The fireworks over Armonk this 4th of July are going to be a bit brighter and more awesome because – by the flick of a checkbook – IBM has gotten out from under a threat to its precious multibillion-dollar mainframe monopoly.

For a reported pittance, it’s bought Platform Solutions Inc (PSI), the first significant new mainframe maker in 30 years, the start-up that sued it for antitrust 18 months calling it every dirty kind of monopoly-abusing name in the Sherman and Clayton Act dictionary.

PSI also took its complaint to the European Commission.

Now the twin complaints, as well as IBM’s patent and copyright infringement-cum-breach of contract and misappropriation of trade secrets suit against PSI, have been pulled.

It is believed the cost of litigating against a deep-pocket company like IBM did PSI in.

Officially PSI, its technologies and its people have become part of the IBM System z business unit inside the IBM Systems and Technology Group on undisclosed terms. Supposedly they are now part of “IBM’s long-term mainframe product engineering cycles and part of IBM’s future product plans.”

Ed Black, the head of the Computer & Communications Industry Association (CCIA), the industry watchdog that PSI joined before it was gelded, called the transaction a “black hole acquisition” that “sucks the life out of the market “ and compared it to the Mafia bumping off a witness before he can testify.

The only reason IBM bought the place, CCIA said in a formal statement, was to “foreclose competition in the mainframe marketplace, protecting IBM’s cash cow at the expense of consumers.”

It said it should set off smoke alarms in the offices of regulators worldwide.

According to CCIA the acquisition was purposely structured in such a way so the price – said by other sources to be between $100 million and $200 million – would “narrowly miss” the threshold levels for mandatory review in both the US and Europe.

CCIA thinks authorities on both sides of the pond should review “this extinguishing of competition” anyway, particularly since the only way IBM got out from under a 49-year-old consent decree with the Justice Department in 2001 was to promise it would resist its old “anticompetitive ways – lest the DOJ take it back to court – and share its IP with plug-compatible mainframe makers, exactly what PSI claimed it wasn’t doing – and exactly what it was doing when the DOJ was riding it.

CCIA says the recent record shows IBM to be an “unrepentant recidivist.”

What is particularly abject, if not downright poignant, is the statement ostensibly made by PSI CEO Michael Maulick that IBM circulated in its press release saying, “We are pleased to become part of IBM, knowing IBM has the most comprehensive vision for the future direction of enterprise computing, and has the requisite technologies to realize that vision. The acquisition makes the most sense for our companies – to collaborate on future technology offerings and maximize our combined knowledge and skills for the benefit of IBM clients globally.”

The non-competes that PSI people were required to signed – not to mention the gag orders – were reportedly quite stringent and it is assumed – whatever IBM might say – that IBM will simply smother the PSI operation considering that it was offering Itanium boxes that ran IBM mainframe software as well as Windows and Linux.

PSI had also accused IBM of foiling its acquisition by HP.

Itanium chips are supposed to be natively incapable of executing IBM mainframe instructions but could through some previously unexploited Fujitsu-Amdahl S/390 magic.

With PSI gone to IBM, that only leaves T3 Technologies Inc, the beaten-down integrator that used to advertise itself as the world’s “second-biggest mainframe company.” It was also a PSI reseller and filed a 46-page complaint with the courts in November asking to join the PSI suit.

Hours before IBM announced its acquisition of PSI, T3 was reported by Thompson Financial news service to be ready to file a formal antitrust complaint against IBM with the European Commission.

Calls to T3’s Florida headquarters and its outside counsel in New York were not returned.

PSI was backed by Goldman Sachs, Intel, Microsoft, Blueprint Ventures, Interwest Partners, Investcorp and Western Technology Investment, which are believed to have put at least $60 million-$100 million in the firm, maybe more, PSI never wanted IBM to know how much it had.

The last round of $37 million was supposed to see PSI “though trial and resolution.” Its suit against IBM, due to hit the courts in Q4, should have been worth billions of dollars.

Companies like LL Bean and Lufthansa were customers.

IBM is the only mainframe supplier left and an estimated 80% of corporate and government data, valued at $5 trillion, still resides on mainframes and more commercial transaction a day are processed through mainframes than any other platform, which is why IBM can brag that if the plug was pulled on the beasts the global economy, particularly the financial market, would crash. It is economically impossible to move the applications and the data elsewhere. The effect of IBM’s monopoly is supposedly to raise prices.