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IBM

Compuware Brings IBM to Antitrust Court 212

Posted by Hemos from the dragging-them-back dept.
pcs305 writes " According to a news article at Yahoo, Compuware is accusing IBM of stealing code and copying Compuware manuals. They also accuse IBM of being a monopoly in the mainframe market and of anti-competitive behaviour. "
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Compuware Brings IBM to Antitrust Court More

Compuware Brings IBM to Antitrust Court

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  • What is http://promo.yahoo.com/bigblank/ (Score:2, Informative)

    by Anonymous Coward
    Well being a mainframe programmer, and on top of that, being an employee of Compuware, I know that in many shops, source code is included with the product to allow the client to make modifications to suit their own unique environment. In addition to that, IBM Global Services maintain the data centers where a lot of these applications are housed so they could easily gotten their hands on any applicable source code. Don't think of these applications like you would personal application on your home PC. Lisences can cost tens or even hundreds of thousands of dollars and with that price often comes the ability to alter code to meet specifications. In order to do that Source code must be provided.

    I still find it interesting that only a few years ago the rumors were flying that IBM may possibly purchase Compuware. Who knows how much truth there is to those rumors. We may not have the clout that IBM has but I know our CEO to be a much more personalble individual that ALWAYS stands up for what he believes in.

    • Surely, if the code is suitably designed with appropriate exit points, only sample source code for exits (well-defined hooks where you can add your own code with defined inputs and outputs, for the non-mainframe types) need be distributed?

      I've worked with lots of mainframe software, and I've rarely seen source code distributed with the product....

      • Being totally unqualified to respond, I feel like I should. Hell, this is Slashdot after all! :)

        What exactly are you saying, sort of like allowing the customer to rewrite dynamically linked libraries?

        I'd think that in some applications, full code would be necessary for any non-trivial customization.

        Can you give details?
      • It's fairly common for financial packages designed for the mainframe to have the option of having source code included. But you're right sometimes companies would put a key piece of code that had no business being changed in object code only.

        I currently work in a mixed mode environment I love working client/server and mainframe but I am starting to be cured of the mainframe side. Not because of anything to do with the technology but because of the overly paranoid rules of the "QA" people who don't know anything but their rule book. You should never put non-technical people in a position of standards enforcement, but most shops do this. It is also a drain to have the responsibility of providing emergency production support but not having the authority to actually fix the problem, but this is unique to this shop(I hope).

        Cat
    • It has nothing todo with this article, which means its an advertisement. Such an action calls in to question the validity(sp?) of the AC's post. I suggest he be modded down.

  • Sad as it sounds, this case doesn't have the same level of interest as a Microsoft case.

    Granted, IBM may well dominate in the market, but I think the case that they say that they didn't want to lower costs and then IBM entered the software market shows just how silly this case is. IBM was likely willing to work with them, but not willing to keep the prices where they were just to lose market share.

    I guess we'll see how this pans out, but I bet there will be a settlement within 6 months and not a peep out of Compuware again.

    • IANAL, but...

      While IBM is still a MAJOR player in the mainframe and minifraim markets, it seems to me that they no longer have market power (they may have at one time in the ancient history of computers). IIRC, IBM was the second largest player in the server market last year, and came in behind Sun, who also manufactures mainframe and miniframe computers.

      Furthermore, I am not convinced that the mainframe and miniframe markets are distinct enough to qualify for anti-trust action, though at one time they are. Comparable alternative solutions do exist with farms of commodity servers, so the hardware market is not exactly a distinct market here.

      The time for anti-trust lawsuits vs IBM has passed. Get over it.

  • Can't compete? Sue! (Score:3, Insightful)

    by ryants ( 310088 ) on Wednesday March 13, 2002 @02:42AM (#3155147)
    "Can't compete? Sue!" seems to be the going business model nowadays. In big enough cases, such as this one, it leads to the "Can't compete? Government do something!" strategy.

    Rather unfortunate. Of course, the article is scant on details, but on the face of it it just seems that IBM delivered what customers wanted, and their competitors waffled. mmmmmm free market.

    As for the copying, I sure hope nobody posts any opinions, because there isn't enough information here to even form one about that question.

    • Re:Can't compete? Sue! (Score:1, Interesting)

      by Anonymous Coward
      As an ex systems programmer, many sites had problems with the cost Cware (and CA) charged for their offerings, and outraged to have to pay double or triple, just because they got a bigger cpu. for say, db2 - with fileaid usage remaining static So folk looked for alternatives - ask the makers of the control * products who won market share.

      IBM is sore, because high 3rd party licence fees saw their revenues drop too. So then came posix/linux. With SED, AWK and RE, are we really surprised fileaid took a hit?
      Thats on top of everyone who migrated to sun and MS (with expen$ive Y2K memories lingering). IBM is blameless.

      In short, if pricing was fairer, the cake would be bigger now.
      The fact that people are choosing inferior OS's because the real cost of Z/os is percieved to be high, says further 3rd party price reductions are needed - like SAS on the M/f
      Nope, people are voting with their hip pocket, with MS as the benchmark.
    • As for the copying, I sure hope nobody posts any opinions, because there isn't enough information here to even form one about that question.

      Then why did you post your opinion? Just using the chance to support Microsoft?

      For all you know, the company was ripped off in a major way. A suit like this won't hurt IBM very much, they have the money to continue to fight it until well after compuware has spent all their money on legal fees. I don't think compuware would bring frivilous suit against a powerhouse like IBM, especially under the current political climate, which seems to favor lack of enforcement of antitrust laws.
    • it just seems that IBM delivered what customers wanted, and their competitors waffled

      This is certainly arguable. Once a company reaches a certain critical mass in a market, they can become arrogant and begin driving what the customer wants. Is IBM doing this in the mainframe market? Perhaps--I don't know that much about IBM mainframes. Is Microsoft doing this right now? Absolutely.

      Once real choices in the market disappear, monopolies form and the customers become enslaven. This is one reason behind the growing popularity of Free Software, where many people are trying to find a way out of the Microsoft regime.
    • I agree that this lawsuit is unnecessary. Unlike the Microsoft case, where the company used it's position to illegally expand it's monopoly (I.E. using licensing schemes to prevent OEM companies from shipping a second operating system with their computers), I don't think IBM has done anything similar in the past few decades. At least, I have no knowledge of them doing so. What I do know is that IBM has been really careful not to tread on other companies' toes since the first Antitrust scare brought against them, at one time refusing to drop prices to stay below costs -- for fear of being seen as a large company waging a price war -- and that cost them dearly.

      The government does need to step in every once and a while to keep capitalism from growing too big. But not here, not now.

  • This is "anti-competitive"? (Score:5, Insightful)

    by nigelthellama ( 563606 ) on Wednesday March 13, 2002 @02:43AM (#3155150)
    From the article:

    "The Compuware suit says Armonk, New York-based IBM uses its massive Global Services arm, the world's largest computer consultancy, to steer customers to its own products even when products made by other software vendors may be more suitable."

    How is this somehow wrong? This is called "sales" in the real world. Sales people specialize in getting potential customers to use their product even "when products made by other software vendors may be more suitable", it's what they're paid to do. Yes, IBM may have a large sales department, and yes, maybe they do try to get people to buy their products even when a competitor's products might work better, but this the nature of sales, and is hardly anti-competitive.

    • Re:This is "anti-competitive"? (Score:5, Informative)

      by nurightshu ( 517038 ) <rightshu@cox.net> on Wednesday March 13, 2002 @02:51AM (#3155167) Homepage Journal

      Agreed.

      I work for UPS, and we're currently working with the Teamsters Union on contract negotiations for all of our union employees. FedEx has taken the opportunity to lure some of our current customers away from us, by talking up the possibility of another strike like the one in '97. It's so remote as to be almost an impossibility (that strike caused a huge financial dent in the Teamsters' strike reserves), but it doesn't stop them from using it as a marketing tool.

      Should UPS sue FedEx over their sales force's marketing tactics? I don't think so. Most of my fellow employees don't think so either. We'll simply press on and complete the negotiations, while we continue delivering the packages, same as always. If we can't, we sink. Simple as that.

      Business is a fairly brutal Darwinian process sometimes, and if Compuware can't handle the fact that IBM's sales weasels are slick fast-talkers, maybe they should find another line of work. I hear that selling watercress sandwiches in front of the airport is pretty lucrative...

      • I am also at UPS, Par building. I saw a couple of presentations by the Compuweenies. Those tools are so darned underpowered and ineffective. We were so disgusted with the solution that Compuware came up with that I wrote our own inhouse tool to do PLD verification. These people gave us this story that their tool could compare a file to a database so easily, and flawlessly that we would be as happy as pigs in slop. It took them 10 min just to get through reading in a file. It should have only taken them the 4 seconds that my tool takes. Garbage, and sheisters.

    • Re:This is "anti-competitive"? (Score:1, Insightful)

      by Anonymous Coward
      How is this somehow wrong? This is called "sales" in the real world. Sales people specialize in getting potential customers to use their product even "when products made by other software vendors may be more suitable", it's what they're paid to do. Yes, IBM may have a large sales department, and yes, maybe they do try to get people to buy their products even when a competitor's products might work better, but this the nature of sales, and is hardly anti-competitive.

      Indeed. But why do people complain when Microsoft bundles their browser with their operating system?
    • The only charge I see there that's serious is that IBM might have used Compuware source code and manuals to create their products. Offering competive products and IBM sales reps steering customers to IBM products are non-starters to me.
    • The problem might be if IBM Global Services markets itself as impartial but has a bias towards IBM products. Just like reports produced by Arthur Andersen on development projects tend, totally by coincidence, to recommend proposals put forward by Arthur Andersen.
    • I agree, this is sales. But, I should point out that Global Services (for the most part) is staffed by non-sales-types. I've done a ton of work with Global Services over the years and found (in my case anyways) they've never singled out their own products. That said, we have a standard clause we use in any of our contracts with them that clearly states they will have no contact with IBM Marketing (a separate arm) in regards to any consultantcy work with our company. Seems to work fine.
  • Who would have guessed?!
    Can anyone name a large tech company that isn't being sued at the moment?
  • Maybe we can change the BIG BLUE IBM to an IBM logo that looks like a Borg Cube?

    RonB
  • future antitrusts complaints :
    Kodak
    Standard Oil
    AT&T (if they still exists)
  • There's still a mainframe market?
    • your kidding right?
      there is still no better way for business to do the raw processing than on a mainframe.
      I work in the insurance industry and we have them working all the time computing actuarial tables as well as other in house functions.
      Just got in 5 of the new eServers running Linux from IBM. ~2m tall, black, air cooled. yum
      Big iron will be around for a long time.
    • Senior tech 1: How could we make our life easier?
      Senior tech 2: Well, we could get a mainframe and consolidate our major processes into one machine instead of using a variety of smaller, cheaper machines.
      Senior tech 1: Sounds good, let's do that.
      ... the following day ...
      Market analysist: Great idea, boys! How much does it cost?
      Senior tech 1: About $46,000 in equipment and $8,000 in labor for setup.
      Market analysist: Right. *checks budget, just for kicks* Well, we can approve everything but the budget increase. Get to work!

      Yeah, that, and what is jeff doing up at 1:45 in the morning?

      ~z

    • Re:IBM a monopoly in the mainframe market? (Score:5, Insightful)

      by neurojab ( 15737 ) on Wednesday March 13, 2002 @03:22AM (#3155253)
      Make no mistake... the world runs on IBM mainframes. All other systems and os's are fledgling for small players only. From airports, to financial institutions to nearly every one of the Fortune 500... they all use IBM mainframes for their core business. The reason isn't because it's a monopoly... there are always other options, but would you rather pin your business on a 50 node cluster of failure-prone DELL boxes (that may catch fire at any minute) or a slick, bulletproof mainframe? It's just good business sense to buy reliability. No one else can offer that yet.
      • Totaly agree and add that IBM has been there since the beggining, it never showed any signs that is going down. Customers like that since it shows that IBM can be trustworthy to do buisiness with.
      • but would you rather pin your business on a 50 node cluster of failure-prone DELL boxes (that may catch fire at any minute) or a slick, bulletproof mainframe?

        Wow, I think someone must tell that to the half billion people around the world who owns a x86 "flamethrower" computer.
        BTW, if they are failure-prone, thank gawd they are used in *clusters* (well, you know the concept of clusters, do you?).
      • This is probably a historical artifact. The installation of mainframes and their software involved a large expenditure, and the sunk costs need to be recovered. Then you have a working system. And the new clustered computers are still new and experimental. But I expect that you can expect to see them moving into the areas that a mainframe would have occupied increasingly over the coming years (though this year they will probably tend to continue to be used mostly to accomplish things that the budget won't support a mainframe for).
        .
      • It's just good business sense to buy reliability. No one else can offer that yet.

        Sorry, as an ex-Tandem employee I can't let that pass. For companies that are really serious about reliability, they run Compaq NSK (aka. Tandem Guardian). Last I checked the NSK systems still used by 99% of the stock markets, and most of the ATM banking systems. The mission critical areas of telcos, airlines, trains and 911 services are all markets where NSK has a major advantage over IBM.

        NSK has better TCO, and better uptime. A recent survey of the entire NSK installed customer base showed virtually every customer had an uptime better than 5 nines. I'd like to see the equivalent survey done with IBM's customers, it won't be pretty!

        IBM does have a fault tolerant program, but it is hardly off-the-shelve. First you buy redundant IBM hardware and than sign a very expensive check to IBM Global Services so they can customize all your apps. IBM has name recognition and a strong service organization. That is not the same thing as reliability.

    • Do you not watch TV or are you just not from the US? Watch for the commercials any weekend network programming to see them. For some reason, they appear durring a lot of sports. Guess the NBA SCREAMS mainframes. They have the funny one with the PHB looking for the servers and the geek saves them a bundle, and my favorite, the basketball team series with the star player Linux! The team consists of Mainframe, Middleware, and a few other guys too, so IBM is getting the word out. "Whats this?" "Triangle"

      All joking aside, mainframes kick ass. Having seen (but not used :( ) one about a year ago, and the raw power it contains, it's truly something to be reckoned with. And the best part is they were running Linux via virtual machine on it. What more could a geek want!

      I can see it now. Microsoft monopoly bad. IBM monololy bad. *sprinkle Linux into IBM* IBM MONOPOLY GOOD! SLASHJUNKIE SMASH!
      • Having seen (but not used :( ) one about a year ago, and the raw power it contains, it's truly something to be reckoned with.

        Speaking as someone who has sat in the consol operator's seat and run jobs on one, it's as fun as can be. Learning the commands is the easy part. Learning the job flow and what to do when a job abends, now that's tough. It takes a lot more than people think to sit at the consol and run the mainframe.

      • For some reason, they appear durring a lot of sports

        Well, lots of PHB's/execs watch sports (especially golf, but the NFL/MLB/NBA/NHL are also popular... not sure how many watch Arena Football... ;o). Who else buys the $2000/game courtside seats (besides celebrities like Spike Lee, Jack Nicholson, and Billy Crystal)?

    • How is this 3, Funny. How about -1, dumbass.

  • Big Blue (Score:2, Interesting)

    by Xamdam_us ( 524194 )
    I work a rather large company that might as well have an "IBM inside" logo added to ours. I would say that 99% or our computers are IBM. From the mainframe right on down to desktops and servers. I can see how it would be frustrating for a competitor to break the hold IBM has here. Especially where the mainframe is concerned.

    Just the cost of switching to another OS for the mainframe, not to mention if you wanted to switch hardware, would be outrageous. Like the article says not to many companies besides Microsoft have such a hold.

  • need the $ (Score:2, Insightful)

    by doooras ( 543177 )
    Peter Karmanos is probably just upset because his company is going down the tubes right in the middle of building a huge new world HQ in Detroit and they need some loot to finish the project.

  • Lazy or malicous (Score:4, Funny)

    by Merik ( 172436 ) on Wednesday March 13, 2002 @03:12AM (#3155227) Homepage
    Parts of IBM's manuals were identical to his company's and documented features available in Compuware products but not in IBM's, he added.

    I wonder if this damning evidence was the result of a moron or by some employee pissed off cause he was forced to rip someone elses sh!t.

  • No way! They support Linux and bring out those "Peace-love-linux" ads, don't they?

    ;-)

  • Let's look at this the other way.... (Score:5, Insightful)

    by Gollo ( 415077 ) on Wednesday March 13, 2002 @03:37AM (#3155272)

    For years IBM stayed well out of the mainframe database tools market, instead it was dominated by tools from Platinum (now CA, I believe), BMC, Compuware and others. To be realistic, you couldn't really run DB2 effectively without some of these tools.

    Then all of a sudden IBM announces that they are going to begin selling competing tools (not bundled, but separately priced products) and the 3rd party vendors were screaming.

    Why? Yes, they would have cause to be unhappy about the new competition, but one would think that their products would be technically superior in the short term (having been around for 10 years) and too well-entrenched in many shops to be easily surplanted.

    Well, it actually turns out that some of these products actually didn't do much themselves. They were basically fancy front ends to code that IBM supplied with DB2 that wasn't entirely easy to access (only programmatically). We are not talking just basic funtionality here, were talking enhanced processing. IBM discovers this, and realizes that these vendors are really riding IBM's gravy train (and anyone who has ever looked at mainframe software costs will understand how much these vendors charge for a 'front-end'). So now IBM separates that code from DB2 and ships it (and their own front end) as a separate product. What does that mean for a 3rd party vendor? That if you want to use their product, you also have to have the equivalent IBM product installed. No brainer, really.

    As far as I'm concerned, the 3rd party vendors deserve to get shafted here. I've seen how much they charge - and they couldn't even be bothered to write a decent tool that could ever possibly compete with an IBM supplied one...

    Anyway, that's the story as I heard it..... YMMV.
  • What do they hope to gain from having someone telling IBM "you're evil" every time they violate antitrust laws, without the power to do anything else?

    Oh, wait, IBM didn't put as much money into the governments as Microsoft...
    • Oh, wait, IBM didn't put as much money into the governments as Microsoft...

      What planet are you on? IBM has always thrown power around the halls of governments the world over. They may not do so much campaign contributing, but they try to have some kind of an operation in a large portion of legislative districts. Thus, if they announce that they're laying off n% of workers, they tend to center the layoffs in the districts where noncompliant lawmakers are from. Losing a few thousand high-paying jobs will have repercussions, and no representative wants that.

  • Wow, what a surreal experience.... It just seems to me I'm back in the early eithies! Cool, I'm young again! :-)

  • IBM _is_ a monopoly (Score:3, Insightful)

    by Ed Avis ( 5917 ) <ed@membled.com> on Wednesday March 13, 2002 @04:53AM (#3155434) Homepage
    It's clear that IBM has a monopoly in the mainframe market, or at least something close to it. You can deduce this simply by looking at their pricing policies.

    If you buy a mainframe then it often comes with say six CPUs, of which only one is activated. If you pay IBM some extra subscription money they will send an engineer round to activate the second CPU, or up to all six depending on how much you pay. It costs them almost nothing to do this, and it would cost nothing extra to simply have all six enabled when the machine leaves the factory, but IBM charges extra for it.

    You can consider this as market segmentation - selling the same product to different parts of the market and charging different prices, so as to squeeze the most out of each consumer. If there were plenty of competition in the market, then IBM would need to sell mainframes with the best price/performance possible and would ship with six CPUs by default, at a price close to the manufacturing cost. The fact that they can get away with this pricing scheme shows they have considerable market power, if not an outright monopoly.

    A more positive way of looking at the situation is that the cost of a mainframe reflects less the manufacturing costs (marginal cost), and more the R&D effort that went into desigining it or the expense of building the factory (fixed costs). In this case IBM's charging different prices, despite the marginal cost to them being no different, is just like Novell charging different prices for a 10-client Netware licence and a 100-client licence. So IBM has a monopoly on that particular mainframe design in the same way Novell has a monopoly on Netware. This is still not ideal for the consumer, but it's often considered a necessary evil to provide incentive to invest in new designs.
    • I agree with you about them having or almost having a monopoly on the mainframe business. However if a company needs the kind of processing power offered by a mainframe, then most likely they will be able to afford IBM's pricing. Yes it would be nice if there were more competition.

      I think part of the cost is that you know when you buy a mainframe from IBM; it will be up 24/7, 365 days a year. Companies that use mainframes can't afford the problems that servers have. It seems that people have grown accustomed to servers crashing as something that just happens. See what happens when your mainframe goes down for a minute. Talk about panic.

      It all comes down to "You get what you pay for".

    • Damn right. IBM actually makes a profit even if it ships the hardware necessary to have a 6-way MPU computer! Can you imagine what fucking margin they have?

      These engineers bring some dinky floppy with them, that they use to activate the additional CPUs. That floppy must be the most value-per-gram item in the world. Not even enriched uranium beats it.

      • Re:IBM _is_ a monopoly (Score:3, Informative)

        by perky ( 106880 )
        Yet again, you haven't appreciated that the hardware cost of an s/390 is only a small proportion of the cost to IBM of delivering an s/390. The marginal cost of adding 5 processors when you have the fab up and running is negligible when compared to the cost of R&D, software development, marketing, support, building and tooling the plant etc. yes, the margin is big, but not that big.

    • What happens if a non-IBM person activates the other processors. Now that hard and software support can be completely unbundled and even passed away from IBM - can they stop a customer from upgrading their system?

    • Agreed. Saying IBM is monopolistic, is just like saying IBM's favorite colour is blue.

    • They may not sell IBM mainframes, but they do sell mainframes [ic.ac.uk]. See NEC supercomputing [nec.co.jp]. See this page [cjmag.co.jp] for an interesting view of computing in Japan.

      I imagine that any self respecting country would have some kind of indigenous dino [ic.ac.uk] maker. Let's see. Germany [hoise.com]? Nope [netlib.org]. UK [netlib.org]? Nope. Similar pages can be found for France. Bully for Germany and Japan for at least trying, but it looks like the US kicks ass in this field. I suppose that you can charge alot when you make something others have a hard time keeping up with.

      We shall see the merits of the case.

      • They may not sell IBM mainframes, but they do sell mainframes.

        Actually, the NEC SX series-- also sold in the States by Cray, incidentally-- is a supercomputer, not a mainframe.

        Some informal definitions: a mainframe is a medium-to-large computer system optimized for reliability, and often used primarily for batch processing. Most mainframes (although not all) run databases or similar transaction processing systems. Mainframes are traditionally programmed in Cobol, although Java is becoming popular.

        A supercomputer is a medium-to-large computer system optimized for performance. While supercomputers are also used primarily for batch processing, they run a different kind of job. Supercomputers run numerical analysis, computational fluid dynamics, weather simulation, or any of a whole host of other applications, then spit out results, often in the form of a three-or-more-dimensional dataset. Mainframes are traditionally programmed in Fortran.

        The NEC SX-6 is a vector supercomputer, not a mainframe.

    • Re:IBM _is_ a monopoly (Score:3, Insightful)

      by perky ( 106880 )
      I think you might be slightly missing the point here. The actual hardware shipped by IBM constitutes only a relatively small proportion of the cost of making that delivery. Whereas there are millions of x86 machines shipped each year and the R&D cost is spread over each of them, there are only tens or hundreds of S/390s/zSeries shipped each year, and hence the R&D value in each piece of physical hardware is significantly larger. The relative cost of shopping with more procs on board is small. Now add to this that many s/390 machines will still be in operation in a dozen or more years having been upgraded rather than replaced, and it makes sense for IBM and its customers for each parallel sysplex board to be shipped with 6 procs onboard. This way upgrades can be completed more quickly and cheaply, with less disruption to the running of the machine.


      Sure, IBM is segregating its market, but there is competition from the big *NIX clusters, so they can't push things too far. On top of this many of the big s/390 users also have very large CICS and MQ/series installations bringing in millions a year to IBM software group. It wouldn't really make sense to price the hardware out of range because the software and suport contracts would dry up too.

    • I remember when RCA computers came in two models, a fast one and a slow one. You could upgrade the slow one into the fast one: A repairman came out and replaced a long cable with a shorter one. (I think this was models 2 and 3.)

      RCA was never dominant, much less a monopoly, in the mainframe market.

      This is not to doubt that IBM is a monopoly. I know that they used to be. It's just that this isn't proof (though it is evidence).

      And, to an extent, the price of mainframe tools is justifible on the basis that they can't expect to sell many of them. Large mainframes are rather like electricity distribution. They are a "natural monopoly" because the entry costs are huge, and there isn't a demand for a large number of them. The reason that they aren't a natural monopoly is basically that there are other ways of accomplishing the same end. Distributed network based computers, clusters of various sorts, etc. But these are recent developments, and are probably intrinsically less efficient than mainframes. So the mainframe area has become the turf of a few (quite few) huge companies that did most of their hardware development over a decade ago (so the costs are sunk) and are selling into a comparatively small market (though IBM seems to be trying to establish web servers as a reasonable extension of their market).

      I'm not sure just how much regulation this kind of market warrants. Would the companies actively develop for such a small market? Or are they basically recovering costs for software that they build before the recent structural changes in the market? Not all markets deserve to be protected against monopolies. Consider the market of producing "Metallica" albums. That is basically a monopoly (at least if I got the name right). But in this case the government hasn't decided to insist that the market be protected against the monopoly. Instead they've choosen to strengthen the monopoly. I'm not sure how much effort is justified here, either, but perhaps there is a kind of a continuum from monopolies that deserve governmental support to monopolies that deserve governmental suppression. Perhaps. I tend to believe that over most of the spectrum the appropriat reaction is for the government to ignore the monopoly, and that it should act to suppress widely spread monopolies (i.e., to cause them to cease being monopolies), and that it should support the monopolies in the use of trademarks. And that's about it.

      Of course, implementation details are important, but that's the general tenor of my feelings.
      • This is not to doubt that IBM is a monopoly. I know that they used to be. It's just that this isn't proof (though it is evidence).

        It is not proof of an absolute monopoly. It is evidence of market power. In practice no company has an absolute monopoly because there are always alternatives. Government doesn't intervene only in cases of an absolute monopoly, but also if one company has a near-monopoly or a dominant market position. In the UK a monopoly is legally defined as 25% or more market share, which sounds stupid but makes sense for economic policy.

        And, to an extent, the price of mainframe tools is justifible on the basis that they can't expect to sell many of them. Large mainframes are rather like electricity distribution. They are a "natural monopoly" because the entry costs are huge, and there isn't a demand for a large number of them.

        Agreed. If you accept that there will only be a few mainframe suppliers, then the hardware-crippling can be seen as a good thing, letting smaller customers afford mainframes.

        (I remember an article in an industry publication describing Amdahl's breakthrough in allowing you to limit the amount of CPU or memory your machine uses, in order to pay lower software licence fees. It's ironic that a way to deliberately make your computer perform worse is called a 'breakthrough' - but that's the way this market works. The software companies make their money by pricing according to usage, because marginal costs are zero and there are no direct competitors selling exactly the same piece of software.)

        Consider the market of producing "Metallica" albums. That is basically a monopoly (at least if I got the name right). But in this case the government hasn't decided to insist that the market be protected against the monopoly.

        The government actively created the monopoly by passing copyright legislation. Doing so is actually in the public interest because it gives incentives to create more music. At least, that's the theory.

  • Check out the huge ad for IBM on this page :-)

    David

  • Not a monopoly like Microsoft is (2c) (Score:4, Insightful)

    by lpontiac ( 173839 ) on Wednesday March 13, 2002 @06:03AM (#3155574)

    The way I see it, the difference between the (as determined by a court of law and upheld on appeal) Microsoft "desktop monopoly" and the (alleged) IBM "mainframe monopoly" is that IBM doesn't forcibly leverage it's market dominance across markets. They don't employ the same actively anti-competitive tactics as Microsoft - embrace and extend, providing unrelated services a la msn which deliberately and unnecessarily discourage the use of non-IE browsers, not allowing OEMs to offer alternate operating systems etc.

    By way of comparison, if IBM was employing Microsoft's tactics then their mainframes would only speak a proprietary altered TCP/IP that was only properly supported by OS/2, if someone else wrote a freeware replacement for OS/2's built in remote terminal program then the subsequent release of the mainframe OS wouldn't let you connect with it, and IBM would refuse to sell you a mainframe if you had any non-IBM computers in your corporation.

    It's also worth noting that the mainframe market has far higher natural barriers to entry - a *lot* of R&D to produce relatively small quantities of very expensive items which sell to a relatively small market.

    • Yes, certainly true nowadays, but - proprietary altered TCP/IP? It's not TCP/IP but SNA is IBM proprietary - don't know if they ever pulled any nasty Microsoft tricks with that one.
      • Yes, certainly true nowadays, but - proprietary altered TCP/IP? It's not TCP/IP but SNA is IBM proprietary - don't know if they ever pulled any nasty Microsoft tricks with that one.

        Their nasty trick was in releasing it. Clearly, you've never had to try to get SNA to work and stay working. (Granted, it's probably more natural on mainframes than on RS6ks like I was working on.)

    • Up through around 1998 I considered that IBM had been a more restrictive monopoly than MS. This has since changed, but that's because MS changed.

      OTOH, IBMs monopoly position has weakened because increasingly if customers are dissatisfied they have an alternative. So IBM is still a monopoly in the mainframe market, but the mainframe market size is determined by customer satisfaction. There are (often) alternative approaches.
      .

  • It seems to me.... (Score:4, Insightful)

    by MadScie ( 545219 ) <originalmadsci@hot m a i l.com> on Wednesday March 13, 2002 @06:36AM (#3155613) Homepage Journal
    that Compuware is not so much upset about the idea of having to compete with IBM, they are upset about having to compete with IBM when IBM is using their code.

    The article talks about the same bugs being in the code, and identical pieces of manuals and documentation. If those things are true, then there is more here than a simple "I can't compete" lawsuit. It makes sense to me that someone would sue over this. When your product costs hundreds of thousands (or more) of dollars to develop, and the big kid on the block comes and steals it to sell, you tend to become, how we say, a little irritated.

    This is not one of those frivolous lawsuits we love to complain about. If IBM used Compuware source in their products, this lawsuit has merit, and should be pursued.
    • This is true... however, CompuWare themselves are muddying the water by talking up the pricing argument and the IBM mainframe monopoly. I guess they figure they'll get more publicity this way...

      Garg

  • this is crazy (Score:2, Insightful)

    by m0RpHeus ( 122706 )
    It's just like suing Apple for heving an OS monopoly on Apple and Sony for having a monopoly on Playstation.

    Anyway, this is different from Microsoft wherein they pressure computer makers to market their OS only, while IBM, it's their mainframe.
    • As others have pointed out, having a monopoly isn't illegal - using unfair practices to leverage your monopoly to enter new markets is. If Apple had used their monopoly on MacOS to gain an unfair advantage in producing applications for MacOS, then it might raise an eyebrow with anti trust lawyers.

      What Compuware alledge that IBM did is among others that IBM purportedly used their near monopoly in mainframe hardware to corner the mainframe application market by having their service arm push IBM mainframe software regardless of suitability. This could very well be illegal, provided that a judge see mainframe hardware/OS sales and mainframe software tools as separate markets, and finds that IBM indeed has a monopoly on the former.

  • As has been mentioned here many times when discussing the Microsoft case, a monopoly in itself is not illegal (in fact it's the great American dream).

    However, using that monopoly to unfairly compete with other companies to *extend* that monopoly, can be illegal.


    If this has truly happened, we should probably hold IBM to the same standard as Microsoft. Any antitrust activity on IBM's behalf wouldn't have been on the same scale as the illegal activities of which Microsoft has been found guilty, but it would be nevertheless wrong.


    Let's hope that the allegations are either untrue, or IBM settles this one amicably, perhaps out of court. Because, at least in our world, they have been one of the good guys in recent years.

  • FUD (Score:1)

    by souter ( 128143 )
    I worked for Amdahl when it was making IBM compatible mainframes. The favoured marketing technique of IBM was Fear, Uncertainty and Doubt i.e. "Sure, those Amdahl boxes may be cheaper/faster, but they might not be fully compatible with the next release of MVS. You'd better stick with big iron from the same source as the software".
    Monoplistic? Yes. Illegal, hard to say and even harder to realistically do anything about. Mainframe buyers are inherently conservative.
    For the record, Amdahl eventually gave up the fight and left the mainframe business.

  • Mainframe Monopoly (Score:2, Insightful)

    by Tk_Coder ( 566240 )
    Monopoly in the mainframe market? If the other (now mostly dead) mainframe companies would have focused on technology, instead of becoming the 'next IBM', they may not have died. Look at what Getronics did with the Wang VS mainframe - cut R&D, stopped marketing, etc.. It was ahead of it's time back in the 80's. Had they embraced open standards, and kept the emphasis on technology, they might still be around. Complain about IBM all you want, they have always (and still have) a big focus on R&D.
  • In other news, new antitrust lawsuits are being filed against Standard Oil, Carnegie Steel, and AT&T.
  • The Compuware suit says Armonk, New York-based IBM uses its massive Global Services arm, the world's largest computer consultancy, to steer customers to its own products even when products made by other software vendors may be more suitable.

    This is called a sales pitch. If I make and sell product A and a customer comes to me and wants a basic server, I don't have to tell him about another companies product, B. It's not my job. If product A will do it but it's overkill, I don't have any reason not to want to sell it. If I sell Chevy's and a customer's description of what they're needing is a Ford, I'll still sell them a Chevy. I have no reason to want to sell them a Ford, even if the Ford is the perfect fit with their needs.

    Secondly, IBM ties or bundles its software products into its machines, making it difficult for independent software suppliers to compete in the mainframe market, the suit said.

    It's IBM's hardware. They can bundle whatever the hell they want to bundle with it. This would be comparable to M$ suing Apple because Apple doesn't sell a G4 without the MacOS. Apple makes their hardware and the software. If they want to stop selling the hardware, jack up the software price to $2k, and bundle the hardware with it, they are perfectly within their rights to do so.

    Are these people really that stupid? Are they just bucking for some publicity?

    Now I don't know anything about code stealing or manual plagarism. They might very well have done that. I think these other two key points are frivolous though.

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