IBM hits back at ‘mainframe monopoly’ accusations

Computing giant IBM has hit back at a recently published report claiming that the company’s mainframe business practices in India are strangling competition in the country.

The research paper, released by the Indian Council for Research on International Economic Relations (ICRIER) in conjunction with IT forum, claims that IBM is undercutting its competitors in terms of price, while also bundling operating systems with its mainframes that are purposefully difficult to migrate to other servers.

“The applications get tied to an IBM operating system (z/OS) that cannot run on other servers because of IBM’s restrictive licensing practices,” the 90-page report alleged. It concluded that IBM should ‘unbundle’ its hardware and software.

In response, IBM has said that is "bought and paid for" by Microsoft, while also accusing its US-based rival of being a substantial component of any existing Indian mainframe monopoly.

“To call the IBM mainframe a ‘monopoly’ is silly. Only a decade ago, the IBM mainframe was on the verge of extinction because of ‘Wintel’, that still heavily dominates the market today," a spokesperson for IBM commented, referring to the combined presence of Windows and Intel developed mainframes in the South Asian country. "By investing billions of dollars, IBM has improved the mainframe platform. This report has no credibility.”

ICRIER’s report surveyed more than 70 major IT deployments in the country – a number of them public sector institutions including Indian Rail, the department of tax and the Centre for Development of Advanced Computing.

IBM’s mainframe business, which has been largely unchallenged for at least a decade, has come under renewed criticism of late. In October 2009, the US Department of Justice launched an investigation into the company after mainframe hardware manufacturer T3 Technologies filed an official complaint.

Meanwhile, a software company called NEON Technologies, which claims its zPrime technology greatly reduces the cost of running mainframes, has accused IBM of "business disparagement and tortious interference" in claiming that its customers would be in breach of their license agreements if they were to deploy zPrime.

IBM denies wrong doing in all cases.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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