Until IBM acquired the company in July 2008, PSI was an upstart challenger to IBM in the mainframe market whose story we chronicled in this 2007 feature. Led by an executive team stacked with former IBMers, PSI was charging hard for IBM customers with what it said was a smaller, less expensive Intel-powered mainframe that allowed customers to run multiple operating systems. That was something IBM's machine couldn't do.

IBM took notice, filing suit in 2006 against its smaller competitor for patent infringement and breach of contract. PSI filed a countersuit accusing IBM of antitrust violations, unfair competition and business torts. The legal case dragged on for 18 months, crippling PSI's ability to sell its mainframes. 

We speculated when IBM bought PSI that it might shelve the target's smaller, cheaper mainframes. Why further develop and market a considerably less expensive technology that would cut into revenue generated by its own machines was our thinking. Turns out, that's exactly what IBM did.

It's a decision that hasn't gone unnoticed by the group that filed the complaint now being investigated by the DOJ. As Cecile Kohrs Lindell noted in her story, Edward Black, chief executive of the Computer & Communications Industry Association, says IBM purchased PSI as a way to clear the field of a competitor with "an exciting new technology." - Suzanne Stevens