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The Indian Council for Research on International Economic Relations (ICRIER) recently released a report, The Issues of Competition in Mainframe and Associated Services in India, highlighting the need to probe IBM’s market conduct in selling its mainframe computers and whether it is flouting market competition rules by stifling competition.
According to the ICRIER-Indicus report, India’s high-end computer market is dominated by IBM (with 50 percent market share), HP (33 percent) and Sun (17 percent). “The Competition Commission of India needs to be proactive in ensuring that the server market remains open and competitive, and that no one player is able to abuse its dominance in the relevant market segment,” said Professor Rajat Kathuria, who spearheaded the ICRIER-Indicus study.
The report opines that openness and interoperability are likely to be the basic requirements of developmental project such as the Unique Identification (UID) and, expresses concerns that closed standards would create serious patent and interoperability complications.
“High-end servers such as mainframes are very crucial for India’s IT needs for developmental programs. But monopolistic practices of dominant enterprises in this sector are detrimental to growth,” said Kathuria. “Since the Indian enterprise IT market is entering its high growth phase, CCI has an excellent opportunity to avoid the pitfalls of the mature IT markets. Unbundling hardware and software, that is, ensuring that the sale of enterprise-class server hardware is not tied to the sale of enterprise software, is an important policy recommendation of the report.”
The report also raises concerns over the attempts by IBM to tighten its hold on the Indian market by pricing its products much lower than other markets. This, in essence, is a clear effort to monopolize the market. |