In a recent complaint filed with the U.S. Department of Justice (DOJ), an industry watchdog organization (that I had never heard of) known as the CCIA has asked the government to look into alleged anti-trust behavior in the mainframe market segment.  The core of the CCIA's argument is that IBM’s refusal to let other vendors market its z/OS operating environment on the hardware of their choice constitutes monopolistic behavior.  The CCIA seems to believe that if IBM would let other vendors market its z/OS operating environment on non-mainframe hardware, then consumers would benefit by being able to purchase IBM z/OS on less expensive (and less reliable and secure) server platforms. 
 
Like the CCIA, I'd like to see mainframe prices continue to be reduced.  But, unlike the CCIA, I'd rather see price change driven by market ebb and flow, rather than through strong-arm legal challenges by suspect industry watchdog organizations.  In fact, mainframe pricing is already changing, in response to a highly competitive market factors.   IBM has reduced prices for its mainframes between 50-90% this decade (depending on the configuration).  And IBM recently introduced new "Solution Editions" for System z -- packaged hardware and software bundles (such as SAP on Linux on System z) also designed to reduce the purchase price of mainframes. The fact is that IBM has repriced its mainframes in order to compete more effectively with high-end Unix servers that are encroaching on mainframe territory (this is an example of what I mean by natural ebb and flow).  And as a result of this repricing, mainframes and Unix servers are closer than ever in terms of total cost of acquisition price.
 
So, if mainframe repricing is already underway and if other competing systems are now positioned to challenge mainframes (so IT buyers have alternate platforms from which to choose), what is the motivation for the CCIA's complaint to the DOJ?  Here are a few thoughts:

1.  The CCIA sees itself as a promoter of open markets, open systems, open networks, and full, fair, and open competition.  Perhaps the CCIA considers IBM's reluctance to share its operating system (that, I note, represents billions of dollars of IBM investment in intellectual property, which IBM has a right to protect) with its member organizations as a refusal to participate in what the CCIA considers open markets.  At the same time, the CCIA fails to recognize that IBM has made its mainframes open systems that run Java and Linux, for example, in response to a competitive marketplace.

2.  Perhaps the CCIA member organizations are pushing CCIA leadership to initiate these anti-trust proceedings.  I note that TurboHercules, T3 Technologies, Microsoft, and Oracle (all CCIA members) can all directly benefit by forcing IBM to capitulate by handing its operating environment over to third parties.  TurboHercules is an open source mainframe effort that would benefit if it could deploy z/OS on other hardware platforms and take advantage of the billions of dollars IBM has invested into its mainframes and no cost to them.  T3 Technologies has already challenged IBM for rights to use z/OS and lost in a New York district court.  At this week's Oracle World, Larry Ellison has made it clear that Oracle intends to compete aggressively in the server marketplace and targeted IBM systems and advertisements in his presentation.  And Microsoft runs a mainframe migration program.  I'm hoping that the DOJ looks closely at the motivation of these vendors as it considers taking any action in this case.

3.  Perhaps the CCIA has a different motive and sees an opportunity to benefit financially from these proceedings.  According to an InfoWorld article in 2004, Microsoft settled an anti-competition case with the CCIA and Novell (this case was being held before the European Commission) and a major chunk of that settlement went to a CCIA executive.  Of the $19.75 million settlement, it is alleged that the CCIA executive received almost half (as well as a $500,000 salary "bonus" for three years).  This article can be found at: http://www.infoworld.com/t/platforms/update-microsoft-paid-ccia-official-reports-says-711.  With this kind of reward system for issuing complaints and then settling out-of-court, the CCIA and its executive could hit the jackpot with its latest complaint/accusation.

The bottom line in this discussion is that pricing activities to drive down mainframe costs are already under way and that raises the question: What is the CCIA's real motivation for issuing its complaint?  I suggested three reasons, but I'd like to hear your opinion on what you think is happening here.