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IBM, Microsoft point fingers at each other PDF Print
Written by Harsimran Julka   
Monday, 15 March 2010 03:33
There is a role for Competition Commission to play in it as there might be a problem if the installed base starts becoming high
 


IBM, the world’s largest IT services company, has accused Microsoft, the world’s largest operating system manufacturer, of sponsoring 

Microsofts's Windows 7
Nokia N97 smartphone
Google Nexus One smartphone
an India report released last week that criticises IBM India’s trade practices in the $500-million local server market, terming them as restrictive. The report calls for unbundling of hardware and software by IBM. 

The report released by Indian Council for Research on International Economic Relations (ICRIER) said that in a bid to tighten its hold on the Indian market IBM is ‘under-pricing’ its products, much lower than other markets and bundling mainframes with operating systems that can’t easily migrate to other servers. It says that the proprietary nature of the operating system of the IBM mainframe creates problem for mainframe workloads as these cannot switch to other high-end servers. 

“The applications get tied to an IBM operating system (z/OS) that cannot run on other servers because of IBM’s restrictive licensing practices,” said the ICRIER report. The 90-page report was sponsored by Openmainframe.org, an organisation, IBM claims, is bought and paid for by Microsoft. Meanwhile, Microsoft is expected to respond to IBM this week, on the issue. 

India has about 25 mainframes installed at present. The report surveyed 71 large IT deployments in the country at department of taxes, RBI, Mausam Bhawan, CDAC, Indian Railways, LIC and many private players to identify the various systems deployed by them. ICRIER also cites IBM’s $1.5-billion deal with a large mobile operator, as a case to say that IBM will always have an ‘incentive’ over others to run its systems. 

Mainframes are high-end computers used for large scale computing purposes. High-end enterprise servers and mainframes, cost over $100,000 each. The report said that cost of IBM’s System z9 mainframes are almost half in India compared to China, where the cost is over $2 million. 


Responding to the charges of under pricing, IBM said that it regularly has lowered the prices paid by clients for doing work on the mainframe. “As a result, IBM’s clients have benefited from innovation on the platform and an alternative to Unix and Windows has been preserved,” an IBM spokesperson said. India’s high-end computer market is dominated by IBM (49% market share), HP (33%) and Sun (17%), said the report. “Openmainframe.org is bought and paid for by Microsoft and other IBM competitors, so it’s hardly surprising that it would be making an anti-IBM argument,” IBM said. 

Openmainframe.org, is a global organisation that claims to promote open standards in mainframe computing. 
IBM went ahead and questioned the monopoly of Microsoft Windows and Intel. 

“To call the IBM mainframe a ‘monopoly’ is silly. Only a decade ago, the IBM mainframe was on the verge of extinction because of Wintel that still heavily dominates the market today. By investing billions of dollars, IBM has improved the mainframe platform. This report has no credibility,” the spokesperson said. Wintel is a word used to represent the trade monopoly enjoyed by Windows and Intel combined, over the world’s computers. 

“The low installed base of IBM z/OS systems imply that there are no immediate public concerns, as opposed to the US and Europe, where there have been welfare losses. However there is a role for Competition Commission to play in it as there might be a problem if the installed base starts becoming high,” said professor Rajat Kathuria, who spearheaded the report, done jointly with Indicus Analytics. 

“The server market is tightly controlled by a few firms. No one player should be able to abuse its dominance,” he added. The report calls for a deterrence to bundling of IT goods and services.