Global CIO: As IBM Preps For Justice's Probe, Who Started This Nonsense? - InformationWeek

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IoT
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Government // Mobile & Wireless
Commentary
10/13/2009
05:27 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: As IBM Preps For Justice's Probe, Who Started This Nonsense?

The bureaucrats at the Justice Dept., the European Commission, and a trade group called CCIA are looking to take from IBM what their supposed "victim" could not earn in the free market.

"Our goal was to educate the DOJ about why we think there's a monopoly maintenance case," and "Our hope was they would open an investigation."

So it seemed reasonable to look into the CCIA to try to determine its motives. And it turns out that the lofty-sounding "Computer and Communications Industry Association" has a total of 22 members. Hey, nothing wrong with that--but across two enormous global industries comprised of many many thousands of companies, a membership of 22 does not exactly a mandate make.

Therefore the CCIA's interests in this case are narrow--and again, there's nothing wrong with that. But I suspect most people hear "Computer and Communications Industry Association" and think it's the voice of those two massive industries, when it very clearly is not. So it's important to understand CCIA's narrow perspective and interests for its 22 members, and its even more important to see who those 22 companies are.

I've broken them up into three groups based on my sense of whether they'd want to harrass IBM over mainframes, and I've come up with a total of five companies that might want to pursue such a dream:

  • Consumer-focused (3): eBay, Yahoo, and T-Mobile
  • Likely axe-grinders (5): Microsoft, Oracle, Fujitsu, Google, and T3 Technologies
  • Hard to tell (14): Linux Foundation, Red Hat, Open Connect, Intuit, Data Foundry, Integra, TurboHercules, ViOn, NetAccess Systems Technologies, Seeqpod, Aventure, CAI Sisco, Cascode, and AMD

In the spirit of this bizarre tale of innovators and ankle-biters, I have to share this richly telling comment made by T3 president Steven Friedman in an interview for the businessmonitor.com article noted above--he couldn't possibly have realized just how revealing his remark would prove to be:

"For decades IBM licensed its operating system to all comers. In 2006, IBM said they would license their operating system only on their hardware platform. Without that software, the hardware we sold was no better than a piece of furniture."

Exactly! And that's the whole point, isn't it? T3 wants to do the easy part of building the hardware while fully expecting--in fact, demanding--that IBM just hand over its vastly more complex and valuable software so as to make T3's hardware more useful than a chair or couch. And because IBM doesn't want to undercut its own success by giving away all that highly valuable IP to companies like T3 that want to use IBM's multibillion-dollar investments to turn their chairs into richly functional high-end systems, CCIA is looking to achieve through government fiat with T3 could not achieve in the free market.

That exploitation is what the 22-member CCIA is advocating. That's the fool's errand on which Justice is willing to squander many millions of taxpayer dollars and many more millions of IBM shareholders' profits. And that's the latest type of parity-seeking industrial policy the European Commission is trying to foist on the U.S. economy, in much the same way that its foot-dragging in reviewing the Oracle-Sun merger is costing Sun tens of million of dollars and hundreds or thousands of Sun employees their jobs.

So don't let the highly unrepresentative CCIA and the fairness-wonks at Justice and the do-nothings in the EU confuse you about level playing fields and open access and giving the little guy a break. It's not about that—it's nothing more than a naked attempt to take what could not be earned. And if that's "justice," then not just the world-changing IT industry but indeed our entire free-market system is in grave danger.

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
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