Rivals Say IBM Stifles Competition to Mainframes

IBM has dominated the mainframe computer business since the category was created four decades ago. And it still gets about one-quarter of its $100 billion in annual revenue from sales, software, services and financing related to the machines. So when an upstart, Platform Solutions in Sunnyvale, Calif., developed software that turned standard servers into systems that mimicked I.B.M.'s expensive mainframes, Big Blue fought back. After legal action failed to fend off the pipsqueak, I.B.M. resorted to a bear hug: it bought Platform in July for $150 million. And then it promptly terminated the innovative product. Despite eliminating the Platform threat, I.B.M. still faces the wrath of many in the computer industry. The Computer and Communications Industry Association, a trade group backed by the likes of Google, Oracle and Microsoft, described the Platform deal as "a clear attempt by I.B.M. to purchase a company solely to foreclose competition in the mainframe marketplace, protecting its cash cow at the expense of consumers."