IBM Remains On U.S. Antitrust Watch - InformationWeek

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IBM Remains On U.S. Antitrust Watch

DOJ investigation into Big Blue 's mainframe licensing policies ongoing even as European authorities ramp up their own probe.

The first part of the probe came in response to formal complaints from T3 and Turbo Hercules, while the EU launched the latter investigation on its own. The probe's existence does not necessarily mean IBM will face actual antitrust charges.

"The initiation of proceedings does not imply that the Commission has proof of infringements. It only signifies that the Commission will further investigate the cases as a matter of priority," the EU said in a statement.

IBM now stands virtually alone in the mainframe sector, as most competitors have left the field in recent years. But the company said that viewing mainframes as discrete from the overall server market is misguided. If lumped in with Windows, Unix, and Linux-based servers, IBM mainframes represent just .02% of all servers shipped in 2009. "Today, the mainframe is a small niche in the overall, highly-competitive server landscape," an IBM spokesman said in response to the EU's claims.

IBM also said it's got a right to protect its investments in mainframe technology, given that it spent billions of dollars resurrecting such systems at a time when the IT market was moving to distributed computing setups for corporate data centers. "These investments reinvigorated the mainframe server as a vital competitor in a highly dynamic marketplace," IBM said.

Still, IBM said it plans "to cooperate fully" with EU investigators.

All this comes as IBM looks to move the mainframe beyond traditional niches like Wall Street trading floors and research institutions. The company last week rolled out a new mainframe designed to dramatically cut data center costs and complexity. The zEnterprise server, which supercedes the z10 in IBM's heavy metal lineup, can absorb a broad range of tasks and platforms that are more typically handled by smaller, cheaper servers strung together in clusters.

The zEnterprise 196, the first in the new line, ships later in the current quarter with prices starting at $1 million. IBM is calling the system a "data center in a box," and the specs appear to justify that. With 96 industry-fastest 5.2 GHz processors on board, the raw speed is there for real-time and in-line transaction processing, and the system can support up to 100,000 virtual images.

IBM's conundrum: Antitrust watchdogs in the U.S. and Europe may pounce with formal charges if its efforts to mainstream the mainframe are too successful.

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