Global CIO: IBM Is Being Railroaded By Our Clueless Justice Dept.Global CIO: IBM Is Being Railroaded By Our Clueless Justice Dept.

Why is it, then, that this whole anti-trust assault grew out of a complaint filed not by IBM's customers—but by its competitors? Even worse, the Justice lawyers descend on IBM just one week after a federal district court judge in New York threw out a related anti-trust case against the company.

An outfit called T3T Inc. had argued, unsuccessfully, that IBM's refusal to license its own mainframe software to let it run on copycat systems was illegal and anti-competitive. The judge flatly stated that this IBM stance "does not constitute anticompetitive conduct" under federal law. Furthermore, the judge, Lewis A. Kaplan, ruled that T3T lacked any legal standing to sue and that "its claims would fail in any event." Anti-trust laws don't restrict the right of a maker to freely choose which parties it wants to do business with, the judge said, citing a 90-year-old precedent.

Despite the federal judge's rejection, T3T's plaint likely is the core focus of the Justice longriders now pursuing IBM. And guess what? T3T actually is partly owned by IBM's most bitter rival: Microsoft. The Obama folks sound more and more like . . . the anti-U.S. regulators of the European Union, who fined Intel $1.4 billion (and withheld exculpatory evidence in Intel's favor) and are now meddling in Oracle's takeover of Sun.

Now you know the talk has gotten really vicious when someone compares you to EU bureaucrats! But Kneale continues to make his case convincingly as he talks about the huge investments IBM has made in this market sector that is is supposedly plundering and pillaging through monopolistic mayhem:

The feds are focusing on where IBM remains especially strong, in its back-from-the-boneyard mainframe business. Yet even here, IBM is far less dominant. In the early 1980s IBM mainframes held 80% of the total computer market. Today IBM's biggest boxes comprise just 0.03% of all server shipments, says International Data Corp. Still, comma . . . among the most powerful machines, those priced at $250,000 and above, IBM commands a 58% share of the revenue.

Yet today corporate accounts can forgo IBM to buy cheap racks of "blade" servers from Hewlett-Packard and Dell and others. They can get plenty of power from Unix boxes made by Sun and HP. In the latest iteration, they can simply lease computing time from "the cloud," services provided by such entrants as Google and Amazon (and IBM).

Amdahl and Fujitsu pulled out of the IBM mainframe market in the late 1990s, deciding it wasn't worth the investment. IBM, meanwhile, spent billions on research and development--$1.5 billion over five years for its newest mainframe, the System z series; $6 billion a year in total R&D.

In Oliver Twist, when the scoundrel Bumble the Beadle is finally cuffed and being apprised of his violations of the law, he opines that "If the law supposes that, the law is a ass—a idiot." I would say that in the current legal battle between Justice and IBM, we also have someone playing—quite brilliantly—the role of "a ass—a idiot." But in this case, that part's not being played by the law—and it's sure not being played by IBM, either.