Mainframe Propeller Head

Feb 18 2010   6:56PM GMT

Neon names names in amended mainframe complaint against IBM

Mark Fontecchio Mark Fontecchio Profile: Mark Fontecchio

Neon Enterprise Software has amended its complaint claiming unfair mainframe business practices by IBM, this time naming the names of Neon customers and potential customers that IBM has warned against using Neon’s zPrime software.



The amended 44-page complaint lists Honda, Daimler-Benz, Federal Express, Home Depot and Experian, among others, as potential users of zPrime who have felt the heat of IBM pressuring them to avoid zPrime. Neon claims these are intimidation methods by IBM to “crush” 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, 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 claims that IBM’s unlawful actions could cost potential Neon customers “billions” of dollars in software licensing fees.

Neon filed its initial complaint in December. IBM then responded last month, arguing that Neon is encouraging its users to violate agreements with Big Blue. It 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.”

IBM also made counterclaims, and asked 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.

In Neon’s amended complaint, it lists several companies and their correspondence with IBM over the zPrime software. Here are some, directly from the complaint. First, Honda:

Shortly after Neon announced the release of zPrime, an IBM salesperson explained to a representative of Honda, the global automobile manufacturer, that “IBM would look to make an example of the first companies that bought zPrime.”


In September 2009, IBM made the same assertion that zPrime is illegal to the
U.S. subsidiary of Daimler-Benz.

Federal Express:

In September 2009, a representative from Federal Express told Neon that the company was rethinking its decision to go ahead with zPrime because had IBM informed it that such action would result in a change to FedEx’s licensing charges.

Home Depot:

Also in September 2009, U.S. home-goods retailer Home Depot reported to Neon that “IBM is putting a full court scare tactics on us right now [sic].”


Following a visit from an IBM executive in September 2009, U.S. credit reporting bureau Experian wrote to Neon, stating:

Just so you know, Experian will not be pursuing a formal contract with Neon because of potential IBM billing issues which could arise from utilizing Neon’s zPrime software. At this time, Experian does not wish to risk this type of distraction from IBM. Due to your efforts, we have proven Neon’s technology is sound and functions as designed. Plus, we have demonstrated Neon is a great company and maybe someday in the future we will consider zPrime or other Neon DB2 utilities.

Check out the sidebar for all our related stories and files on the IBM/Neon saga.

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