|By Maureen O'Gara||
|December 21, 2009 08:00 PM EST||
Neon Enterprise Software sued IBM Monday morning in federal court in the Western District of Texas claiming Big Blue is out "to crush" it and prevent mainframe customers from saving hundreds of millions of dollars.
Neon's the Texas outfit with the newfangled mainframe widgetry called zPrime that, if unfettered, could supposedly drain IBM's prized mainframe revenue stream.
It reportedly can, in some cases, save mainframe customers 90% of their onerous software licensing fees. One potential customer reckoned zPrime could save it $100 million over two years.
See, Neon can move legacy workloads onto the zAAP and zIIP specialty processors (SPs) that IBM uses to run XML and Java programs and accelerate DB2 apps on its big iron. There are no monthly software licensing fees associated with the widgets - even though they're no different from the mainframe's central processors (CPs) that run legacy workloads - and that's so mainframe users won't drift off and start running the more modern Java and SOA workloads on commodity boxes.
IBM doesn't want zPrime anywhere near its mainframes and, according to the suit, has run off potential Neon customers such as Wells Fargo, the big financial house, and Highmark, the insurance company, by claiming that their contracts forbid them to use the SPs for legacy workloads.
"In case after case," the suit alleges, "as IBM became aware that a given customer had tested and was prepared to acquire zPrime, IBM made clear that such a decision by the customer would result in prospective and severe discipline from IBM."
Neon says IBM has threatened to sue customers for using zPrime and to "extract from future negotiations any revenue lost via a customer's use of zPrime."
Neon apparently had more than 50 potential customers to start with and claims it was forced to sell zPrime for less than it would have fetched to those companies that IBM didn't have a completely "chilling effect" on. It told the court it expects to lose more sales and margin if IBM isn't stopped.
Both Neon and large mainframe users have reportedly combed through their contracts and IBM's collateral material in vain searching for the alleged prohibition. Neon says it has also repeatedly asked IBM for the citation and IBM hasn't produced it.
Neon's lawyer, Chris Reynolds of Reynolds, Frizzell, Black, Doyle, Allen & Oldham in Houston, reasons that if the language exists - as it does for the specialty processor used to run Linux on mainframes - the guys running IBM's mainframe unit would have stuck the passage under the nose of every mainframe user on the face of the earth and made them read it back to them after zPrime came out in June.
Instead Reynolds found IBM telling IT Jungle in 2006 when the zIIP processor came out that its interfaces were "open, and other vendors are open to leverage it....We want to make it accessible, since this can only help encourage more workloads to move to the mainframe."
Therefore he figures no restrictions exist, IBM is bluffing and Neon is perfectly within its rights. And he has asked the court for a declaratory judgment saying so.
Furthermore Neon is charging Blue with tortious interference, business disparagement and unfair competition under California law, which is stricter than most. It's asking that IBM be forced to disgorge any profits made at Neon's expense under the Lanham Act, which basically says that if IBM is found to have caused Neon to, say, lose a $2 million sale to protect $20 million in revenues, well, it could kiss that $20 mil good-bye.
Neon also wants IBM enjoined from bad mouthing it and zPrime any more as well as actual damages, punitive damages, pre- and post-judgment interest and attorneys' fee.
Neon, which is backed by BMC co-founder John Moores, has reserved the right to sue IBM for antitrust violations, figuring it could make a dandy case of monopoly maintenance and tying.
Of course the Justice Department is a couple of months into an antitrust investigation of IBM's behavior in the mainframe market since it got out from under its 1956 consent decree in 2002 so Neon may not have to.
On the other hand, if IBM produces a contract that restricts its mainframe users from using competitive software on those SPs, Neon could hit IBM with charges of foreclosing competition under the Clayton Antitrust Act, which outlaws conditioning a sale on the buyer not using rival products.
Evidently counselor Reynolds figures he's got IBM boxed in.
And IBM may not have helped its defense in issuing the statement it did in response to the suit.
It said Neon's claims "have no merit, and its product offers no innovation. Neon's software deliberately subverts the way IBM mainframe computers process data. This is akin to a homeowner tampering with his electrical meter to save money. IBM has invested billions of dollars in the mainframe this decade and we will vigorously protect our investment."
Perhaps IBM hadn't gotten to the part of the suit where it's accused of disparagement because it certainly just called Neon a thief.
Neon's suit says IBM has told customers that zPrime is an "unlawful ‘circumvention' technology" and has conditioned the sale of new SPs on the customer pledging not to use it.
IBM has 60 days to answer the suit and Reynolds fully expects IBM to countersue in return and probably ask that the charges be dropped and the venue switched to New York, where it lives. The parties might get in to see the judge about scheduling a jury trial in February or March, he said.
The suit's at www.neon.com/doc/misc/lawsuit.pdf.
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...
Jun. 28, 2016 04:35 PM EDT Reads: 161
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Bradley Holt, Developer Advocate a...
Jun. 28, 2016 04:30 PM EDT Reads: 885
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jun. 28, 2016 03:38 PM EDT Reads: 289
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Jun. 28, 2016 02:00 PM EDT Reads: 1,128
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Jun. 28, 2016 01:59 PM EDT Reads: 224
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Jun. 28, 2016 01:00 PM EDT Reads: 805
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Jun. 28, 2016 12:45 PM EDT Reads: 947
Connected devices and the industrial internet are growing exponentially every year with Cisco expecting 50 billion devices to be in operation by 2020. In this period of growth, location-based insights are becoming invaluable to many businesses as they adopt new connected technologies. Knowing when and where these devices connect from is critical for a number of scenarios in supply chain management, disaster management, emergency response, M2M, location marketing and more. In his session at @Th...
Jun. 28, 2016 12:00 PM EDT Reads: 1,121
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Jun. 28, 2016 10:30 AM EDT Reads: 464
When people aren’t talking about VMs and containers, they’re talking about serverless architecture. Serverless is about no maintenance. It means you are not worried about low-level infrastructural and operational details. An event-driven serverless platform is a great use case for IoT. In his session at @ThingsExpo, Animesh Singh, an STSM and Lead for IBM Cloud Platform and Infrastructure, will detail how to build a distributed serverless, polyglot, microservices framework using open source tec...
Jun. 28, 2016 10:00 AM EDT Reads: 437
Apixio Inc. has raised $19.3 million in Series D venture capital funding led by SSM Partners with participation from First Analysis, Bain Capital Ventures and Apixio’s largest angel investor. Apixio will dedicate the proceeds toward advancing and scaling products powered by its cognitive computing platform, further enabling insights for optimal patient care. The Series D funding comes as Apixio experiences strong momentum and increasing demand for its HCC Profiler solution, which mines unstruc...
Jun. 28, 2016 10:00 AM EDT Reads: 372
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
Jun. 28, 2016 09:45 AM EDT Reads: 436
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his Day 2 Keynote at @ThingsExpo, Henrik Kenani Dahlgren, Portfolio Marketing Manager at Ericsson, discussed how to plan to cooperate, partner, and form lasting all-star teams to change t...
Jun. 28, 2016 09:30 AM EDT Reads: 1,295
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Jun. 28, 2016 08:30 AM EDT Reads: 1,217
Presidio has received the 2015 EMC Partner Services Quality Award from EMC Corporation for achieving outstanding service excellence and customer satisfaction as measured by the EMC Partner Services Quality (PSQ) program. Presidio was also honored as the 2015 EMC Americas Marketing Excellence Partner of the Year and 2015 Mid-Market East Partner of the Year. The EMC PSQ program is a project-specific survey program designed for partners with Service Partner designations to solicit customer feedbac...
Jun. 28, 2016 08:00 AM EDT Reads: 470
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Jun. 28, 2016 08:00 AM EDT Reads: 1,335
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Jun. 26, 2016 05:00 PM EDT Reads: 1,348
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Jun. 26, 2016 05:00 PM EDT Reads: 1,257
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Jun. 26, 2016 04:00 PM EDT Reads: 1,312
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Jun. 26, 2016 04:00 PM EDT Reads: 1,391