• IBM defends its mainframes’ intellectual property in London court.
• Wins against software provider that offers virtualisation.
• Ageing software and developers behind reverse-engineering bid.

IBM has successfully won a judgement against LzLabs for violating its intellectual property rights. It alleged LzLabs reverse-engineered IBM software designed to run on mainframe computers, and offered its work as part of LzLabs’ Software Defined Mainframe (SDM).

The company presented its case in London, UK, in the London Technology & Construction Court, part of the country’s High Court that’s tasked with settling technically complex cases which fall outside the expertise of ‘normal’ courts. IBM took action against companies LzLabs and Winsopia, and John Moores, the founder of LzLabs. The court found in favour of IBM, stating “the defendants breached, or procured breach of the ICA [IBM customer agreement], using Winsopia’s access to the IBM mainframe software to develop the SDM by unlawful reverse engineering of the licensed software.”

LzLabs’ SDM is a virtualisation of IBM mainframe core systems (z/OS and z/TPF) that runs on standard x86 hardware, so software that was previously dependent on mainframe hardware and IBM software can be run on commodity, over-the-counter hardware.

Why do mainframes still exist?

Mainframe computers continue to run where high throughput of bulk processing is important, such as in bank clearing houses and payment gateways. In such instances, near-instantaneous transactions are important and, arguably, the mainstay of entire economies. Mainframes can operate with high fault tolerances, executing each process twice and comparing results to ensure the veracity of results. Such systems often perform in digitally-synchronised lockstep with one another to provide immediate failover in the event of fault or natural disaster.

In the case before the UK court, it was alleged that Winsopia, a subsidiary of LzLabs, acquired an IBM mainframe and used it to reverse engineer installed software, the results of which were then passed to LzLabs. LzLabs offers a migration path for mainframe users to place their applications in the conventional cloud – particularly Microsoft Azure and Amazon’s AWS – and gain the benefits of scalable compute and storage for which operators would otherwise be dependent on IBM. They would also bypass any licensing argeements with IBM and their costs.

The mainframe market today continues to exist as many critically-important applications are complex and interconnected, making migration impractical. Companies’ investment in the hardware and software engineered for mainframes is extensive, and rewriting applications to run on more modern infrastructure is not economically viable, despite the perceived advantages. It’s not uncommon for core applications running financial transactions, for example, to have been written for and continuing to run in COBOL, a programming language initially developed in 1959.

It is widely considered that large, monolithic applications written in legacy languages like COBOL are difficult to re-write due in part to the low-level nature of their code, and the lack of skilled personnel still conversant in them, due to developers reaching retirement age. In some cases, coders have had the bad grace to take their knowledge and experience to the grave. Lack of skilled developers also causes ongoing problems for organisations dependent on mainframes, as maintenance and upgrade of existing code is highly challenging.

Pause in legacy migrations

During the COVID epidemic, many projects underway designed to migrate away from mainframe COBOL to more modern software languages and hardware were put on hold, as systems were placed under significant demand due to spikes in traffic connected to government aid programmes and economic relief schemes.

IBM’s earnings from infrastructure, of which mainframe technologies are a part, were reported as $3.65 billion in a single quarter of 2024. With such significant numbers in play, it is perhaps unsurprising that IBM (AKA ‘Big Blue’ or ‘Big Iron’ – the latter in reference to the large size of mainframe hardware) is protective of its intellectual property. It also explains why there is meaningful demand for options which cost significantly less financially, and are less dependent on an ageing workforce’s existence.

A future hearing at the London Technology & Construction Court will set damages in the case. LzLabs is owned by some of the same people who ran Neon Enterprise Software, a company that was barred by a US District Court from reverse-engineering IBM software, and from distributing “certain Neon software products” in a similar case to the one in London, according to court documents.