Mainframe Propeller Head

Jan 29 2010   5:55PM GMT

IBM responds to Neon Software mainframe lawsuit

Mark Fontecchio Mark Fontecchio Profile: Mark Fontecchio

IBM has responded to Neon Enterprise Software’s lawsuit claiming unfair competitive practices related to the mainframe, saying the company is encouraging its users to violate agreements with Big Blue.



IBM’s 37-page response is actually longer than Neon’s 24-page lawsuit, which was filed in Austin, Tex. District Court in December. Neon’s main claims were that IBM wasn’t playing fair by trying to limit competition and intimidating prospective Neon clients. The original suit stemmed 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, which saves them money because software licensing rules that apply on the main processors don’t apply on the specialty ones.

In its lawsuit, Neon claimed that IBM’s unlawful actions could cost potential Neon customers more than $1 billion in software licensing fees.

IBM has now shot back, however, saying that the issue is really about Neon’s “attempted hijacking of IBM’s intellectual property.” IBM compared what Neon is doing to a “crafty technician who promises, for a fee, to rig your cable box so you can watch premium TV channels without paying the cable company. Even if it could be accomplished technically, it is neither lawful nor ethical.”

Big Blue isn’t stopping at defending its practices, however, which Neon called a “monopoly” in its original lawsuit. Instead, IBM is making counterclaims and asking the court not only to dismiss Neon’s claims, but also to force Neon to stop selling zPrime, give Neon’s zPrime profits to IBM, and award IBM any other damages that the court sees fit.

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. The verbal back-and-forth continued for a few months. Now, it’s a legal back-and-forth.

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  • Ps2os2
    Maybe It is me but NEON comes across as a bottom feeder in this. The T&C clearly state the conditions and (to me) NEON is advocating to violate them. It would be fun (to me) to see what would happen if IBM changed the interface and hear NEON squawk. The courts are full of litigation yet this sounds like it is ready made for a court fight.
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