The battle between Neon Software and IBM over mainframe software practices, which has been escalating since early summer, has now hit the court system.
Neon Enterprise Software filed the 24-page lawsuit in U.S. District Court in Austin, Tex. yesterday, claiming unfair competition and intimidation of prospective clients for Neon. The suit stems from Neon’s zPrime software, which allows users to offload workloads from the mainframe’s central processors to specialty mainframe processors. This in itself isn’t unusual, but what zPrime does is allow users to offload more work to these specialty processors than IBM intended.
In its lawsuit, Neon claims that IBM’s unlawful actions could cost potential Neon customers more than $1 billion in software licensing fees.
Neon also throws around the word “monopoly” and “locked-in” in regards to IBM’s control of the mainframe market and mainframers’ reliance on IBM. There is no doubt that these statements tap into other complaints about IBM’s mainframe practices.
In particular, there were lawsuits by Platform Solutions Inc. (now owned by IBM) and T3 Technologies, which were selling plug-compatible mainframes that could run z/OS on Intel’s Itanium processor. IBM has essentially shut them down by not licensing z/OS for those alternative mainframes. In addition, the U.S. Justice Department is now investigating whether IBM owns a monopoly in the mainframe market.
Why does all this matter? Software licensing on the central processors (CP) is expensive. For large organizations, it costs millions of dollars per year.
In part to ease this pricing pain and keep its customers from moving work off the mainframe, IBM introduced specialty processors such as the Integrated Facility for Linux (IFL), the System z Application Assist Processor (zAAP), and the System z Integrated Information Processor (zIIP). Though the specialty processors are the same physical hardware as the central processors, what IBM intended to have customers runs on each was different.
Big Blue’s intention was to allow some z/OS workloads – Linux, DB2, and Java – to move to these specialty processors, where software licensing was free. The processors have become popular among mainframers, in particular the IFL and zIIP. Meanwhile, IBM wanted mainframers to keep their legacy applications on z/OS on the central processors, where licensing fees were still huge.
Neon bucked those intentions. At the end of June, it announced its zPrime software, claiming that mainframers could offload more than just database and Java workloads to the zIIP and zAAP. And then the war of words began. IBM started warning customers that zPrime could cause mainframers to violate software agreements they had with IBM. Neon disagreed. This back-and-forth continued for a few months until yesterday, when it appears Neon had had enough and filed the lawsuit.