardware?

    IBM is know for buggy non-standard software. (Remember PC-DOS a/k/a MS-DOS 4 and how most other software vendors said they would not support their product on DOS 4 because it was so buggy?) The problem would be a lot worse if IBM had to contend with its software being run on all kinds of hardware, just like Microsoft has to contend with.
    Rick_R
    • Because Apple = rainbow = gay. IBM is blue, and everyone loves blue.

      [b] [/b]
      AzuMao