In what looks something of a counsel of despair, IBM Japan is running the risk of being seen to legitimise the plug-compatible mainframe market by offering versions of the 3090 and the 4381 microcoded to emulate exactly the M-series mainframes manufactured by Fujitsu Ltd and Hitachi Ltd. Both companies implement 370 architecture in their mainframe lines, but for the Japanese market add instructions not used by IBM in order to optimise performance of their own operating software. For the international market, they build variants that are exactly IBM compatible. IBM Japan admitted that it had a facility called VM/PII to emulate Fujitsu’s mid-range operating syste under VM, and a VM/MPI to do Hitachi machines and started offering them at the end of 1987 (CI No 802), but the new development is a big step further down the road of plug-compatibility. IBM Japan is now number three in the local mainframe market behind Fujitsu Ltd and NEC Corp, and has less than half of the 370-type market which it once led. The new microcode emulations will be built into the PR/SM partitioning feature, which will ship in Japan in June, so that the Japanese operating systems will run much more efficiently on ESA 3090s and 4381s than it does under VM. Although intended as a weapon to get Fujitsu and Hitachi users to convert to IBM machines, IBM Japan is not likely to win much new commerc ial business as a direct result, because many Fujitsu and Hitachi users are effectively captive under Japan’s culture of corporate exten ded families that keep everything in the family wherever possible. But it will enable IBM to put price pressure on margins by forcing the locals to match its low prices, re ducing the cash they have to devel op machines to compete with IBM in the rest of the world. The risk for IBM is that it has managed to persuade many of its customers in the rest of the world that there is something disreputable about buying plug compatible equipment: with IBM itself selling compatible machines, that argument won’t wash any more.
