IBM has acquired rival mainframe vendor Platform Solutions Inc (PSI) for an undisclosed sum. Both companies have agreed to drop outstanding legal disputes over intellectual property (IP) rights against each other as part of the deal.

IBM said it will integrate PSI's mainframe technology into its own System z mainframe platform over time.

Founded in 1999, PSI tried to compete with IBM by building lower cost mainframe systems based on Intel Itanium processors and standard Windows and Linux operating systems.

IBM took the company to court in 2006 over its claims that PSI systems could run IBM mainframe software, whilst PSI filed a lawsuit alleging that IBM had used its dominance in the mainframe operating system market to force customers to buy into IBM hardware.

The Computer & Communications Industry Association (CCIA) said IBM's PSI acquisition should be a cause of concern for competition authorities in the US and Europe.

“This is a black hole acquisition .. transforming a market with latent potential for competition and innovation into a sector with little prospects for anything but complete domination by IBM,” said CCIA president and CEO Ed Black in a statement.

The deal may yet fall foul of EU law. Mainframe vendor T3 Technologies is reported to have filed an antitrust complaint against IBM with the European Commission, saying that IBM is squeezing remaining mainframe vendors by ending support for older systems and not licensing its software or rivals.