Software Company Sues IBM Alleging Unfair Competition

Paul Lilly

In an effort to protect its mainframe business and keep those dollars rolling in, IBM has been bad mouthing the compeition to its mainframe customers, and it will now have to defend some of those remarks in court. Neon Enterprise Software, a privately held company who makes a software tool called zPrime, has slapped IBM with a lawsuit accusing the company of unfair and unlawful competition.

The problem arose when IBM told its mainframe customers in a letter that "the use of zPrime will cause Neon's customers to become obligated -- contrary to IBM's original promises to customers that purchased SPs -- to pay software license fees for workloads shifted to SPs," Neon said in its lawsuit.

Neon denies the claim, further accusing IBM of selling additional SPs to customers only if they agree not to use Neon's products. So what did IBM have to say?

"Neon's software deliberately subverts the way IBM mainframe computers process data," IBM said. "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 vigorously protect our investment."

Neon is seeking damages and a permanent injunction to prevent IBM from making the same claims.

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