LinuxGram

TurboHercules SAS, the Paris-based concern started last year to commercialize the 10-year-old open source Hercules mainframe project, filed a formal antitrust complaint against IBM with the European Commission Tuesday.

The little company says IBM is blocking it from selling its open source solutions.

Its software, which reinterprets or emulates the mainframe hardware architecture, makes it possible for mainframe applications to run on non-IBM operating systems such as the Mac OS, Windows and Linux on x86 and x64 hardware, a lot cheaper proposition for mainframe users and in some cases reportedly more performant.

TurboHercules is charging IBM with abusing its market dominance by refusing to let its mainframe customers run z/OS on anything other than IBM mainframe hardware. It says this is tying, a mortal sin for a dominant vendor.

It also charges IBM with recently introducing undocumented software interfaces and protocols to lock out competitors and prevent the open source project from maintaining full compatibility.

It says both these practices were outlawed by the undertaking IBM gave to the EC back in 1984 to resolve the EC’s antitrust finding against the company and by the EC’s 2004 decision against Microsoft upheld on appeal by the Court of First Instance – a decision IBM encouraged, one might add.

TurboHercules wants the EC, known for having an open source protectionist streak – look at how it almost blocked Oracle’s acquisition of Sun over MySQL – to make IBM stop tying and open up its interfaces and protocols like they used to be back before 2002 when IBM introduced z/OS.

The start-up also wants IBM ordered to license it what it needs to compete on fair, reasonable and non-discriminatory terms. It’s not asking for any freebies, simply a fair shake.

Roger Bowler, the mainframe maven who started the Hercules project in 1999, says that when he started TurboHercules last year, he asked IBM to license z/OS to customers for use with Hercules at prices and on conditions set by IBM provided they were fair and reasonable.

That was last July. It took IBM four months to answer. In November IBM’s mainframe CTO Mark Anzani rejected the request and accused Hercules of infringing IBM’s intellectual property.

Anzani is quoted as saying that Hercules open source emulator “requires IBM intellectual property and you will understand that IBM could not reasonably be asked to consider licensing its operating system for use on infringing platforms.”

Bowler says in a blog dated Tuesday that “We wrote back immediately to Mr. Anzani to express our surprise that, after 10 years during which Hercules has acquired thousands of users around the world, including many within the ranks of IBM itself, IBM has now suddenly discovered that we are violating its intellectual property. In our reply we asked that IBM identify the specific property we allegedly violated in order that we could investigate that claim. In the unlikely event that IBM’s assertions were found to have merit, we asked further that IBM consider adding such intellectual property to their much-publicized and deservedly admired ‘non-assertion’ pledge to the open source community – the ‘IBM Statement of Non-Assertion of Named Patents Against OSS’ published at www.ibm.com/ibm/licensing/patents/pledgedpatents.pdf.”

Bowler is still waiting for IBM to tell him what IP Hercules is supposed to infringe, which is why he says TurboHercules has complained to the EC.

Once IBM asserted infringement and wouldn’t identify it, he says, “We then realized that our only hope as a small company was to file a complaint with the European Commission.”

So let me get this. IBM, the open source hero, is doing exactly what SCO was pilloried by the open source community for doing when it wouldn’t say – because of its lawsuit against IBM – what lines of Linux code were supposedly stolen from Unix. Does that mean that the open source community is now going to tar and feather IBM and ride it out of town on a rail à la SCO?

And the complaint that IBM shows no reluctance in using its patents as an offensive anticompetitive weapon – instead of using patents to ensure compensation when other people use its inventions – should scare the bejaysus out of everybody since IBM owns patents on just about everything. According to TurboHercules, IBM is simply saying that we own the patents and you can’t compete with us under any circumstances. Goodness gracious, whatever happened to fostering innovation around inventions?

Like MySQL, Hercules was developed in Europe and has been maintained by global volunteer community for the last 10 years. It is said to be used by 5,000-10,000 users worldwide.

The Computer & Communications Industry Association (CCIA), whose similar complaint to the US Justice Department kicked off an on-going investigation, says TurboHercules’ anticompetitive complaint resembles its own and other complaints made to the EC the last couple of years. It claims it shows a “systemic pattern of behavior by IBM directed at anyone who threatens its mainframe monopoly.”

CCIA CEO Ed Black also claims that “IBM is speaking out of both sides of its mouth when it comes to its support of the open source community and its commitment to the responsible use of its patent portfolio. The fact that IBM would actually assert that an open source project infringes its patents is proof that IBM’s support of open source stops the minute it threatens IBM’s lucrative mainframe monopolies.”

CCIA is supported by IBM foes like Microsoft.

Steven Friedman, president of T3T, which filed one of the other complaints CCIA is talking about last year, said, “I’m obviously very happy to see a formal complaint from another company that, like T3, is seeking to restore competition to the mainframe market. In reading today’s press, TurboHercles seems to have suffered from the same IBM anticompetitive tying of hardware and software conduct as T3. Further, TurboHercules seems to support everything T3 said in our complaint.”

In its complaint TurboHercules positions IBM as “super-dominant” under EU law because it holds 100% of both the mainframe operating systems market for running so-called legacy workloads and the mainframe hardware market for running these same legacy workloads.

When it suits it, IBM likes to dilute the market and lump mainframes in with other servers to make its share seem smaller but, as TurboHercules told the EC, no other system can claim to hold 80% of the world’s data or represent an investment worth $5 trillion by its users or have a lock on 200 billion lines of code.

IBM wants to be HP.

Well, it wants first in x86 server revenue, a slot HP currently occupies. IBM is third. So Blue has taken a whack at “rewriting the economics of industry standard computing” by redesigning the PC server to take the PC out of it and put the enterprise in it.

It’s been three years engineering the latest generation of its so-called mainframe-borrowing X-Architecture and ahead of Intel trotting out its high-end eight-core Nehalem EX Xeon chips later this month IBM unveiled its Nehalem EX-based x86 servers at CeBit in Germany this week.

They’re designated eX5 and are supposed to offer “dramatically more scalable, workload-tuned computing on the x86 platform.”

Think of them as sort of a soup kitchen for poor memory-starved applications in virtual environments.

IBM has decoupled the memory from the processors, breaking the traditional PC architecture so the boxes can be loaded up with 600% more memory than everybody else. And it’s invented a chip that lets the eX5’s processors access the extended memory very quickly.

Users will be able to add up to 32 DIMMs.

It pitches the solution as a cure for server sprawl with its attendant power and management costs. Users won’t have to buy extra servers for memory-intensive workloads and in the process they might save themselves some of the license fees they pay to VMware by putting a lot more virtual machines on a chip – figure half the servers and half the licensing cost, IBM says, or 82% more virtual servers for the licensing costs – not to mention reduced middleware and application expenses. Clients running a Microsoft database should be able to cut their license costs by 50%.

On the other hand users should be able to virtualize 80% of their data centers by fixing the limiting memory issue.

IBM’s boxes also have new flash storage, which together with the increased RAM should produce 30 time better database performance and 99% better performance-per-watt and cut storage cost by 97%.

Forrester analyst James Staten calls it a “direct response to Oracle’s Exadata database appliance, but the IBM approach is more widely applicable.”

IBM has also invested the boxes with what it calls FlexNode widgetry that physically partitions a system into two and back again so it can be used for infrastructure applications by day and larger batch jobs at night. It borrowed the device from its Power systems.

IBM plans on releasing three eX5 models this year: a four-processor System x3850 X5, a BladeCenter HX5 and an entry-level enterprise-class two-processor System x3690 X5. It will be the first time IBM has used its X-Architecture widgetry in a blade. No pricing yet.

Neon Enterprise Software sued IBM Monday morning in federal court in the Western District of Texas claiming Big Blue is out “to crush” it and prevent mainframe customers from saving hundreds of millions of dollars.

Neon’s the Texas outfit with the newfangled mainframe widgetry called zPrime that, if unfettered, could supposedly drain IBM’s prized mainframe revenue stream.

It reportedly can, in some cases, save mainframe customers 90% of their onerous software licensing fees. One potential customer reckoned zPrime could save it $100 million over two years.

See, Neon can move legacy workloads onto the zAAP and zIIP specialty processors (SPs) that IBM uses to run XML and Java programs and accelerate DB2 apps on its big iron. There are no monthly software licensing fees associated with the widgets – even though they’re no different from the mainframe’s central processors (CPs) that run legacy workloads – and that’s so mainframe users won’t drift off and start running the more modern Java and SOA workloads on commodity boxes.

IBM doesn’t want zPrime anywhere near its mainframes and, according to the suit, has run off potential Neon customers such as Wells Fargo, the big financial house, and Highmark, the insurance company, by claiming that their contracts forbid them to use the SPs for legacy workloads.

“In case after case,” the suit alleges, “as IBM became aware that a given customer had tested and was prepared to acquire zPrime, IBM made clear that such a decision by the customer would result in prospective and severe discipline from IBM.”

Neon says IBM has threatened to sue customers for using zPrime and to “extract from future negotiations any revenue lost via a customer’s use of zPrime.”

Neon apparently had more than 50 potential customers to start with and claims it was forced to sell zPrime for less than it would have fetched to those companies that IBM didn’t have a completely “chilling effect” on. It told the court it expects to lose more sales and margin if IBM isn’t stopped.

Both Neon and large mainframe users have reportedly combed through their contracts and IBM’s collateral material in vain searching for the alleged prohibition. Neon says it has also repeatedly asked IBM for the citation and IBM hasn’t produced it.

Neon’s lawyer, Chris Reynolds of Reynolds, Frizzell, Black, Doyle, Allen & Oldham in Houston, reasons that if the language exists – as it does for the specialty processor used to run Linux on mainframes – the guys running IBM’s mainframe unit would have stuck the passage under the nose of every mainframe user on the face of the earth and made them read it back to them after zPrime came out in June.

Instead Reynolds found IBM telling IT Jungle in 2006 when the zIIP processor came out that its interfaces were “open, and other vendors are open to leverage it….We want to make it accessible, since this can only help encourage more workloads to move to the mainframe.”

Therefore he figures no restrictions exist, IBM is bluffing and Neon is perfectly within its rights. And he has asked the court for a declaratory judgment saying so.

Furthermore Neon is charging Blue with tortious interference, business disparagement and unfair competition under California law, which is stricter than most. It’s asking that IBM be forced to disgorge any profits made at Neon’s expense under the Lanham Act, which basically says that if IBM is found to have caused Neon to, say, lose a $2 million sale to protect $20 million in revenues, well, it could kiss that $20 mil good-bye.

Neon also wants IBM enjoined from bad mouthing it and zPrime any more as well as actual damages, punitive damages, pre- and post-judgment interest and attorneys’ fee.

Neon, which is backed by BMC co-founder John Moores, has reserved the right to sue IBM for antitrust violations, figuring it could make a dandy case of monopoly maintenance and tying.

Of course the Justice Department is a couple of months into an antitrust investigation of IBM’s behavior in the mainframe market since it got out from under its 1956 consent decree in 2002 so Neon may not have to.

On the other hand, if IBM produces a contract that restricts its mainframe users from using competitive software on those SPs, Neon could hit IBM with charges of foreclosing competition under the Clayton Antitrust Act, which outlaws conditioning a sale on the buyer not using rival products.

Evidently counselor Reynolds figures he’s got IBM boxed in.

And IBM may not have helped its defense in issuing the statement it did in response to the suit.

It said Neon’s claims “have no merit, and its product offers no innovation. Neon’s software deliberately subverts the way IBM mainframe computers process data. This is akin to a homeowner tampering with his electrical meter to save money. IBM has invested billions of dollars in the mainframe this decade and we will vigorously protect our investment.”

Perhaps IBM hadn’t gotten to the part of the suit where it’s accused of disparagement because it certainly just called Neon a thief.

Neon’s suit says IBM has told customers that zPrime is an “unlawful ‘circumvention’ technology” and has conditioned the sale of new SPs on the customer pledging not to use it.

IBM has 60 days to answer the suit and Reynolds fully expects IBM to countersue in return and probably ask that the charges be dropped and the venue switched to New York, where it lives. The parties might get in to see the judge about scheduling a jury trial in February or March, he said.

The suit’s at www.neon.com/doc/misc/lawsuit.pdf.

by Maureen O’Gara

IBM System z CTO and resident spook Mark Anzani recently sent an IBM mainframe customer a letter meant to scare it into seeing the boogeyman under its bed and make sure it doesn’t use Neon Enterprise Software’s zPrime technology to reduce its mainframe costs.

The customer wants to buy IBM’s Specialty Engines for its mainframes, the so-called zIIP and zAAP processors that IBM created to accelerate and run DB2 and Java on. IBM doesn’t want to fill the order unless the customer promises in writing not to use the chips to run the workloads that the zPrime software can offload to the things. It will save the customer millions of dollars in CP cycles and IBM doesn’t like that.

Neon claims zPrime can offload more than half a mainframe’s workloads to the specialty processors, including IMB, DB2, CICS, TSO/ISPF and batch workloads, cutting 20% of a user’s annual hardware and software costs under conventional use pricing because the chips incur no usage charges. The savings would extend to third-party software.

The letter, which is here and isn’t very long, says:

“As we have reason to be concerned you intend to utilize Specialty Engines to process unauthorized workload (workload beyond that for which the Specialty Engine was created and marketed by IBM), which would constitute a breach of the license, we will fulfill the specialty engines per your order only if you provide reasonable assurances you will comply with our agreements. Please confirm that you will operate these engines in compliance with your existing agreements with IBM, and specifically including that you will not run any workload on these specialty engines other than those workloads expressly designated by IBM as eligible and authorized to run on these processors.”

The customer forwarded the letter to Neon, which only released zPrime on June 30.

Neon CEO Lacy Edwards had heard that IBM was asking users verbally for such an undertaking but this was the first time he had seen it written down.

He said it means that IBM wants to close the glaring loophole that it left opened, and that Neon is exploiting, by changing the terms of the existing contract its customers signed after the fact.

As mainframe users know, this is not the first time that IBM has changed hallowed terms and conditions to ensure its mainframe cash flow.

Since ending its undertaking with the European Commission and consent decree with the Justice Department a decade ago, IBM has forced users to upgrade to its newer mainframe operating systems; ceased maintaining anything but 64-bit hardware; stopped providing the critical interface information it used to supply to plug-compatible manufacturers (PCMs); and has in general erected insurmountable barriers for anyone to enter the IBM-compatible mainframe market.

For instance, when a start-up called Platform Solutions Inc (PSI) threatened to take away some of IBM’s mainframe business with its Amdahl-derived, z/OS-running Itanium system, IBM changed its sacred, long-standing RAND patent policy and dropped the words “or equivalent” from its z/OS license so the operating system could only run on its proprietary System z machines.

But getting back to the problem at hand, Anzani’s latest letter pointed the customer to a posted copy of the IBM License Agreement for Machine Code that he said governs the use of Specialty Engines and two product announcements letters also on IBM’s web site that he said summarize the eligible workloads.

Lawyers for both Neon and the mainframe customer reviewed Anzani’s letter, the IBM License Agreement for Machine Code and the product announcements and concluded that IBM’s bluffing.

There’s nothing in any of the documents quoted by the IBM CTO that restricts what a user can run on the specialty processors. The IBM license, the lawyers told Edwards, has no bearing on Neon; zPrime isn’t in violation.

The lawyers are so certain of their position that one of them reportedly told the mainframe customer it might as well go ahead and give IBM the assurances it wants because it won’t impact its use of zPrime. It can keep on using it.

The customer reportedly isn’t going to do that however. Instead it’s planning on having a showdown with IBM and going belly-to-belly with the titan. What will happen is anybody’s guess. There’s a big gap between saying you’re not scared of IBM and spitting in its Big Blue eye.

IBM’s an old hand at the art of intimidation. A generation ago ex-IBMer Gene Amdahl, who dared to go into competition with IBM with his own mainframe company, coined the term “FUD” to describe the fear, uncertainty and doubt that IBM used to dominate the industry. Thirty-five years later and nothing much has changed.

Neon users to a man are currently afraid to admit publicly that they have zPrime in their shop for fear of the repercussions such a confession could have even if they know that stripping away the veil of secrecy will lessen IBM’s hold over them.

Gen Xs and Ys, most of whom don’t know what real fear is, have flipply applied the term to Microsoft. Microsoft never made grown men afraid the way IBM has.

IBM has sent the first monthly bills to customers that are in production with zPrime and they’re a lot lower than they used to be. Edwards has had reports that IBM is now demanding to do audits and suspending annual Enterprise License Agreement (ELA) negotiations. It’s threatening, he said, to send bills that cover its shortfall and customers are reportedly telling IBM it has no right to do that.

On July 10, a few days after Neon went to market, Anzani wrote a letter to all mainframe customers suggesting zPrime wasn’t legal and warning them “regarding any claimed ability to reduce IBM Program license charges by off-loading workloads to Specialty Engines beyond the eligible workload identified by IBM. IBM’s applicable pricing terms governing Eligible Workloads on zIIPs and zAAPs will not apply to zIIPs and zAAPs running anything other than IBM-specified eligible workloads. Therefore, customers should not anticipate any reduction (and may actually experience an increase) in the IBM Program License Charges associated with non-Eligible Workloads which may be off-loaded to IBM Specialty Engines, since the non-Eligible Workload running will cause the software running on the Specialty Engine to be chargeable. IBM cannot comment on the potential impact on the software charges from other third-party software providers.” (See here  for the whole letter.)

What’s really odd about this situation is IBM’s brass in the face of a fresh antitrust investigation by the Justice Department, since it seems what it’s doing is a clear case of abusing its monopoly, price gouging and requiring customers of its operating system to use only IBM hardware, a serious antitrust no-no and something IBM is specifically forbidden to do under the lingering terms of its now-dissolved 1956 consent decree with the United States government.

IBM’s actions are reminiscent of behavior that has landed other tech giants in antitrust hot water.

Intel just paid AMD $1.25 billion so it wouldn’t have to face the threat of treble damages in the antitrust suit that AMD brought against it – and that was after getting hit with a $1.45 billion antitrust fine from the European Commission. It still may have to face action by the US Federal Trade Commission, the sister agency to the Justice Department’s Antitrust Division.

And one can argue that Microsoft incurred the wrath of the European Commission for less and paid handsomely for it.

Ironically, IBM demanded Microsoft provide reasonable and non-discriminatory interoperability access to its technology but won’t do that itself.

Edwards says IBM’s schoolyard bullying merely compensates Blue for its own deep-seated insecurity and that zPrime has got IBM spooked. Since IBM can’t hit Neon with the patent claims it made against PSI before IBM buried the upstart by buying it, zPrime is the mainframe establishment’s best chance at changing its future, he contends.

IBM’s posturing didn’t stop Neon from upgrading zPrime a few days ago.

Version 1.2 is supposed to simplify and streamline the offloading of programs and applications to specialty processors, while providing greater control in selecting which application workloads are shifted to the things.

Neon says a new Enablement Console lets users select the applications and programs they want to move for processing on zIIPs and zAAPs during the critical and costly peak periods.

And a Language Environment (LE) Initialization Exit automatically enables all LE-compliant applications, which means almost all the legacy mainframe applications around.

Richard Ptak, principal analyst at Ptak, Noel and Associates, says using zPrime doesn’t sacrifice functionality or disrupt mainframe environments in any way,

Neon currently claims 14 companies are now in production with zPrime and that since the software was announced nearly 50 organizations around the world – including some of the world’s largest corporations – have tested, documented and validated its cost savings.

On average, it says, these companies have been able to offload 90% of their Information Management System (IMS) application processing; 90% of their batch application processing; 80% of their DB2 application processing; 75 % of their TSO/ISPF application processing; and 45% of their Customer Information Control System (CICS) applications.

Edwards says, “This incredibly rapid adoption reflects how much companies – and how many of them – want to reduce the high costs of mainframe computing.”

This piece appeared first on OpenMainframe.org.