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IBM’s dominance in large computer systems called mainframes may make it look like the U.S. government has an open and shut case of monopoly, but upon closer examination it appears there is more competition than critics suggest.

Analysts say the mainframes in question represent a small segment of the broader server market, where rivalry is heating up due to Oracle Corp’s planned acquisition of Sun Microsystems Inc, as well as, network equipment giant Cisco Systems Inc’s recent market entry.

The Computer and Communications Industry Association (CCIA), which urged the U.S. Justice Department to investigate International Business Machines Corp, said the vendor of technology hardware and services had a 100 percent grip in mainframe operating systems.

IBM does dominate when it comes to supplying mainframe systems that run on its own operating system. But analysts say competition exists in other kinds of high-end servers, which similarly process large workloads and serve as the central nervous system for ATMs and airline bookings.

Technology research firm IDC’s data shows IBM’s high-end mainframe products, called System z, accounts for around 10 percent of worldwide server revenue of $53.3 billion.

In overall servers, IBM had 34.5 percent market share, with HP holding around 28.5 percent share, according to IDC.

Analysts said that since customers can switch to other mainframes or other servers, it made sense to look at the broader market.

“It’s not as though people don’t have other choices or can’t turn to other products to do the work,” said Jeffrey Hewitt at Gartner no faxing pay day loans.

IDC analyst Jean Bozman said mainframe workloads can be moved to other high-end servers like Unix servers made by Hewlett-Packard Co, Sun, and IBM.

She added, however, that a switch would take time and in some cases require new software, and could be particularly difficult in the case of custom applications written specifically for IBM mainframe.

Bob Djurdjevic of Annex Research said he saw little merit in the investigation, noting that mainframe was not considered a growing market.

“It’s a small part of a declining market and therefore I cannot possibly see any basis… that you can allege monopolistic behavior,” he said. Djurdjevic owns IBM stock along with shares in competitors including HP, Dell Inc, and Microsoft Corp.

Analysts also said a weak economy and demand for efficient data center technology was leading to more mergers and acquisitions, increasing rivalry in the broad server market.

Oracle’s planned purchase of Sun will combine software and hardware expertise, making it a formidable competitor to IBM, which sells a combination of technology services, software and hardware to corporate and government clients.

Companies like IBM and HP are also now competing with Cisco, which is the world’s biggest network equipment maker and recently entered the server market. 

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