Neon Expands Mainframe Complaint Against IBM

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Neon Enterprise Software has expanded its mainframe lawsuit against IBM after it provided ‘specific examples’ of how Big Blue is allegedly abusing its monopolistic position

Neon officials said that after zPrime was released, more than 50 System z customers expressed interest, with some testing the software. However, Neon’s lawsuit accuses IBM of using coercion and threats to warn its customers away from zPrime, citing in the amended complaint at least nine such instances. Some companies, such as Federal Express and Experian, told Neon they decided not to pursue Neon contracts because of threats from IBM, Neon said in the complaint.

IBM also has worked to block Neon’s ability to do business by refusing to let it participate in user conferences and making it more difficult for Neon to gain routine discounts on mainframe software, all of which makes it harder to Neon to do business.

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In their suit, IBM executives said they are entitled to protecting the billions of dollars invested in the mainframe business over the past decade, and that Neon’s zPrime is nothing more than piracy of IBM’s IP. IBM has worked to open up the mainframes to more modern workloads, and to expand their reach into such areas as the midmarket sector.

“IBM faces many lawful competitors in the marketplace,” IBM said in its response document. “Neon is not one of them.”

A number of smaller tech companies have looked for ways to grow their businesses by helping System z customers reduce their mainframe costs. Some, like Platform Computing and T3 Technologies, aimed to build non-IBM systems that could run mainframe workloads.

Others, like Neon and TmaxSoft, are looking at ways to make it easier for businesses to move their workloads onto the less expensive SPs.

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