Neon Enterprise Sues IBM Over Claimed Market Strategy

IT giant IBM has been served with a lawsuit by a much smaller rival Neon Enterprise Software, a company which develops mainframe software, for deliberately trying to prevent its users from using the software provided by the company.

The software in question is called zPrime which was released by Neon Enterprise Software in July and allows its users to cut down the licensing fees they pay to IBM by 50-75 percent.

It allows them to shift their mainframe workloads on IBM's zAAP and zIIP specialty mainframe processors which are comparatively smaller and cheaper than the ones they are paying for.

The Texas-based software company has filed a lawsuit in a US District Court, Texas, which claims that IBM had used its towering market position to discourage customers from using zPrime as it is afraid of losing millions of dollars worth of revenues due to the nature of the software.

The company has also claimed in the lawsuit that IBM had offered additional specialty processors to customers for not using zPrime.

Neon Enterprise Software is looking to claim damages and IBM’s word that it will not resort to activities which breach the competition laws of US. However, IBM has not taken this lawsuit lightly and will look to defend it self in the court of law.

IBM said in a statement that zPrime knowingly subverts the data processing system of IBM mainframes. The company compared Neon to a person who is trying to tamper with the electric meter in order to pay less.

Our Comments

The New York based hardware giant said the company has invested billions of dollars in the development of mainframe technology and will definitely protect its investment. Big Blue is not to be taken lightly, it is likely to go on the attack after that lawsuit from Neon Enterprise.

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