More IBM hardball tactics
All these efforts have had a degree of success, although mainframe revenues have been badly hurt by the recession (see chart, above). About 1,300 firms, a third of IBM’s mainframe customers, have bought add-ons enabling them to use Linux. But IBM is in legal trouble again, as it was in the 1970s. It is accused of abusing its mainframe monopoly by refusing to license software that allows other firms to build cheaper clones of its machines. Regulators in Washington and Brussels are looking into the case.
More worrying to IBM is a run-in with Neon, a software company. It sells a program that allows computing tasks that usually run on a mainframe’s regular processors to be shifted to the discounted ones meant to run things like Linux. Predictably, IBM is not happy and is said to have threatened to charge higher licensing fees to customers using Neon’s software. This, in turn, has led Neon to file a lawsuit against IBM. Defeat would make a big dent in IBM’s mainframe revenues.