Regulating the Land that Moore’s Law Forgot

In the days of yore, when mainframes ruled the Earth And so we come full circle: “IBM accused of abusing position in European mainframe market”.

Out of the limelight, IBM has spent significant time and money lobbying various governments to hobble competitors in the last fifteen years, all the while maintaining the biggest monopoly in technology with the mainframe.  Now the antitrust spotlight returns to them, amid accusations that IBM is doing exactly what got them into trouble decades ago (refusing to unbundle their software from their hardware).

IBM is very good at milking the mainframe installed base and defend it aggressively.  And for good reason: I have seen numbers that suggest the mainframe is still close to half of IBM’s profits when you include hardware, software and surrounding (people) services.  Forced forklift upgrades every couple of years are a favored strategy.

They’re also always on the lookout for ways to get new workloads onto the mainframe.  Nary a new buzzword appears without some cockamamie story about how the mainframe is the right place for the latest trend, though they never quite pan out. 

While supporting a legacy installed base is both necessary and even noble, the biggest problem is the mainframe has truly been the land that Moore’s Law forgot.  The computer industry’s inexorable engine of improvement has been suspended on the mainframe in the absence of competition to pressure IBM to pass the almost unavoidable cost savings onto customers (IBM: feel free to prove me wrong and start publishing industry standard benchmarks, particularly transaction benchmarks).

But as much as I welcome scrutiny of IBM’s business practices, the whole cycle of antitrust action is depressing, akin to the endless cycle of violence in the Middle East.  Microsoft naively once thought they could just go about their business (as IBM no doubt did as well decades before), but they faced competitors with better lobbying chops than software chops.  So Microsoft spent and spent to build up its own defensive lobbying capacity, yet could not resist using it offensively when the opportunity presented itself.  And so Google, after being jerked around on DoubleClick and their Yahoo search deal, is looking for payback and building a lobbying force that they too will need to keep busy

Perhaps just coincidently, there is new EU action against Microsoft over Internet Explorer.  I suspect Opera is not the only complainant here.  It is amusing to see the EU arguing that ongoing IE’s market share losses are smaller than anyone else reckons (suggestion for Dean and crew: let the EU provide your scorecard metrics for the next review period).

But pesky facts don’t matter so much in this case.  The EU is the most depressing aspect of the generally depressing antitrust topic.  While US antitrust policy is about protecting the consumer, the EU policy protects competitors, which of course makes them the first stop for any competitor looking for a leg up.

I suspect this latest action is the EU’s opening salvo for negotiations around Windows 7.  It has become a tradition for regulators to hold new versions of Windows hostage to their software design ambitions.

To return to our original topic, the obvious solution is IBM should just open source its mainframe software.  The bundling complaint goes away.  Mainframe software and competition probably improve.  IBM demonstrates their open source commitment extends to their own businesses and not just other people’s businesses.  And the EU regulators are happy and can focus all their attention on Windows 7 (as a counter, Microsoft should fess up and let the world know that Vista was actually designed by EU bureaucrats in Brussels).