Commentary
7/28/2010
09:20 PM
Bob Evans
Bob Evans
Commentary

Global CIO: IBM Attacked By EU Anti-Capitalists & IT Washouts

Two tiny makers of mainframe knockoffs are joining forces with the always-eager EU to try to browbeat IBM into unearned submission.



Call it "The Attack of the Ankle-Biters!"

The European Union's anti-competition cabal, which has begun to specialize in running paralyzing shake-down scams on successful American IT companies, to death, has joined forces with two never-were players in the mainframe space that are trying to gain through intimidation what they could not win through competition.

The two companies are trying to convince the EU's parity-lovers to force IBM to offer its highly complex, sophisticated, and expensive mainframe software on the knock-off hardware made by the two companies.

These two wanna-be freeloaders claim it's just not fair for IBM to be able to withhold from them its zOS operating system. They feel that just because they have made knockoff versions of IBM mainframe hardware that is supposedly capable of running IBM mainframe software, then IBM should be compelled—at the tip of a European spear, no less—to have the same access to that incredibly precious asset that IBM has.

Well if that's how it works, then I have an idea: I should start Bob's Hot Rod Shop and build low-brow automobile exteriors into which I'll put Porsche's brilliantly engineered and built engines and transmissions and drive trains and suspensions.

Hey, why the heck not? Why should Porsche be able to prevent me from taking its most-prized assets from them? After all, they make exteriors and I make exteriors; but they also make the guts of the car and I don't, and that's not fair. So, Porsche should be compelled to level this playing field and give me the stuff on which it has built its business, its brand, its reputation with customers, its IP, and its soul.

This is particularly ugly in its own right, but even more so when these knock-off "victims" get matched up on the waltz floor with the hoity-toities of the EU, who last year arrogantly and maliciously dragged out their "evaluation" of Oracle's acquisition of Sun for 9 months, costing thousands of Sun employees their jobs and Oracle hundreds of millions of dollars in losses via Sun's EU-created lame-duck status.

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All the while, the EU grandees did what they do best: turn up the heat for a pricey settlement--they extorted $1.5 billion from Intel—and then joked and laughed about their cleverness! (See Global CIO: Oracle's EU Nemesis Mocked Intel After $1.5 Billion Fine.)

My colleague Paul McDougall lays out the facts in his insightful news story here, but I'd like to share a little context for my assertion above that the EU's got it in for powerful U.S.-based businesses. Take a look at this list of some of the recent, uh, engagements that trifling bunch of busybodies has had with successful and ambitious American tech companies:

Qualcomm: In June 2010, the EU launched a new antitrust investigation into U.S. mobile phone chip maker Qualcomm Inc. over alleged anti-competitive activity. The new complaint came several months after the European Commission withdrew a previous, four-year antitrust probe of Qualcomm's alleged monopoly abuses.

Google: In Feb. 2010, EU antitrust authorities opened a preliminary inquiry into complaints about Google's tactics from three European Internet companies. The inquiry focuses on complaints that Google unfairly ranks the sites of the Internet competitors by lowering their rank in search results on Google sites.

Oracle: In Sept. 2009, the EU launched an in-depth investigation over concerns that Oracle's ownership of the open source MySQL database software would pose a competitive threat in the database market, delaying the closing of the Sun acquisition. The EU finally approved Oracle's acquisition of Sun Microsystems in Jan. 2010.

Intel: In May 2009, Intel was fined a record $1.5 billion by the European Commission for anti-competitive practices. The Commission found that between 2002 and 2007, Intel had paid manufacturers and retailer to favor its chips over those of Advanced Micro Devices.

Microsoft: In 2004, the EU fined Microsoft about $750 million for abusing its dominant market position. In February 2008, the EU fined Microsoft an additional amount of about $1.35 billion for failure to comply with the March 2004 antitrust decision. In May 2008, the EU announced it would investigate Microsoft Office's OpenDocument format support. In January 2009, the European Commission announced it would investigate the bundling of Internet Explorer with Windows operating systems from Microsoft.

On the other hand, for those of you who believe in coincidences, SAP's recent acquisition of Sybase sailed through the EU's shop of horrors. Could that breezy approval have had anything to do with the fact that SAP is based on the EU's home turf in Germany? For myself, I don't believe in coincidences.

Ultimately, this systemic abuse will be built into the cost of doing business by these huge global companies and the costs will be borne, as they always are, by the customers. That, I am certain, is the dead-last concern on the EU's list. Their top priority clearly seems to be their willingness to obstruct the progress of American IT companies in the global marketplace.

And why do they do it? Well, as the appropriately tawdry joke goes, because they can.

RECOMMENDED READING:

Global CIO: IBM Is Being Railroaded By Our Clueless Justice Dept.

Global CIO: Oracle Trapped By EU Politics As Sun Employees Suffer

Global CIO: Can Oracle's Larry Ellison Keep MySQL From EU Whiners?

Global CIO: An Open Letter To Oracle CEO Larry Ellison

Global CIO: Oracle Nailed By EU Protectionism As HP And IBM Raid Sun

Global CIO: In Oracle Vs. SAP, IBM Could Tip Balance

Oracle's Ellison Calls Out IBM: Why You Gotta Love The Guy

Global CIO: Why Are Microsoft, Oracle, And HP Bashing IBM?

Global CIO: How 22% Fees For Your Equal 51% Operating Margins For Oracle

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].

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