IBM: Mainframe emulator part of a conspiracy
The irrelevant market is ours - all of it
Comment Let's start with the obvious: there was never a poor bald geek's chance with a supermodel that IBM was ever going to willingly license its z/OS and related systems software so it could run on the commercialized version of the open source Hercules mainframe hardware emulator for x64 iron.
So the launch of the TurboHercules commercial version of the mainframe hardware emulator in September 2009 was always going to end up living or dying based on what some court somewhere would say.
Roger Bowler, the Brit who created the emulator was smart enough to headquarter his company in Paris, France, where the European Union's antitrust authorities could be brought to bear and antitrust was arguably taken more seriously than in the United States; particularly when it comes to large IT giants such as IBM and Microsoft. So when TurboHercules filed a complaint earlier this week with the European Commission's competition directorate general in Brussels, alleging that Big Blue is illegally tying the licensing of its mainframe software to its mainframe hardware, the only surprise was what took so long.
While TurboHercules is asking the European regulators to compel IBM to sell its systems software to companies that want to run the emulator on x64 or Itanium iron instead of System z hardware from Big Blue, the odds that this will happen are very small. But not non-zero, and certainly worth a lot of money to TurboHercules if it prevails in court.
With many billions of dollars per year at stake, and the vast majority of that being profits, you can bet that IBM is not going to take any threat by TurboHercules lightly, just as it is crushed any direct competition to the mainframe in the past decade. Here is the full statement from Big Blue regarding the complaint filed by TurboHercules:
TurboHercules is an "emulation" company that seeks a free ride on IBM's massive investments in the mainframe by marketing systems that attempt to mimic the functionality of IBM mainframes. This is not really any different from those who seek to market cheap knock-offs of brand-name clothing or apparel.
TurboHercules is a member of organizations founded and funded by IBM competitors such as Microsoft to attack the mainframe. Such an anti-trust accusation is not being driven by the interests of consumers and mainframe customers - who benefit from intellectual property laws and the innovation that they foster - but rather by entities that seek to use governmental intervention to advance their own commercial interests.
Only a decade ago, IBM's mainframe platform was on the verge of extinction because of intense competition from other types of computing platforms. IBM invested billions of dollars in R&D - when everyone else left the market - to upgrade the platform, create a new generation of microprocessors, and develop improved mainframe technologies. The mainframe is a small niche in the overall server market, but customers benefit from an improved platform and alternatives to Unix and Windows. IBM is fully entitled to enforce our intellectual property rights and protect the investments that we have made in our technologies.
A couple of things come to mind reading this statement...
Knocking off the knock-offs
First, I got a good guffaw out of the line about entities that use governments to advance their own commercial interests. There isn't enough time in the day to list all the times Big Blue has benefited from the intervention of local, state, and federal governments around the globe.
The 'cheap knockoff' comment harkens back to the early days when Amdahl (backed by Fujitsu and then owned by it) and then Hitachi created clone mainframes that compete against IBM's System/370s some 35 years ago. As anyone who has watched the engineering done by Amdahl/Fujitsu and Hitachi in the long and strange mainframe market knows full well, it was these companies that often innovated ahead of Big Blue - as is often the case with a convicted monopolist even after it is compelled to open up its platform (as IBM was compelled to do with the 1956 antitrust decree and its amendments in 1969).
Amdahl had logical partitions on mainframes way ahead of IBM's, and Hitachi's Skyline bi-polar mainframes from April 1995 through October 1999 kicked the living guts out of Big Blue's System/390 bi-polar and CMOS alternatives. The final Skyline Trinium machines put putting 2,000 MIPS and 320,000 I/O operations per second in a single system image. That's good enough that they can still be sold in Japan more than a decade later and do useful work - provided you want to use Hitachi's software.
The fact of the matter is that the competition engendered by that consent decree helped spawn the modern computer industry because it illustrated that the United States government had limits on how much monopoly power it would tolerate not just with IBM, but with any computer platform provider. Monopoly is always measured against a relevant market, and the clever lawyers at Cravath, Swaine & Moore, IBM's hotshot, white-shoe law firm in New York, were able to argue to get that consent decree overturned in 1997, with a four-year window for sunsetting it.
Amdahl and Hitachi didn't exit the market so much as being pushed out of it. Once the consent decree was inactive in 2001, IBM would not have to sell its mainframe software on Amdahl or Hitachi boxes, and so it is not at all surprising that these companies mothballed their respective mainframe hardware lines in 2000. They did so not because there wasn't plenty of money to be made with mainframes - which there was, and certainly still is - but because it was abundantly clear that thanks to Moore's Law the money would increasingly come from the systems software, not the hardware.
Amdahl and Hitachi were not getting a cut of the IBM mainframe software action, so what was the point? At some point, you'd have to almost give the hardware away just to get the software and services contracts.
I think it is safe to say that IBM's mainframe market is moving at an increasingly glacial pace in terms of technology change. But then again, the same thing will start to happen with all server platforms once virtualization is sorted and fully baked into x64 chips. That is not against the law; and as a practical matter, is it against the law to tie an operating system to a device? Cell phone operators do it, Apple did it with its own variants of Power platforms and still does it with Intel-based systems.
Microsoft was gung-ho about having Windows run across MIPS, Power, Itanium, and x86/x64 platforms, but for all intents and purposes it is really just an x64 operating system, tied as much to the x64 architecture as IBM's mainframe software is tied to 64-bit System z hardware these days.
Just as IBM did when it argued to get out of the 1956 consent decree, Big Blue's lawyers will say that the mainframe is a small and battered platform in a vast and competitive market, and that this is the relevant market that should be used to determine if the company has monopoly control. If IBM has a mainframe monopoly, then Apple has a PC one, too.
Quiet, or we'll buy you
Incidentally, if you restrict that relevant market to machines that can run z/OS or machines that can run Mac OS X, then they absolutely do have a monopoly, they do tie their operating systems to their hardware, and maybe they should be compelled to make their software available on alternative platforms. But it is going to take a much larger company than TurboHercules to make that argument, and a lot more money is going to have to be at stake in Europe and relating to European companies and European politicians, before TurboHercules even has a chance of anything but running out of money to fund its lawsuits or being bought out by Big Blue to get it to shut up.
Not that buying someone who is suing you to shut them up - as IBM did in July 2008 when clone mainframe maker Platform Solutions made a fuss - should be legal. But it is not precisely illegal, either. IBM has a long history of buying technology companies to eliminate the competition, as do many, many others.
Having said all of that, it is perfectly understandable to want the Hercules emulator to be available as a true alternative to IBM's mainframe iron running its mainframe software, and a perfect fool as well as a genius could readily see that having such an alternative would be a good thing for mainframe shops.
If Microsoft wanted to really cause some trouble, it would blackbox a version of z/OS that runs on a Windows kernel, slap a DB2 emulation layer on top of SQL Server, put natively compiled z/OS code atop the Hercules emulator inside Hyper-V partitions, and be done with it. That would cost lots of money - but then again, Microsoft has lots. ®