Antitrust woes
The antitrust knives are not only out, but are being sharpened as computer behemoth IBM braces itself to suffer the cold, hard stab of American justice, with the Department of Justice (DOJ) kicking off a preliminary probe to establish whether the firm unfairly monopolised the market for the mainframe computers.
After years of whining by the Computer & Communications Industry Association (CCIA ), it would now appear IBM may be taken to task, and potentially to court, as antitrust regulators start delving through the computer giant's business practices.
CCIA members ironically include the likes of Microsoft, Google and Oracle - competitors not unfamiliar with the workings of antitrust probes. The organisation has spent years claiming IBM is being the big blue bully by purportedly blocking all attempts by competitors and potential partners alike to license the firm's mainframe software.
It's not the first time either. A while back, tiny mainframe reseller T3 took legal action against IBM, filing suit in the federal court of New York, as well as in Europe, on claims IBM was totally dominating the mainframe market and freezing out competition. Last week, however, a New York federal district judge dismissed the case. T3 says it will appeal, but meanwhile the CCIA appears to be taking up the baton and running with it, insisting that IBM is playing dirty by signing up enterprises that would have a very high cost of switching to other systems. The firm apparently also refuses to share blueprints necessary to offer a cheaper alternative.
IBM, however, has brushed off the allegations, maintaining they hold "no merit" and releasing a statement to say the firm "intends to cooperate with any inquiries from the Department of Justice."
The firm may well have nothing much to fear. Back in 1982, the Reagan administration dropped an antitrust case against IBM in the mainframe market after 13 years. Yes, mainframes have really been around for that long.
But for those who think mainframes are a relic of the past, it would be worthwhile remembering that they still play a big part in IBM's current business, with around 25 per cent of the firm's $104 billion in annual revenues hailing from the sale of mainframes and associated offerings including accompanying software and services and storage.
Legacy transaction-based applications still comprise about 80 per cent of corporate IT workloads, and the recent virtualisation and nebulous "cloud computing" hype has brought mainframes back to the forefront.
Whether IBM manages to dodge yet another antitrust bullet, Matrix-style, this time around, remains to be seen.
